THOMPSON: CORPORATE BOARDS MUST DIVERSIFY TO INCLUDE WOMEN AND ETHNIC MINORITIES
New York City Comptroller William C. Thompson, Jr. is calling on sixteen Fortune 500 companies to increase the representation of women and ethnic minorities on their Boards of Directors.
"Given the rapid ascension of women and ethnic minorities in senior management, entrepreneurship and senior policymaking positions in the
In letters to the companies, Thompson stressed that "I am particularly troubled when companies in which the funds are invested evince insensitivity and indifference to the absence of diversity on their boards of directors."
The letters - one of which can be read at www.comptroller.nyc.gov - pointed out the "notable lack of diversity" on the Boards of the sixteen companies, which are all within the Fortune 500.
"This glaring absence of diversity places the companies at a competitive disadvantage and poses significant risk to their reputation and public acceptance in an increasingly diverse marketplace," said Thompson.
Public Advocate Betsy Gotbaum, who initially requested the action, said: "Companies with diverse boards make for better investments, and are proven to have competitive advantages. Women and minorities should be fully represented in the corporate boards of Fortune 500 companies -- and until ethnic and gender diversity in these boards becomes the norm, we need to keep pushing for this progress. I am glad to work with the Comptroller to encourage these companies to increase the representation of women and ethnic minorities."
Thompson cited a recent report and study attributing corporate diversity for boosting competitive advantage and performance. The report by Virtcom Consulting, for instance, stated that a diverse board is the most important aspect of corporate diversity.
Thompson sent the letters to: Affiliated Computer Services, Inc. of Dallas, TX; Autoliv, Inc. of Stockholm, Sweden; BJ Services Company of Houston, TX; Chesapeake Energy Corporation of Oklahoma City, OK; Frontier Oil Corporation of Houston, TX; Hertz Global Holdings, Inc. of Park Ridge, NJ; Hovnanian Enterprises, Inc. of Red Bank, NJ; L-3 Communications Holdings, Inc. of New York, NY; Liberty Global, Inc. of Englewood, CO; Liberty Media Corporation of Englewood, CO; National Oilwell Varco, Inc. of Houston, TX; NVR, Inc. of Reston, VA; Reliance Steel & Aluminum Company of Los Angeles, CA; Shaw Group, Inc. of Baton Rouge, LA; Smith International, Inc. of Houston, TX; and, Tesoro Company of San Antonio, TX.
The Pension Funds are the: New York City Employees' Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund, Teachers' Retirement System of New York, and New York City Board of Education Retirement System.
The Pension Funds have 10,278,826 shares in the companies valued at $205,212,872.
To date, five companies have responded to Thompson. NVR, Inc., a company in the homebuilding industry; Chesapeake Energy Corporation, a company involved in natural gas exploration and production; Autoliv Inc., a company which develops, manufactures, and supplies automotive safety systems; L-3 Communications, a defense contractor in communications and aircraft modernization and maintenance; and, Liberty Global, the leading international cable operator offering advanced video, telephone, and broadband internet services, have sent letters to Thompson.
The Chairman of NVR's Board of Directors, Dwight C. Schar, responded, "I would also like to assure you that the Board's Nominating Committee recognizes the importance of a diverse Board and has a stated goal of identifying well-qualified director candidates that would provide such diversity."
Chesapeake Energy's Chairman and CEO, Aubrey K. McClendon, expressed hope that "...the pool of potential board members with both the industry expertise we seek and ethnic and gender diversity will become larger in the future."
Autoliv's General Counsel and Secretary Lars Sjöbring wrote: "I note that the Company has an all male Board, which fact may be what prompted the letter. However, the Board is compromised of members from several different countries and from several different cultures. We thus have directors identifying as Japanese, Swedish, German and American."
Allen E. Danzing, L-3 Communications Corporation's Vice President, Assistant General Counsel and Assistant Secretary, wrote: "...the Nominating/Corporate Governance Committee Charter was amended in 2009 to add a statement that the Committee will carefully consider the benefits of gender and racial diversity in the composition of its Board of Directors."
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