Shareholder Proponents Drop Resolution After eBay Steps Up Board Diversity Efforts

Bloomberg BNA’s Corporate Law & Accountability Report is available on the Corporate Law Resource Center. This news service keeps corporate practitioners informed of legal developments of...

By Yin Wilczek

March 26 — Shareholder proponents said they have withdrawn a resolution at eBay Inc. calling for increased boardroom diversity after the company took steps to increase the number of women and other minorities on its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.

Months after receiving the shareholder proposal jointly submitted by New York State Comptroller Thomas DiNapoli, Trillium Asset Management and others, eBay revised its Corporate Governance Guidelines to state that when searching for new directors, its board will “actively seek out highly qualified women and individuals from minority groups to include in the pool” from which board nominees are chosen.

The company also appointed two new women directors this year—Bonnie Hammer, chair of NBC Universal Cable Entertainment, and Gail McGovern, chief executive officer of American Red Cross (see related story, page 646).

There now are three women on eBay's board, which will consist of 15 members after the company's May 1 annual meeting. The third woman is Kathleen Mitic, founder and CEO of Sitch Inc., who has served as an eBay director since September 2011.

Commitment to Diversity 

When contacted for comment, eBay said in an e-mailed statement that it “values the perspectives of its shareholders and appreciated the opportunity to share its views with the New York State Comptroller and Trillium Asset Management about the company’s commitment to and efforts around diversity.”

In a joint release, DiNapoli and Trillium noted that when they filed their resolution in November, eBay lagged behind its peers in terms of board diversity. While commending eBay on its recent actions, the shareholder proponents noted that too many Silicon Valley companies remain diversity “laggards”.

“Different and diverse viewpoints offer fresh perspectives on day-to-day business and can benefit companies’ bottom lines,” DiNapoli said in the release. “We see far too many corporate boards and workplaces, particularly in the Silicon Valley tech sector, that are overly homogenized and at risk not just of stale thinking, but of damaging their reputations with the perception that their boardrooms are the exclusive enclave of white males.”

Trillium Vice President Susan Baker also said her firm will continue to press the issue. “Trillium and allies in the Thirty Percent Coalition have had many successful engagements about this important issue, and will be approaching dozens of companies in the year ahead,” she said.

Not Much Movement 

Securities and Exchange Commission Chairman Mary Jo White and others have pushed for board diversity, saying that women directors confer benefits such as higher shareholder returns. 

However, women continue to be under-represented on boards, in Silicon Valley as well as in other U.S. corporations. Only about 18 percent of directors in S&P 500 companies are women. 

Moreover, an Ernst & Young LLP report in February found that the percentage of board seats held by women increased 5 percent since 2006, but only increased by 1 percent a year since 2012). The EY report also found that only about 15 percent of S&P 1500 companies increased the number of their female directors since 2013.

To contact the reporter on this story: Yin Wilczek in Washington at ywilczek@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

DiNapoli and Trillium's release is available at http://www.osc.state.ny.us/press/releases/mar15/032615.htm.