Update: Wespath’s Corporate Engagements Promote Board Diversity and Human Rights Policies
April 11, 2016
Helping Place Women on Boards
Wespath Investment Management’s (Wespath) corporate engagement efforts promoting diversity have successfully influenced two S&P 500 companies to increase the number of female directors on their corporate boards. Consequently, we have withdrawn shareholder resolutions filed with Comcast and Simon Property Group.
Simon Property Group, one of the largest real estate companies and owner of shopping malls in the U.S., has also agreed to amend its director qualification policy to explicitly include women and minorities—as requested in our shareholder resolution.
We also have withdrawn a resolution filed with Equifax—the company has committed to adding a woman to its board in 2017.
We strongly believe diversity is a key attribute of a well-functioning board and demonstrates a measure of sound corporate governance. Research1 has shown that companies with diverse boards exhibit a stronger mix of leadership skills and improved understanding of consumer preferences (women control more than two-thirds of consumer spending in the U.S.2)—both are linked to better stock market and financial performance.
Board diversity—specifically the inclusion of women on boards—is an area of focus for Wespath as we work with companies to strengthen their environmental, social and governance (ESG) practices and create sustainable investments.
U.N. Guiding Principles on Business and Human Rights
Wespath also encourages companies to adopt the United Nations Guiding Principles on Business and Human Rights (Guiding Principles), in keeping with the call of the United Methodist Church General Conference 2012 in petition 21071.
Wespath’s human rights engagement efforts have included Caterpillar—a company that has come under scrutiny because of the use of its products in the Israeli settlements in the Palestinian territories. Our engagements on a number of human rights issues have proven to be productive. Caterpillar recently announced that in alignment with the Guiding Principles, it has expanded its human rights policy, provided more detailed reporting on the policy implementation to its board, and conducted a human rights impact assessment across its entire value chain, including its suppliers and dealers.
Wespath works with companies to address human rights and other ESG issues because we believe engagement can transform companies in ways that help make them more sustainable for the future, and that are in the long-term interest of Wespath’s beneficiaries. As an engaged investor, Wespath has a ‘seat at the table’ with the world’s largest companies and can play an influential role in promoting change in the companies in which we invest on behalf of our participants and institutional clients.
1 2012 and 2014 Credit Suisse research report, “Gender Diversity and Corporate Performance,” links board diversity to better stock market and financial performance (higher return on equity, higher price/book ratios and improved growth prospects).
2 July 2013 Fleishman Hillard research report, “Women, Power & Money: Wave 5”