Seeking Unity, Not Uniformity*: Diversity and the Corporate Board of Directors
The National Law Review’s article, “Seeking Unity, Not Uniformity*: Diversity and Corporate Board of Directors,” cites Russell Reynolds Associates’ paper, “2019 Global & Regional Corporate Governance Trends.” The article is excerpted below.
New board of directors appointments such as Indra Nooyi joining Amazon, Nikki Haley nominated by Boeing, and Michelle J. Howard as IBM’s latest director illustrate the accelerating trend of gender and minority diversity on corporate boards – an apt topic for Women’s History Month. And there are plentiful reasons for promoting board diversity.
Over the past two years, women and minorities totaled a solid 50% of new S&P 500 directors, as reported in Spencer Stuart’s 2018 Board Index. Women candidates appear to be making particularly big strides and now represent 24% of all directors. Smaller public companies have more work to do. Why is this progress so important for a business? Institutional investors and proxy advisors (such as Blackrock, State Street, Vanguard, ISS, and Glass Lewis) have adopted voting policies requiring diversity progress, some with specific goals and consequences of negative voting recommendations. Further, firms like Russell Reynolds point to business research and studies showing that leadership diversity, beginning with board diversity, simply improves business performance. See 2019 Corporate Governance Trends and Harvard Business Review.
To read the full article, click here.