02-14-2018
BlackRock has been referred to as the world’s biggest asset manager. Letters have been sent out from BlackRock to Russell 1000 companies with less than two female directors. These letters ask for the reason why so few women are directors and to report on how they intend to increase gender diversity on their boards. Bloomberg has reported that 367 Russell 1000 companies have less than two women on their boards. The Russell 1000 company index is considered to be the best representation of the U.S. stock market, according to Motley Fool.To urge companies to expand diversity, BlackRock asserted that the lack of diversity undermines a company’s ability to make effective strategic decisions as well as attracting and retaining employees. Voting guidelines from BlackRock set forth the expectation that “boards [are] to be comprised of a diverse selection of individuals who bring their personal and professional experiences to bear in order to create a constructive debate of competing views and opinions in the boardroom. In addition to other elements of diversity, we would normally expect to see at least two women directors on every board.”
BlackRock advises company boards to regularly assess the skills, performance, and the diversity of experience in current board members. Such information should help evaluate what new directors can bring to help create diversity. Boards are encouraged to self-reflect on internal processes for identifying new candidates and what mix of qualities are helpful to achieving the long-term strategies for the company. The Wall Street Journal has reported that State Street, also an asset manager, has also tried to encourage the addition of women to boards of companies by voting against the re-election of directors at some companies that failed to add women.