Correction: An earlier version of this story indicated TrustCo does not have any women on its board. There is, in fact, one woman on its board.
It may not have been a full-throated call to arms, but Gov. Andrew Cuomo’s State of the State address last week at least offered mention of the dearth of women on public company boards.
“[W]hile women make up over half of the U.S. population and nearly half of the corporate workforce, they make up only about 20 percent of corporate boards,” the governor noted.
Indeed, a quarterly survey on gender diversity from Equilar, which advises public companies on internal workings, suggested in November that “progress toward parity” on boards seemed to stall in 2017, after chugging upward over the last few years.
Equilar identified 624 companies in the Russell 3000 — the country’s 3,000 largest publicly traded firms — with no women on their boards. On the list were 53 New York-based companies, including familiar names like Eastman Kodak and Nathan’s Famous.
Studies show that having women on corporate boards, in addition to better reflecting society at large, can affect company performance. A 2016 university study went further and called the effect “economically meaningful” when female directors sat on important board committees.
Board diversity is expected to be a topic again this year for institutional and activist investors, according to Russell Reynolds Associates, an executive search consultant. It says several large U.S. institutional investors “have reached the limit of their patience” on the issue, and used their holdings to vote last year against the board slate at companies that failed to add women.
With that backdrop, Cuomo’s call on the state Common Retirement Fund “to invest in companies with adequate female and minority representation on their management and on their boards of directors” was notable.
It was one of 126 “big-goal” proposals laid out in the State of the State. The governor said he would work with the state comptroller “to put in place processes and standards to systematically invest in companies that invest in women and minority leadership.”
We’ll have to wait to see how he envisions doing that.
Cuomo’s office said the details would be unveiled in coming weeks. The comptroller’s office said it had nothing on the initiative to report yet.
New York’s Common Retirement Fund is the third largest public pension plan in the country at $192.4 billion. Of the benefits paid out, 75 percent come from investment earnings, and Comptroller Thomas DiNapoli has not been shy about encouraging portfolio companies to increase their board diversity.
In 2016, for instance, DiNapoli was prepared to submit a shareholder resolution to the annual meeting of Priceline Group — the travel fare aggregator — calling for a formal commitment to gender and racial diversity in board appointments.
When the company added a second female director prior to the meeting, DiNapoli backed off. Similar efforts at 20 companies since 2012 have achieved similar ends at 17 of them, according to his office.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at firstname.lastname@example.org.