PA Treasurer McCord Stresses Need for Greater Corporate Board Diversity Following Latest GMI Ratings Report

Suggests term limits could improve diversity, performance and governance

Harrisburg – Pennsylvania State Treasurer Rob McCord today continued his call for greater gender diversity on corporate boards after the global research firm GMI Ratings released its annual “Women on Boards” report, which showed little progress in the U.S. over the past year. 

Among the companies studied in its report, GMI Ratings found the percentage of female directors in large companies – those among the S&P 500 – rose only one-half of a percentage point since December 2011. The rate of increase was slightly higher among smaller companies in the S&P Midcap and S&P Smallcap indices. Since 2009, the percentage of female directors on U.S. boards that GMI tracked rose only 1.9 percentage points.

“Research has suggested greater diversity on corporate boards translates into better performance and stronger governance, which is important to me as an institutional investor who is responsible for safeguarding taxpayer dollars,” said Treasurer McCord. “Today’s report is another indicator publicly traded companies are making slow progress. We need to think innovatively about how we address this challenge, and shareholders should demand change.”

Treasurer McCord has suggested institutional investors should take a page from the public sector and demand term limits for at least a portion of board seats at all public firms. Some form of term limits – even if only for a portion of all board seats – would create a greater number of vacancies on corporate boards of directors, which would create more opportunities for talented and qualified people with diverse experiences and perspectives.

“As someone who has sat on a number of boards, I know the value of having multiple views discussed around the table,” said Treasurer McCord. “A more diverse board composition leads to more ideas and fresh thinking, and it forces people to consider alternative viewpoints and challenge the status quo. All of this can lead to better oversight and better returns for shareholders.”

The Treasurer pointed to a 2011 study by Credit Suisse, which measured the performance of 2,360 companies. It found companies with at least $10 billion in market capitalization and at least one female board director outperformed companies with no women directors in share price performance by 26 percent between 2005 and 2011. Similarly, small- to mid-cap companies with female board directors outperformed those with only male directors by 17 percent over the same period. 

Treasurer McCord has advocated for greater gender diversity as a member of the Thirty Percent Coalition – a group of public and private sector leaders whose goal is to attain at least 30 percent female representation on public company boards by the end of 2015. Additionally, the McCord Treasury has sought to leverage its influence as an institutional investor to encourage companies to improve diversity among their corporate ranks. In 2011, the McCord Treasury amended its proxy guidelines, in order to:

  • Maintain an open dialogue with corporate leadership and board nominating committees to include representation of women and minorities;
  • Sponsor, submit and support shareholder resolutions that seek a greater representation of women on corporate boards;
  • Encourage amending board nominating committee charters to ensure that female candidates are routinely sought in board searches; and
  • Encourage other state treasurers and colleagues to join Pennsylvania in taking these actions.

To learn more about the McCord Treasury, please visit

Media contact: Gary Tuma, 717-787-2465 or