On September 8, 2017, New York City Comptroller Scott M. Stringer and the New York City Pension Funds announced the launch of the “Boardroom Accountability Project 2.0.”1 The goal of Project 2.0 is to make the boards of 151 U.S. public companies2 “more diverse, independent, and climate-competent, so that they are in a position to deliver better long-term returns for investors.” Comptroller Stringer and the NYC Pension Funds have sent letters3 to these 151 public companies seeking (i) disclosure of the race and gender of their directors, along with board members’ skills, in a matrix format4, and (ii) to enter into a dialogue regarding their board’s “refreshment” process. The letters also suggest that director independence and climate change expertise will be an important focus of the dialogue with the Comptroller.
The Boardroom Accountability Project 2.0, together with announcements this year from State Street5, BlackRock6 and Vanguard7, indicate that board diversity (including gender and race diversity), refreshment and climate expertise will be important issues for the 2018 proxy season. Companies should consider carefully how appropriately to respond to the Comptroller’s letter, taking into account the company’s own circumstances, governance structure and culture.
1 See press release here. The initial Boardroom Accountability Project, launched publicly in November 2014, pushed for public companies to adopt “proxy access” through the submission of proxy access shareholder proposals.
2 For a list of the companies that have received the Project 2.0 letter, see here.
3 For an example of the Project 2.0 letter, see here.
4 For an example of a board matrix as suggested by the Comptroller, see here. The Comptroller and other pension funds previously submitted a rulemaking petition in 2015 seeking mandatory disclosure of a board matrix that would specifically identify directors’ gender, race and ethnicity. See here.
5 See here.
6 See here.
7 See here.