And then there were two.
LinkedIn and Sketchers are the only remaining public companies from a list of seven or so that haven’t acted ahead of their annual meetings on a recommendation from the New York State Common Retirement Fund to add more women and minorities to their boards of directors.
By increasing diversity — and breaking with the white, male tradition — boards can help ensure “that different perspectives are brought to bear on issues, while enhancing the likelihood that proposed solutions will be nuanced and comprehensive,” New York Comptroller Thomas DiNapoli, who oversees the fund, wrote in a proposal included last week in LinkedIn’s proxy.
Public companies file their proxies with regulators and send them to shareholders before annual meetings. The documents often contain proposals from stock owners interested in steering companies in a particular direction.
DiNapoli, on behalf of the Common Retirement Fund, has used proxy proposals to push for change on a range of issues over the years. The $176.8 billion fund — the third largest pension fund in the country — has nearly 38 percent of its total investments in U.S. stocks.
Making boardrooms more diverse, though, has been an uphill fight.
Glass Lewis & Co., a proxy advisory firm, reported in February that the proportion of women on U.S. boards, inching up slowly, reached 19 percent last year. Since 2006, it said, 26 proposals to encourage gender diversity have gone to shareholder votes, although many of the recent ones have failed to muster majority support.
Aside from LinkedIn and Sketchers, DiNapoli successfully negotiated for board diversity with the other companies on his list, after alerting them to plans to submit proxy proposals.
In March, for instance, he announced that a proposal filed at eBay would be withdrawn after the company agreed to write into its governance guidelines that women and minorities would be actively sought as board candidates.
Earlier this week, he said Monster Beverage had agreed to add new charter language embracing not only race and gender, but also “diversity … of sexual orientation and gender identity” when looking for directors.
That was an about-face from last year, when Monster opposed a diversity proposal from DiNapoli as “not in the best interest of the company or its stockholders” — even though 40 percent of shareholders subsequently backed it at the annual meeting.
Interestingly, LinkedIn, the online professional network, took no position in its proxy on DiNapoli’s request to report back to shareholders by September on plans to increase board diversity. “We believe that our current practices do support board diversity,” said the company, which has one female director.
Sketchers, the footwear maker, usually files its proxy in late April, so its stand on a similar request from DiNapoli is not known. The New York Times reported last spring, though, that Sketchers has resisted adding a formal diversity policy for several years.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected].
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