New York City Comptroller and Pension Funds Ask Companies to Disclose Board Demographics and Experience

New York, NY — Investors will vote on a series of shareholder proposals filed by the New York City Comptroller’s Office and three of the New York City Retirement Systems (“NYCRS”)  at four major companies requesting board members disclose their self-identified race, gender, and relevant skills and attributes in a matrix format, beginning today at Capital One. The Comptroller’s Office reached agreements to disclose this information with nine companies this proxy season and will bring proposals to a vote over the next few weeks at Capital One, Caesars Entertainment, Las Vegas Sands, and NextEra Energy. 

The proposals emphasize that a diverse board can bring different perspectives and insights to discussions and decision-making processes and promote transparency, accountability, and diversity in the company. A diverse board has the potential to improve corporate performance and preserve long-term shareholder value. More accurate and transparent disclosure of director diversity information in a decision-useful Board Matrix enhances corporate governance practices and promotes diversity and inclusion in corporate boardrooms. As a holistic human capital management strategy, it also sets the tone at the top for the employees of these companies. NYCRS filed the majority of new proposals this year in sectors (such as airline and hospitality/hotels) where frontline workers are particularly diverse.   

According to DiversIQ, almost half (44.7%) of all S&P 500 companies disclose gender and race/ethnicity for each individual director – an increase from only 3.7% in 2019.  As part of a push by the NYC pension funds, 14 portfolio companies have agreed to release board diversity metrics in the past two years. 

“Understanding who makes up the board of a company is an important factor for investors to assess the board’s ability to provide oversight and effectively manage risks. The release of a board matrix will provide consistent, comparable data that enables shareholders to make informed decisions about the governance of the companies they invest in. Companies that prioritize diversity, equity, and inclusion in their boardrooms signal to their employees, customers, suppliers, and investors that they value different perspectives that will nurture long-term success,” said Comptroller Brad Lander. 

Shareholders do not vote on a slate of directors – but on individual nominees. Shareholders need information on the skills, experience, and diversity of individual directors to assess each nominee and make informed voting decisions. This is particularly important in the era of Universal Proxy Cards, in which investors have the opportunity to vote for individual directors from competing slates in a proxy contest. 

In addition, a board that is diverse and has relevant experience is better prepared to manage any risks the company may face. For example, the proposal at NextEra has been refiled by the pension systems in part because of concern over the lack of disclosure of director experience in overseeing the long-term risks the company faces related to climate change. 

In their first recommendations on the proposal this season, independent proxy advisors Glass Lewis and Institutional Shareholder Services (ISS), have recommended shareholders vote in favor of the proposals at Capital One, whose shareholder meeting is on Wednesday, May 4th and Las Vegas Sands Corp., whose meeting is on May 11th. 

These proposals are part of the Comptroller’s Office’s Boardroom Accountability Project 2.0—an initiative that began in September 2017 with the aim of setting a new standard for transparency, diversity, and inclusion in corporate governance practices. The project involves filing board diversity proposals at companies, engaging with our portfolio companies, and advocating for best practices in corporate governance. Through this initiative, the Comptroller’s Office has secured agreements with leading companies to publicly disclose a Board Matrix. This season agreements were reached at Alaska Air Group, Hilton Worldwide Holdings, JetBlue Airways Corporation, Marriott International, MGM Resorts International, Moody’s Corporation, Park Hotels & Resorts, Wyndham Hotels & Resorts, and Wynn Resorts.   

“Company Boards hold substantial power and responsibility over their employees – from workplace conditions to diversity and inclusion. This alone makes the NYC Comptroller and Pension Funds’ call for increased disclosure of Board diversity at major companies a necessity,” said Brooklyn Borough President and NYCERS Trustee Antonio Reynoso. “Through releasing their board member racial and gender composition to investors, companies are incentivized to create boards that reflect our communities and encourage more equitable workplaces.”

As of February 28, 2023, the three Systems have holdings valued at $189.33 million at NextEra Energy, $65 million at Capital One, $23.67 million at Las Vegas Sands Corp., and $21.49 million at Caesars Entertainment. 

In addition to Comptroller Lander, the trustees of the five New York City pension funds are as follows:  

New York City Employees’ Retirement System (NYCERS): Mayor Eric Adams’ Appointee Bryan Berge, Director, Mayor’s Office of Pension and Investments; New York City Public Advocate Jumaane Williams; Borough Presidents: Mark Levine (Manhattan), Donovan Richards Jr. (Queens), Vito Fossella (Staten Island), and Vanessa L. Gibson (Bronx); Henry Garrido, Executive Director, District Council 37, AFSCME; Richard Davis, President Transport Workers Union Local 100; and Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.  

Teachers’ Retirement System (TRS): Mayor Eric Adams’ Appointee Bryan Berge, Director, Mayor’s Office of Pension and Investments; Chancellor’s Representative, Dr. Angela Green, New York City Department of Education Panel for Educational Policy; and Thomas Brown (Chair), Victoria Lee, and David Kazansky, all of the United Federation of Teachers. 

Board of Education Retirement System (BERS): Schools Chancellor David C. Banks, Represented by Karine Apollon; New York City Comptroller Brad Lander’s Representative Alison Hirsh; Mayoral appointees Chantel Cabrera, Lilly Chan, Marjorie Dienstag, Khari Edwards. Gregory Faulkner, Anita Garcia, Anthony Giordano, Dr. Angela Green, Ruth Maria Kenley, Michelle Joseph, Alan Ong, Phoebe Sade-Arnold, Maisha Sapp, Gladys Ward; CEC appointees Naveed Hasan, Jessamyn Lee, Thomas Sheppard, and Ephraim Zakry; Borough President Appointees Geneal Chacon (Bronx); Tazin Azad (Brooklyn); Kaliris Salas-Ramirez (Manhattan); Sheree Gibson (Queens); Aaron Bogad (Staten Island); and employee members John Maderich of the IUOE Local 891 and Donald Nesbit of District Council 37, Local 372. 

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