As discussed in this article from the WSJ, the UK government is conducting a review of the reasons underlying the low proportion of women in top executive positions at companies in the FTSE 350 index. According to the article, the goal is to have women occupy at least one-third of board seats by 2020. However, in 2017, 24.5% of the boards seats at FTSE 350 companies were occupied by women compared with 23% in 2016 and 9.5% in 2011. But the most astonishing aspect are the atavistic quotes from a range of FTSE 350 Chairs and CEOs explaining the dearth of women in top positions.
Happy International Women’s Day!
According to the latest Equilar Gender Diversity Index (GDI), based on the current rate of growth, board gender parity for companies in the Russell 3000 is now expected to be achieved by 2048, an advance from the estimate published in the inaugural 2017 GDI, which did not project parity until 2055. At that point, women held only 15.1% of board seats for the Russell 3000, compared to 16.5% as of the end of 2017. Should we cheer?
The lede from the WSJ is that “for the first time,” BlackRock (reportedly the largest asset management firm with $6.3 trillion under management) is “stating publicly that companies in which it invests should have at least two female directors.” According to the WSJ, the new disclosure, just one component of BlackRock’s recently posted Proxy Voting Guidelines for U.S. Securities (more on the guidelines to come in a later post), “represents a small but significant shift for one of the largest shareholders of American companies.” Board diversity has been a consistent issue for several large institutional investors in recent years but without much specificity, and reportedly, BlackRock has, in the past, quietly encouraged companies to have a minimum of two women on their boards. Now, BlackRock is trumpeting that standard publicly.
Summarized below are some of the highlights of the 2017 PLI Securities Regulation Institute panel discussions with the SEC staff (Michele Anderson, Wesley Bricker, Karen Garnett, William Hinman, Mark Kronforst, Shelley Parratt, Ted Yu), as well as a number of former staffers and other commentators. Topics included the Congressional and SEC agendas, fresh insights into the shareholder proposal guidance, as well as expectations regarding cybersecurity, conflict minerals, pay ratio disclosure, waivers and many other topics.
There’s been chatter about board gender diversity for a long time and, while there has been some modest progress, we have yet to see any dramatic breakthroughs. Now some of the largest asset managers are not just talking the talk, they are also walking the walk. Will it make a difference? Time will tell.