New Proxy Guidelines Suggested for Massachusetts

Hurray for Massachusetts' State Treasurer, Steven Grossman, who put some muscle in the campaign to increase the number of women on corporate boards. He announced this week that his office will unveil new proxy guidelines on how Massachusetts invests its pension funds. The new guidelines consider governance, executive compensation, environmentally friendly policies, and the presence of women in the boardroom and executive suites. If the Pension Reserves Investment Management committee supports the changes, it will go to the full PRIM board for a vote on April 5.

Grossman follows the lead of Connecticut State Treasurer, Denise Nappier, a nationally recognized leader who has urged corporations to adopt policies that ensure that women and minority candidates are routinely sought as part of every board search.

Grossman said, "Massachusetts will hopefully play a more active role in using those principles in our practices, to make it clear to corporate America that its not acceptable to have such a low representation of women in the board room and in the executive suite."

Institutional investors hold a lot of influence when it comes to corporate decision-making. When institutional investors take on a cause, companies listen. Why? Because, according to Johan Sulgeman, professor of finance at SMU Cox, "when firms go against institutional investor preferences, stock prices take a hit."

We hope that Grossman and Nappier will lead the charge so that other state pension funds will adopt similar proxy guidelines, and that board diversity and the 20/20 model become a national call to action.

Corporate boards: Stuck at 11%...

Last week The Boston Club released its 2010 Census of Women Directors and Executive Officers of Massachusetts Public Companies. The news? There isn’t any. There has been no change in the number of women directors on public boards in Massachusetts from this year to last year, last year to the year before, or even the year before that. The number has hovered at 11% since 2006.

What seems different about this year’s report is its aggressive tone. The authors acknowledge that it’s time to turn up the heat if companies are to change the way they do business. Reporters from The Boston Globe and Boston Business Journal asked some of the companies with no women directors (there were 41 on The Boston Club’s list this year) “Why?” Many repeated the same tired answers we’ve been hearing for years: “There are few women working in this field.” Or, “We asked a woman. She turned us down.”

C’mon fellas! It’s time that we all worked a little harder on this issue. We know that there are many qualified women who are ready to serve. CEOs have just to look beyond the traditional requirements (C-titles) to find a pipeline of highly educated, highly skilled women in a variety of fields, from technology, science, construction, finance, and manufacturing – the very fields that they say have no women.

Where to find them? Look outside of the C-suite. Doctors, lawyers, college presidents, and professors can qualify. So too can divisional vice presidents and heads of large nonprofit organizations.  Many women run their own privately held businesses. They have bottom line responsibilities and accountability, similar skills required in public companies.

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