OAKLAND, CA, JUNE 19, 2020 — On June tenth, investors made it clear that diversity matters. The Nia Impact Capital (Nia) shareholder resolution received a preliminary vote of 70% investor support at Fortinet (FTNT) general annual meeting, requesting the release of quantitative diversity data. This high vote shows that investors see the importance and materiality of a diverse and inclusive governing team and workforce. Investors are now demanding that companies both measure their diversity and inclusion efforts and disclose comparable, quantitative data on the effectiveness of these programs.
“Investors have made clear that they consider the way a company manages its diversity and inclusion programs is related to share value,” said Meredith Benton, As You Sow’s diversity and gender equality program manager consultant. “This level of unprecedented support for diversity disclosure shows a massive shift in understanding of the materiality of workplace equity.”
Nia's resolution requested that the company report annually on its diversity and inclusion efforts, including the process that the board follows for assessing the effectiveness of its programs and effectiveness, as reflected in any goals, metrics, and trends related to its promotion, recruitment, and retention of protected classes of employees. Nia did not file this resolution as a result of workplace equity concerns specific to the company.
Fortinet’s investors call for greater disclosure builds on an Investor Statement on Workplace Equity Disclosure, signed by $1.73 trillion in represented assets under management, that Nia signed and was facilitated by As You Sow. The statement explained that corporate transparency on diversity and inclusion was generally insufficient, and that investors need more data on the effectiveness of corporate workplace equity practices.
Investor interest in this information stems from studies linking diversity to innovation, new market identification, risk management, and thoughtful decision making. Strong corporate management of diversity and inclusion programs are increasingly seen by the marketplace as a proxy for overall operational excellence.
As cited in Nia's resolution, despite such benefits, significant barriers exist for diverse employees advancing within their careers. Women enter the workforce in almost equal numbers as men (48%). However, they only comprise 22% of the executive suite; as a percentage of representation, this indicates a drop of 26%. Similarly, people of color comprise 33% of entry level positions, yet only 13% of the c-suite.
Leaders in diversity disclosure are emerging, with best practices comprised of the release of workforce composition, promotion, recruitment, retention, and pay data. Other resolutions filed this year by As You Sow and Nia, working alongside Whistle Stop Capital, were withdrawn prior to the investors' annual meetings, as the companies committed to substantive improvements in their disclosure of diversity data. These included: Gilead Sciences, JPMorgan Chase, Mastercard, MetLife, Morgan Stanley, Sarepta, and SunPower.
“Guess What? Diversity Matters! At Nia we have been focused on diversity and inclusion since inception,” said Kristin Hull, PhD, founder, CEO, and CIO of Nia Impact Capital. “Now other investors are coming on board to the concept that an inclusive and diverse workforce is material to a well run company. The research has long been there to show that diverse teams are better decision makers, and are more innovative, and have stronger governance. And now the demand from investors on disclosing diversity data is clear.”
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Nia Impact Capital is a women-led firm investing in forward-thinking companies poised to play a key role in our transition to an inclusive, just, and sustainable economy. We apply a gender equity and racial justice lens across our investment decision-making process and live our values as a women-led team of activist investors. Nia invests in companies with diverse leadership teams that provide compelling solutions to our world’s most pressing problems that are also positioned for growing profits—and solutions—at scale.
As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. See our resolutions here.
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