NYC Pension Funds’ Invite to Talk Board Makeup Gets Record Reply

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By Andrea Vittorio

Companies such as NRG Energy Inc. and Unum Group are more willing to talk with New York City Comptroller Scott Stringer about the makeup of their board than any other shareholder initiative he’s led.

Stringer, who oversees the city’s $180 billion public pension funds, has heard back from close to 130 of the 151 U.S. companies he invited in the fall to discuss diversity issues including bringing more women and minorities into the boardroom. That’s the highest initial response rate the funds have seen, according to the comptroller’s office.

Company responses to the invite and to Stringer’s call for publicly reporting directors’ race, gender, and skills have been “encouraging” so far, he said.

Power provider NRG recently added two new directors who make its board more diverse and improved its disclosure after talks with Stringer. Others such as insurer Unum have agreed to publicly report information on their directors’ race and gender for the first time.

Stringer’s latest boardroom push builds on an earlier campaign to give shareholders more of a voice in nominating directors. “We’re pleased that more companies are recognizing the importance of this work, as our campaign continues to gather momentum,” he said in a statement to Bloomberg Law.

Director Disclosure

About four in 10 of the nation’s largest companies by revenue now report the makeup of their board by gender, race, or ethnicity, according to data from Equilar Inc. But few disclose it in the standardized format Stringer is seeking.

“Diversity isn’t just a box to be checked,” he said. “It must be a living, breathing commitment because it’s a strategy for economic success.”

The pension funds also submitted shareholder proposals asking for more director disclosure at a handful of companies.

Exxon Mobil Corp. is the only company that has pushed back against that proposal by asking the Securities and Exchange Commission to keep it from going to a shareholder vote. The SEC hasn’t weighed in yet.

Stringer withdrew another proposal at NRG based on the improvements made to its board and its reporting. He also played a role in the departure of an activist-picked director, who Stringer said had a history of climate change denial that made him unfit to serve on NRG’s board.

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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