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Pension Fund Leaders Term Corporate Board Diversification ‘Unacceptably Slow,’ Call for Increased Attention From Investors, Corporate Boards
California State Treasurer John Chiang joins group of fiduciaries from funds with more than $1 trillion under management

PR16:21
June 1, 2016

Contact: Marc Lifsher
916-653-2995

SACRAMENTO – California State Treasurer John Chiang today joined a group of state and local officials who contend that corporate boards have been too slow to diversify their ranks and that institutional investors should increase their focus on board diversity as a corporate governance priority.

The joint statement emphasizes that racial and lesbian, gay, bisexual, and transgender (LGBT) diversity as well as gender diversity are critical dimensions of effective board composition and performance.

“There is broad agreement that a diverse corporate board is good for business,” Treasurer Chiang said. “Boards with directors, who possess a wide range of skills and experiences, are better positioned to oversee company strategy, risk mitigation and management performance.”

Statistics show that board diversification has been slow—or has even regressed. White directors hold 85 percent of the board seats at the largest 200 S&P 500 companies, and the percentage of those boards with exclusively white directors has increased over the last decade.

Men occupy 80 percent of all S&P 500 board seats. It is also estimated that there are fewer than 10 openly lesbian, gay, bisexual, or transgender directors among Fortune 500 companies.

The 14 co-signers, many of them longtime leaders on the issue of board diversity, are fiduciaries for pension funds responsible for the retirement security of six million participants and with more than $1 trillion in assets under management.

In California, the push for greater corporate board diversity has been led by the state's two influential pension funds, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS). Respectively, they are the two biggest public pension funds in the nation.

In particular, companies need to seek out new directors, who have personal expertise and experience in crafting strategies to combat global warming and its contribution to harmful climate change.

“More work still needs to be done,” said Chiang. "We will not see more diversity until we see more turn-over on corporate boards. To that end, CalPERS and CalSTRS should continue advocating for proxy access, which will provide shareowners with a cost-effective means for nominating their own candidates and provide investors with greater ability to shape the composition of a board.”

Chiang and the other statement signers will be reaching out to other pension fund leaders urging them to join the call for an increased focus on board diversity.

Read Joint Statement of Corporate Board Diversity

Those who signed the statement include:

John Chiang, California State Treasurer

Contact: Marc Lifsher, Communications Director
Phone: 916-653-2995
Email: Marc.Lifsher@treasurer.ca.gov

Betty Yee, California State Controller

Contact: Taryn Kinney, Public Information Officer
Phone: 916-324-2709
Email: tkinney@sco.ca.gov

Kurt Summers, Chicago City Treasurer

Contact: Alexandra Sims, Senior Advisor
Phone: 312-744-3363
Email: Alexandra.sims@cityofchicago.org

Denise Nappier, Connecticut State Treasurer

Contact: David Barrett, Communications Director
Phone: 860-702-3164
Email: david.s.barrett@ct.gov

Michael Frerichs, Illinois State Treasurer

Contact: Greg Rivara, Press Secretary
Phone: 312-814-1901
Email: GRivara@illinoistreasurer.gov

Peter Franchot, Maryland State Comptroller

Contact: Peter Hamm, Communications Director
Phone: 410-260-7060
Email: phamm@comp.state.md.us

Nancy Kopp, Maryland State Treasurer

Contact: Susanne Brogan, Deputy Treasurer - Public Policy
Phone: 443-924-9540
Email: sbrogan@treasurer.state.md.us

Deborah Goldberg, Massachusetts State Treasurer

Contact: Chandra Allard, Communications Director
Phone: 617-367-6900 Ext. 620
Email: callard@tre.state.ma.us

Scott Stringer, New York City Comptroller

Contact: Eric Sumberg, Director of Communications
Phone: 212-669-3535
Email: esumberg@comptroller.nyc.gov

Thomas DiNapoli, New York State Comptroller

Contact: Matthew Sweeney, Assistant Communications Director
Phone: 212-383-1388
Email: msweeney@osc.state.ny.us

Ted Wheeler, Oregon State Treasurer

Contact: James Sinks, Communications Director
Phone: 503-378-4329
Email: james.sinks@ost.state.or.us

Alan Butkovitz, Philadelphia City Controller

Contact: Brian Dries, Communications Director
Phone: 215-686-8869
Email: brian.dries@phila.gov

Seth Magaziner, Rhode Island General Treasurer

Contact: David Ortiz, Communications Director
Phone: 401-403-6674
Email: dortiz@treasury.ri.gov

Dan McAllister, San Diego County Treasurer-Tax Collector

Contact: Antoinette Chandler, Chief Deputy Treasurer
Email: Antoinette.Chandler2@sdcounty.ca.gov

For more news, please follow the Treasurer on Twitter at @CalTreasurer, and on Facebook at California State Treasurer's Office.