Pensions to SEC: Bulk Up Corporate Board Diversity Disclosure

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A group of nine public pension funds – including CalPERS, CalSTRS and the New York Common Retirement Fund – this week wrote a letter to the SEC asking the agency to bulk up its rules regarding the disclosure of a company’s board diversity.

The letter can be read here.

More details from Pensions & Investments:

The pension funds called on the Securities and Exchange Commission to update its board nominee disclosure rules in order to help investors determine whether there is an appropriate mix of skills and backgrounds. “Better disclosure will lead to better investment decisions,” said North Carolina Treasurer Janet Cowell, sole trustee of the $88.8 billion North Carolina Retirement Systems, Raleigh.

The group called on SEC officials to update existing rules by requiring companies to create a chart or matrix of each nominee’s gender, race, ethnicity, skills, experiences and attributes. Citing more robust disclosure regimes in Australia, Canada, Singapore and the European Parliament, the group said that greater disclosure can prevent “groupthink.” The SEC’s 2010 amendments on disclosure show “no meaningful increase in diversity on corporate boards,” the letter said, adding that shareholder proposals will continue to press the case as well.

“As investors, we need better information on the makeup of our portfolio companies’ boards so we can assess whether they’re prepared to meet challenges or are letting groupthink creep in,” said New York state Comptroller Thomas P. DiNapoli, who is sole trustee of the $181.7 billion New York State Common Retirement Fund, Albany.

The entities that signed the letter include: Ohio PERS, the Washington State Investment Board, the New York City Retirement Systems, CalPERS, CalSTRS, the Illinois State Board of Investment, the Connecticut Retirement Plans & Trust Funds, and the North Carolina Department of the Treasurer.

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