Public Pension Funds Petition SEC For More Disclosure on Board Diversity

Stay current on changes and developments in corporate law with a wide variety of resources and tools.

By Yin Wilczek

April 1 — Nine public pension fund supervisors March 31 asked the Securities and Exchange Commission to require more disclosure about board diversity.

In a joint rulemaking petition, the group asked that the SEC amend Regulation S-K to require companies to “indicate, in a chart or matrix,” each director nominee's “gender, race, and ethnicity,” in addition to the skills, experiences and attributes already required by the regulation.

“As large institutional investors, we have a real interest in electing a slate of board nominees who are well-positioned to help carry out a company’s business strategy and meet our long-term investment needs,” the group said. “We believe better disclosure about the board’s skills, experiences, gender, race, and ethnic diversity can help us as investors determine whether the board has the appropriate mix to manage risk and avoid groupthink.”

The petition's signatories manage more than $1.12 trillion in assets. They include New York State Comptroller Thomas DiNapoli; New York City Comptroller Scott Stringer; Anne Simpson, director of global governance for the California Public Employees' Retirement System; Anne Sheehan, director of corporate governance for the California State Teachers' Retirement System; and Denise Nappier, treasurer of the Connecticut Retirement Plans and Trust Fund.

Rule Amendments 

In late 2009, the SEC adopted proxy rule changes that required companies to provide more information about directors and director nominees, including their experience, attributes or skills that led to their being chosen by the board.

The petitioners told the SEC that the amendments have not made it easier for shareholders to assess board diversity and their ability to manage risk. They also noted that since 2010, when the amendments went into effect, there has been no “meaningful increase” in board diversity.

Citing statistics from the Catalyst Alliance for Board Diversity, the group observed that in 2010, the percentage of women and minority directors on Fortune 500 companies was 25.5 percent. By 2012, that figure had moved only slightly to 26.7 percent, the petitioners said.

SEC Chairman Mary Jo White has called on corporations and shareholders to do more to increase board diversity, noting that women continue to be underrepresented in U.S. boardrooms.

Shareholder proponents have tried to do their part. Most recently, New York State Comptroller DiNapoli and Trillium Asset Management announced that they withdrew a resolution at eBay Inc. calling for increased boardroom diversity after the company took steps to increase the number of women and other minorities on its board.

To contact the reporter on this story: Yin Wilczek in Washington at

To contact the editor responsible for this story: Ryan Tuck at

The petition is available at


Request Corporate on Bloomberg Law