Treasurer McCord, Nationwide Coalition Urge Greater Diversity on Corporate Boards

Letter to 41 S&P 500 chairmen stresses improved performance of companies with women in director positions

Harrisburg, June 29, 2012 – Corporations with greater gender diversity are “better governed, better-managed and have better long-term growth prospects,” wrote Pennsylvania Treasurer Rob McCord and 73 other thought leaders from the public and private sectors in a jointly signed letter sent to executives of 41 S&P 500 companies that lack any women representation on their boards of directors.

The letter, coordinated by the Thirty Percent Coalition, expressed a willingness on the part of the co-signors to engage with each board’s nominating committee in order to meet a goal of having women hold 30% of board seats across all public companies by 2015.

“During my career in the private sector, when I met with boards of directors, too often those groups were too stale, too pale, and too male,” said Treasurer McCord. “More diversity brings about more diverse opinions, which forces leaders to engage in healthy debate and consider issues another vantage point. The result – backed by evidence – is clear: diversity translates into greater corporate prosperity, and that is better for shareholders.”

A March 2011 report by Catalyst, a New York-based research organization, entitled “The Bottom Line: Corporate Performance and Women’s Representation on Boards," measured the financial performance of Fortune 500 companies between 2004 and 2008. It found companies that sustained at least three women board directors for at least four of the five years realized an 84% better return on sales, 60% higher return on invested capital, and 46% better return on equity.

As Treasurer McCord and the other co-signors wrote in the letter, “When women are at the table, the discussion is richer, the decision-making process is better, management is more innovative and collaborative, and the organization is stronger. Quite simply, gender diversity has positive financial consequences.”

Despite these “positive financial consequences,” the letter notes there has been very little progress with respect to expanding the representation of women on corporate boards. Catalyst’s 2011 census of Fortune 500 companies found women held just 16.1% of board seats in 2011 compared to 15.7% in 2010. The 2011 percentage mirrored a report from ION that found women represented only 16.1% of the 542 new independent directors elected to corporate boards in regions critical to the nation’s economy that year.

Treasurer McCord’s involvement with the Thirty Percent Coalition’s campaign follows other steps by his administration to leverage Treasury’s influence as an institutional investor to encourage companies to improve diversity among their corporate ranks. Last year, 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 www.patreasury.gov. To learn more about the Thirty Percent Coalition, visit www.30percentcoalition.org.

Media contact: Michael Smith, 717-787-2991 or news@patreasury.gov

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