board diversity

The Wal-Mart Class Action Case

Last week the Supreme Court heard arguments for a class action case based on a 2001 suit filed on behalf of 7 women claiming discrimination in pay and employment practices at Wal-Mart. The case is the largest class action suit in history, representing 1.5 million female workers. Wal-Mart recently became a 2020 Women on Boards sponsor.  A strange bedfellow for an organization committed to gender diversity? Not really.

2020 Women on Boards is shining a consumer spotlight on the diversity performance of corporate America at the board level. Change starts with awareness and must be followed by action. 

Wal-Mart has a very clear diversity policy, spelled out on its website. It has won 37 awards and recognition for its commitment to advancing diversity and inclusion at all levels of the company.

In 1990, Hillary Clinton became Wal-Mart's first women director, after shareholders and founder Sam Walton's wife put pressure on the company to appoint a woman to its 15-member board. Today, Wal-Mart has 3 women directors, making it a 2020 “W” Company. African Americans and Latinos are also represented.  Wal-Mart has 6 women among its senior executive ranks, 17% of the company’s executive team. This year the National Association for Female Executives listed Wal-Mart among its Top 50 Companies for Executive Women.

It's proxy time.

With the 2011 season upon us we're noting lots of articles about increased shareholder activism. The recent SEC ruling allowing shareholders to vote on executive compensation (say on pay) may open doors for shareholders to weigh in on other kinds of proposals, like board diversity.

Online proxy voting services are making it easier for retail investors to vote their proxies. One service, Moxy Vote, allows investors to align their votes with advocacy groups they trust. Starting this month, 2020 Women on Boards joins the ranks of Moxy Vote Advisors, endorsing resolutions that encourage board diversity and slates that include women director candidates.

In the last week alone, we’ve endorsed the slates of 13 companies that have included women on the slate, including Capital Federal Financial, Warner Music Group, Novartis, and The Walt Disney Company (see the full list here).

Even if you don’t use the site to vote your proxies, Moxy Vote is a great way to monitor corporate resolutions and to follow initiatives you care about. Find an advocate that aligns with your interests and see what resolutions they support. It's like Facebook for shareholders. How cool is that?

Board Diversity: Does England’s Corporate Governance Code Push Harder than the SEC’s Governance Disclosure Rule?

England’s revised corporate governance code calls for boards that are “well balanced” with gender diversity to avoid “group think.” The revised code is an effort by the government to avoid future banking crises. Prime Minister David Cameron commissioned a report on what the government could do to increase the number of women directors. He said that more women on corporate boards would increase productivity. The report is due in February.
On this side of the pond, in 2009 the Securities and Exchange Commission adopted “The Governance Disclosure Rule.” The rule requires companies to consider diversity when nominating director candidates. The SEC doesn’t define diversity letting public companies to figure it out for themselves. The SEC notes that investor knowledge about diversity policies is useful, and says that a meaningful relationship between diverse boards and improved corporate financial performance exists.
We hope that in 2011 the S.E.C. will take a leadership role in defining diversity so there is no ambiguity about the issue. We wish you all a happy and healthy New Year and look forward to reporting on gains in the number of women directors in the months to come. If you haven’t done so already, please register your support for 2020 Women on Boards. Together we can make it happen!

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