Eric Shostal is Senior Vice President of Research and Engagement, and Brianna Castro is Senior Director of U.S. Research at Glass, Lewis & Co. This post is based on their Glass Lewis memorandum. Related research from the Program on Corporate Governance includes Politics and Gender in the Executive Suite by Alma Cohen, Moshe Hazan, and David Weiss (discussed on the Forum here); and Will Nasdaq’s Diversity Rules Harm Investors? by Jesse M. Fried (discussed on the Forum here).
Background
Because company disclosure is a critical aspect of assessing the mix of diverse attributes and skills of directors, Glass Lewis tracks the quality of board diversity disclosures in company proxy statements.
Our 2021 Proxy Paper reports for companies in the S&P 500 index included an assessment of company proxy statement disclosures relating to board diversity, skills, and the director nominating process. Specifically, we reflected how a company’s proxy statement presented the following features:
- Director Race and Ethnicity Disclosure: the board’s current percentage of racial/ethnic diversity;
- Diversity Considerations for Director Candidates: whether the board’s definition of diversity explicitly includes gender and/or race/ethnicity;
- Rooney Rule or Equivalent: whether the board has adopted a policy requiring women and minorities to be included in the initial pool of candidates when selecting new director nominees;
- Director Skills Disclosure (Tabular): board skills disclosure.
This post provides insight into our findings for 2021 from these assessments of S&P 500 companies’ proxy disclosures.
