NRG Among Companies That Bowed to Pension Fund on Board Diversity

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By Andrea Vittorio

NRG Energy Inc. is among dozens of companies that have added women and minorities to their boards or disclosed more about their directors in the year since New York City Comptroller Scott Stringer started a campaign on diversity.

Stringer, who oversees the city’s $175 billion public pension funds, asked 151 publicly traded companies that the funds invest in to report their directors’ race, gender, and skills. More than 35 companies, including PepsiCo Inc., Honeywell International Inc., and power provider NRG, now provide such disclosures.

NRG, eBay Inc., and close to 50 other companies have changed their board makeup, electing a collective 59 women and minorities as directors since Stringer’s campaign launched in September.

At the launch, “we heard every reason why it couldn’t happen,” Stringer said in a June 27 statement. “Today, less than a year later, we’re already seeing a turning point in boardroom culture, and our momentum for demanding higher board quality, transparency and deeper diversity is only building.”

Another 24 companies, from Intel Corp. to Union Pacific Corp., have said they would include women and minorities in the candidate pool for each board search going forward.

Record Reply

Stringer isn’t claiming full credit for these company actions, since other shareholders have also been pressuring companies to diversify their mostly male, mostly white boardrooms. But his earlier campaign to give shareholders more of a voice in nominating directors helped open the door to conversations about diversity.

When that campaign began, just six U.S. companies offered shareholders what’s known as proxy access, which lets investors put their own board nominees on a company’s ballot. Today, more than 520 companies have adopted proxy access, including more than 140 of the 151 companies targeted in the comptroller’s latest disclosure drive.

This drive got a record reply, with more than half of the targeted companies responding to his initial invite to talk about board makeup.

Stringer also sent six companies shareholder proposals asking for disclosure on their directors’ diversity. Exxon Mobil Corp. was the only company to push back and tell shareholders to vote against it. The proposal ended up getting 16.5 percent support anyway, according to the oil giant’s tally.

The comptroller withdrew the rest of the proposals after NRG and four other companies agreed to provide more reporting. His office isn’t naming the other companies until his annual review of the company meeting season comes out later this year.

To contact the reporter on this story: Andrea Vittorio in Washington at avittorio@bloomberglaw.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com

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