The Spotlight on 'Diversity Denier' Directors Will Intensify — Exponentially
Throughout the history of the United States, meaningful two-way conversations about race have been as frequent as lightning striking twice in the same place. Meaningful conversations about race in corporate boardrooms have been as likely as lightning striking three times in the same place – until now.
September 28, 2021 at 01:22 PM
8 minute read
Throughout the history of the United States, meaningful two-way conversations about race have been as frequent as lightning striking twice in the same place. Meaningful conversations about race in corporate boardrooms have been as likely as lightning striking three times in the same place — until now.
Prior to the 2021 Proxy Season, conversations in the boardroom around the topic of race may have been increasing. However, they have not produced the kind of results that many people want to see. There were 95 Nomination and Governance (Nom Gov) committee chairs that had high percentages of shareholders vote to withhold support from them this year primarily because their companies did not disclose information regarding the racial composition of their board. This could be the harbinger of the personalization of accountability for directors. Nom Gov chairs are perhaps the first group of directors that may feel pressure over racial equity issues from stakeholders, but they won't likely be the last.
Willing non-disclosure race-related data is tantamount to denying that diversity matters.
A review of shareholder proposals from the 2021 proxy season shows an increase in "racial equity related" filings, indicating growing shareholder concern about what some would call "a race blind spot of the board." Investors are asking directors about race-related issues, which leads one to ask, are Nom Gov chairs at increased risk of having shareholder withhold votes cast against them? A simple reading of the withhold votes for "diversity denier" directors is a failure to translate good intent to results that may shorten their tenure on the board.
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