Magaziner announces proxy voting initiative to encourage board diversity

R.I. GENERAL TREASURER Seth Magaziner said Rhode Island will vote no any time a company nominates a slate of directors that would cause fewer than 30 percent of its directors to be women or minorities. / PBN FILE PHOTO/ MICHAEL SALERNO
R.I. GENERAL TREASURER Seth Magaziner said Rhode Island will vote no any time a company nominates a slate of directors that would cause fewer than 30 percent of its directors to be women or minorities. / PBN FILE PHOTO/ MICHAEL SALERNO

PROVIDENCE – General Treasurer Seth Magaziner has created a new proxy voting policy for pension fund companies because he wants to see more diversity on corporate boards.
This is an initiative to hold companies that the state pension invests in accountable for diversifying their boards, Magaziner said in a news release on Wednesday.
“Any time a company nominates a slate of directors that would cause fewer than 30 percent of its directors to be women or racial minorities, the state of Rhode Island will vote no,” Magaziner said.
“The message we are sending to these companies is simple: if you don’t feel that you can find enough qualified women or people of color to serve on your boards, you are not looking hard enough,” he said.
Magaziner said some of the Fortune 500 companies Rhode Island is expected to oppose at annual shareholder meetings this spring include Hess Corp., Hershey Co., ConocoPhillips, EMC Corp. and Phillips 66.
According to the news release, Massachusetts recently instituted a similar policy, but with a 25 percent gender diversity threshold.
“While the business case for gender diversity is well established, the pace of progress has been far too slow,” Women’s Fund of Rhode Island Board Chairwoman Daria Kreher said. “The Women’s Fund commends Treasurer Magaziner and the State Investment Commission for their leadership on this issue of crucial importance to our nation’s economic future.”

The news release cited a study by the consulting firm McKinsey last year that said companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians, and that companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.

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