Advocates for more women on corporate boards have conducted economic studies on the effect of diversity on boards. They have spoken out, issued press releases, organized peer groups, taught courses, and held seminars. Why not use the power of investment as well?
Earlier this month, a group of institutional investors did just that. Investors controlling more than $1.2 trillion in assets under management sent a letter to the 127 companies in the Russell 1000 Index that have no women at all on their boards of directors, urging them to add women to their boards.
This initiative was organized by the Thirty Percent Coalition, a coalition that includes senior business executives, state elected officials, women’s groups, institutional investors, board members and others. The coalition was formed in late 2011 for just this purpose – to attempt to remedy the lack of diversity in corporate boards. The group wants to see 30 percent of board seats being held by women by the end of 2015, which will be a tall order since the number (as relates to the Fortune 500) is 16 percent now.
The Russell 1000 are essentially the 1000 largest publicly held companies in the United States. It’s pretty astonishing that in 2013, nearly 15 percent of them have no women at all on their boards.
This letter doesn’t do anything more than admonish and ask these companies to find qualified women to put on their boards, which shouldn’t be that difficult. It doesn’t invoke the power of the purse. This is not an attempt to “disinvest” from companies without female board representation, simply a statement by those in a position to invest large sums from pension funds and other sources that it’s about time.
More information can be found here. We hope that this initiative, along with others that we have written about, helps move the pace of change beyond the glacially slow and helps put more women on boards.