Board diversity has been an area of investor focus in recent years and this year is no exception. While in prior years investors' focus was largely centered on gender diversity, ongoing social unrest and protests over systemic racism have catalyzed an expansion to now include consideration of racial and ethnic diversity as well. Investors of varying stripes are calling for companies to disclose their board diversity profiles, to make clear commitments towards diversity goals and take concrete measures to achieve them. Recent examples of changes on the horizon include:

Richard Lacaille, Global Chief Investment Officer of State Street Global Advisors released a letter to board chairs of its portfolio companies in late July indicating that it will be looking for companies to provide diversity data and details on their strategies related to racial and ethnic diversity. The letter specifically asks for communications to shareholders in five key areas:

  1. Strategy: what role does diversity play in a company's broader human capital management practices and long-term strategy
  2. Goals: what diversity goals exist, how do those goals contribute to a company's overall strategy, and how are they managed and progressing
  3. Metrics: provide measures of global employee and board diversity, including racial and ethnic makeup, citing in particular the Equal Employment Opportunity Commission's EEO-1 survey as a framework for US companies to use in reporting diversity by race, ethnicity and gender across employee seniority levels
  4.  Board: disclose the goals and strategy related to racial and ethnic representation at the board level, including how the board reflects the diversity of the company's workforce, community, customers and other key stakeholders
  5. Board oversight: describe how the board executes its oversight role in diversity and inclusion

He also communicated the 10 State Street Actions the company itself is undertaking to address racism and inequality.

The New York City Comptroller, which launched the third phase of the Boardroom Accountability Project in 2019 (calling on 56 S&P 100 companies to consider both women and people of color for open board seat and CEO appointments), is now looking to 67 S&P 100 companies that have issued supportive statements on equality to disclose race, ethnicity and gender statistics of their workforce by publicly reporting their annual EEO-1 Report data.  While change does not happen overnight, many companies are acting swiftly to improve their diversity practices.  During the 2020 proxy season, Boardroom Accountability 3.0 resulted in the adoption of diverse board and CEO candidate search policies at 14 companies. And not even three months after publishing its letter seeking EEO-1 data disclosure, 34 companies have already committed to doing so. According to the Comptroller's Office, at present only 29 companies report this data.  Accordingly, its campaign to date has resulted in a more than 100% increase in the number of reporting companies.

Legal and General Investment Management in October announced plans to target all-white boards in the S&P 500 and FTSE 100. It warned these companies that beginning in 2022, it will vote against the re-election of the chair of the nominating committee at companies that fail to add Black, Asian or other minority ethnic candidates.

After soliciting corporate investor relations officers this past summer to voluntarily disclose the racial and ethnic makeup of their boards and senior management, ISS in September announced it had added data on the race and ethnic backgrounds of senior leaders at over 6,000 public companies. It reported compiling this data through its outreach as well as from corporate filings and other publicly available information.1

California, which previously passed a law requiring publicly traded companies headquartered in the state to include a ratio of females on their boards of directors, has expanded the law to also include a ratio of minority members.

The Board Challenge recently announced a list of 17 companies, including Heritage Crystal-Clean, Nextdoor and Zillow, that have committed to adding at least one black director to their boards within the next year. Companies such as Corning, Lyft, NASDAQ, Uber and Verizon each already have at least one black director, with plans for further advancements towards workplace diversity and equality.

On October 28, 2020, twenty investor organizations representing over $3 trillion in assets under management sent letters to Russell 3000 companies requesting disclosure on racial, ethnic and gender board data as part of the Russell 3000 Board Diversity Disclosure Iniattive. The investor coalition urged that companies include this information in 2021 proxy statements. 

In light of the steps being taken and changes already underway as illustrated above, it is very likely that corporate diversity practices will significantly shape the 2021 shareholder proposal landscape.

What can you do now?

  • Assess your board's oversight of diversity, equity and inclusion. Based on that information, you may want to consider amending committee charters and corporate governance guidelines, as appropriate, to formalize roles and responsibilities, and articulate your company's overall framework.
  • Be proactive and make sure your board is informed and prepared. The board should know your company's diversity statistics, and be actively involved in the approval and monitoring of goals relating to workforce diversity, as well as the company's stance on disclosing, or not disclosing, this information. Should your company choose not to disclose information, have a clear explanation for your investors as to why you are not doing so.

Georgeson can help.

Whether it's conducting an audit of your governance practices, providing advice on how to approach board and workforce diversity policies and practices, conducting shareholder research, or developing strategies for "what if" scenarios, Georgeson's team of experts is here to help. Contact us today by email at or call 212 440 9800 to learn how Georgeson can help you prepare for all possibilities.


Georgeson will continue to track new initiatives and update this resource. Last update: October 30, 2020.