Coalition Overview. Contact: Virgus Volertas UAW Retiree Medical Benefits Trust

Transcription

1 Coalition Overview Contact: Virgus Volertas UAW Retiree Medical Benefits Trust Diverse Search Company Toolkit Examples of Diverse Candidate Search Language

2 Overview The Midwest Investors Diversity Initiative is a coalition of institutional investors dedicated to increasing racial, ethnic, and gender diversity on corporate boards within six Midwest states to protect shareholder value and maximize returns. Coalition Highlights Formed in Members $300 Billion in assets under management Unique cohort that includes state treasurers, state pension funds, asset managers, faith-based investors, and VEBAs 2

3 Member List City of Chicago Grand Rapids Foundation (Michigan) Illinois State Treasurer s Office Ohio Public Employees Retirement System School Employees Retirement System of Ohio Segal Marco Advisors (Illinois) SEIU Master Trust (Illinois) Seventh Generation Interfaith (Wisconsin) State of Wisconsin Investment Board Sundance Family Foundation (Minnesota) Trinity Health (Michigan) UAW Retiree Medical Benefits Trust (Michigan) Wespath Benefits and Investments (Illinois) 3

4 The Business Case for Diversity Companies in the top quartile for gender diversity on their executive teams were 21% more likely to experience above-average profitability than companies in the fourth quartile. Companies in the top quartile for racial and ethnic diversity are 33% more likely to outperform on profitability than companies in the bottom quartile. -McKinsey, "Delivering Through Diversity" 4

5 Achievements In just two years MIDI has had significant results in company engagements Diverse Search Policy Adopted Diverse Candidate Added Diverse Search Policy Adopted Diverse Candidate Added Knowles Corp. A. Schulman Century Aluminum Ferro Corp. Littelfuse Knowles Corp. CME Group First Industrial Realty Trust Marten Transport SPS Commerce Ferro Corp. Taubman Centers Rex American Resources Corp. SPS Commerce Thor Industries The Tile Shop TransDigm Group First Industrial Realty Trust Gogo Inflight Marathon Petroleum Taubman Centers United Continental Holdings 5

6 What We Seek Work with Company Nominating & Governance Committees to: Odds of Selecting a Minority Candidate* Finalist Pool Selection Adopt a policy for diverse search Require minority and female candidates to be interviewed for every open seat Require any third party search firms to include such candidates in initial search pool 193.7x more likely in this pool Odds of Selecting a Female Candidate* Finalist Pool Selection Expand candidate pool to include candidates from non-traditional sources 79.1x more likely in this pool *Based on data from If There s Only One Woman in Your Candidate Pool, There s Statistically No Chance She ll Be Hired by Johnson et al. 6

7 Tools to Help Companies Through the work of coalition members and Annalisa Barrett, Clinical Professor of Finance, University of San Diego School of Business, we have developed tools to help companies take the necessary steps to diversify their boards Diverse Search Company Toolkit Examples of Diverse Candidate Search Language 7

8 Diverse Search Company Toolkit A tool designed to assist a board and nominating committees to implement a diverse search policy from adoption to the final steps of the search process including best practice language, board assessment, succession planning, skills matrixes and resources Checklist for Assessing and Increasing Board Diversity 1. Adopt a Diverse Search Policy 2. Expand the Criteria for Qualified Board Candidates 3. Develop a Board Composition Strategy 4. Explore Diverse Candidate Search Resources 5. Eliminate Unconscious Bias 6. Disclose Board Diversity Status to Investors 8

9 Examples of Diverse Candidate Search Language Provides excerpts of diversity search language adopted by 33 companies representing a broad spectrum of business sectors 9

10 2019 Engagement Plans For 2019, the Coalition plans to engage companies with the following attributes: No ethnic/racially diverse directors At or below peers in director gender diversity No diverse search policy Company State Ethnic/Racial Diverse Pct. Ethnic/Racial Diverse Women Pct. Women Peer Pct. Women Rooney Rule? Company 1 MI % 18% No Company 2 WI % 22% No Company 3 IL % 16% No Company 4 IN % 20% No Company 5 IL % 17% No Company 6 WI % 18% No Company 7 WI % 13% No Company 8 WI % 18% No Company 9 OH % 13% No Company 10 OH % 25% No Company 11 MN % 22% No Company 12 OH % 17% No Note: Data compiled using ISS and Equilar databases 10

11 Questions? Questions can be directed to Virgus Volertas of the UAW Retiree Medical Benefits Trust at 11