Op-ed: Shareholders should act more aggressively on boardroom diversity in 2022. Here’s why
More diverse companies, both at board level and throughout the workforce, can outperform on financial metrics such as return on equity and higher earnings per share. They can also generate higher returns compared to their indices, according to GS Sustain 2020. Moreover, embracing diversity is key to ensuring that boards and management teams have a broad range of skill sets, opinions and ideas.While companies have made progress in bringing diverse voices to the boardroom, there is still a long way to go. Society is diverse, and companies need to reflect this. For example, in the U.S. racial or ethnic minorities make up 42% of the population but hold just 21% of S&P 500 board seats. Globally, women represent half the population and over $40 trillion in global consumer spending, yet in 2020 they held only 21% of corporate board seats.As an active asset manager, we believe investors should be active stewards of the companies in which they invest. We believe that proactive engagement and thoughtful proxy voting at our investee companies is important, and we seek to encourage companies to make positive changes in ways that serve the interests of shareholders as well as their wider stakeholders. In our view, shareholders should advocate for greater diversity in the boardroom and should cast their votes accordingly.
Shareholders should act more aggressively on boardroom diversity in 2022. Here’s why.