When Lowe’s Cos. Inc. holds its annual shareholders’ meeting on Friday, missing from the agenda will be a proposal asking the home-improvement retailer to add more women to its board of directors.
Like a number of other public companies this proxy season, Lowe’s was targeted by activist shareholders interested in boosting the ranks of female directors: Just 16.6 percent of the board seats at Fortune 500 companies, for instance, are currently held by women, a percentage that has barely budged over the decade.
Lowe’s has one female director among its 11, a former PepsiCo executive who joined the board in 2001. Big-box competitor Home Depot, though, has two women on its board, while a handful of other firms have three or more — with three often cited as a watershed in studies that link better company performance to greater board diversity.
“In our view, companies combining competitive financial performance with high standards of corporate governance, including a gender-balanced board, are better positioned to generate long-term value for their shareholders,” read the resolution prepared for Lowe’s annual meeting by Trillium Asset Management, a socially conscious investment firm in Boston.
The resolution asked Lowe’s to publicly commit to seeking out female candidates for “every board search” and to publish a report card on its efforts by November.
Last month, though, Trillium withdrew the resolution, citing “successful engagement” with the company.
Susan Baker, Trillium’s vice president for shareholder advocacy, said that in exchange for the withdrawal, Lowe’s agreed to revise corporate governance documents to make gender and race part of its nominee search process.
“In this case we made good progress with the amended corporate governance documents and will proceed with shareholder dialogue before next filing season around the topic of how the revised search criteria has altered their practices,” Baker said by email this week. “We will continue to point out to Lowe’s their laggard status relative to sector peers on board gender diversity and the potential risks to long-term shareholder value creation presented by an inattention to good corporate governance.”
Asked whether that could mean more female nominees for Lowe’s board by this time next year, Baker declined to speculate “at this time.” But getting the number of female directors at public companies to a national average of 30 percent by 2015 is the goal of the Thirty Percent Coalition, a group formed two years ago to improve boardroom diversity. Members include large institutional investors, women’s groups and business and labor executives.
Since last summer, the group has sent letters to nearly 170 companies on the Standard & Poor’s 500 and the Russell 1000 stock indexes that have no female directors, encouraging them to add women to their boards and citing the “bottom-line benefits” of doing so. As a follow-up, the group also filed shareholder resolutions this spring at 20 companies with no female directors, asking them to adopt charter language supporting board diversity.
New York Comptroller Thomas DiNapoli was among the letters’ 75 signatories, as were state treasurers, public pension funds, socially conscious investment firms such as Trillium and religious institutions like Catholic Health East, with which Albany-based St. Peter’s Health Partners is affiliated.
Baker said Trillium made Lowe’s aware of the Thirty Percent Coalition and will be “urging management to make use of the terrific resources of this organization,” which include access to companies’ best practices and a clearinghouse for female board prospects.