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Rating:Social Funds Focus On Corp Board Diversity Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, May 23, 2003

Social Funds Focus On Corp Board Diversity

Reported by Abigail La Croix

Socially responsible firms including The Calvert Group, PaxWorld Funds, and Domini Social Investments have started crafting a model charter language for corporate nominating and governance committees to ensure that diversity in corporate board rooms is achieved.

The Sarbanes-Oxley reform and proposed New York Stock Exchange rules requiring companies to have a nominating committee comprised solely of independent directors and a written charter describing the committee's purpose and principles are the drivers behind the initiative.

"As potentially hundreds of corporate boards bring on new members, companies have an unprecedented opportunity to increase the number of women and people of color on their boards, which is an excellent way to assure the diversity of experience and perspective needed for sound corporate governance," said Barbara Krumsiek, president and CEO at Calvert.

Calvert's model for nominating-committee charter language has made the following provisions: The nominating committee shall advise the board on matters of diversity, such as race, gender, culture, and geography. It shall also develop criteria for board membership that strives to attain diverse backgrounds and skills by searching for candidates from all walks of life including, government, academia, private enterprise and non-profit organizations. In addition, the committee shall develop recruitment protocols that seek to include diverse candidates as part of every director search.

Similarly, PaxWorld is gearing up plans to roll out its own version at the end of the second quarter, according to Anita Green, director of social research. The firm is advising the executive management and nominating committee to keep in mind that the group should reflect the community.

According to Calvert, progress in "cracking the boardroom ceiling" has been slow. The firm states that women account for about half the nation's workforce, college graduates and talent pool but occupy just 14% of Fortune 1,000 board seats, while African Americans hold just three percent and Hispanics one percent. 

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