Vanguard explained its focus on portfolio company board (gender and other) diversity, and articulated these expectations of companies going forward:
- Publish your perspectives on board diversity. Here’s what we ask companies: Does your board share its policies or perspectives on diversity? How do you approach board evolution? What steps do you take to get the widest range of perspectives and avoid groupthink? Vanguard and other investors want to know.
- Disclose your board diversity measures. We want companies to disclose the diversity makeup of their boards on dimensions such as gender, age, race, ethnicity, and national origin, at least on an aggregate basis.
- Broaden your search for director candidates. We encourage boards to look beyond traditional candidate pools—those with CEO-level experience—and purposely consider candidates who bring diverse perspectives into the boardroom.
- Make progress on this front. Vanguard expects companies to make significant progress on boardroom diversity across multiple dimensions and to prioritize adding diverse voices to their boards in the next few years.
The position paper notes that Vanguard will promote its views on this topic via engagement with directors, potential support of shareholder proposals that seek more board diversity disclosure, and its other voting activities. Two company "case studies" illustrate Vanguard-friendly, proactive board diversity measures.
Access additional information & resources on our Board Diversity page. This post first appeared in the weekly Society Alert!