Seeks to Engage on Board Composition, Diversity, and Refreshment

On September 8, 2017, Scott Stringer, the New York City Comptroller who serves as the investment adviser to the New York City Pension Funds, issued a press release announcing the launch of the Boardroom Accountability Project 2.0, through which the Comptroller is seeking to engage with U.S. public companies on board composition, diversity, and refreshment. The initial phase of the Boardroom Accountability Project, which was launched in 2014, was a driving force behind the widespread adoption of proxy access—the right of large, long-term stockholders to nominate board candidates for inclusion in a company's proxy materials.

As part of the launch of the Boardroom Accountability Project 2.0, Comptroller Stringer sent letters to 151 public companies calling for disclosure of the race, gender, and skills of their directors in a standardized "matrix" format. Additionally, the Comptroller seeks to enter into a dialogue regarding the board refreshment process of these companies. The press release includes hyperlinks to (1) the full list of companies that received letters, (2) an example of both versions of the letter (for companies with and without proxy access), and (3) an example of a board matrix.

Companies that received the Comptroller's letter should consider governance practices, culture, and other relevant factors when determining how to appropriately respond. Based on the letter and recent statements made by various institutional investors, including Vanguard, Blackrock, and State Street, it is expected that board composition, diversity, and refreshment will be areas of significant focus for investors in the upcoming proxy season.