Dialed-in: SSGA Letter Calls for Racial Diversity Disclosures
Earlier this summer, I wrote about how Calvert called on companies and investors to take more tangible steps in addressing racial inequities. SSGA is also pushing for more change and yesterday, the asset manager posted a letter from its Global Chief Investment Officer specifying SSGA’s expectations for public companies relating to diversity, strategy, goals & disclosure. Many companies disclose some of this information and if companies haven’t started thinking about disclosure on these issues, this call from SSGA, one of the largest asset managers, might be the nudge that starts the ball rolling.
Addressed to board chairs, the letter says ongoing issues of racial equity have led SSGA to focus on ways racial and ethnic diversity impacts the asset manager as an investor. The letter says that starting in 2021, SSGA is asking companies to disclose more information relating to diversity and it breaks this information into five key areas. SSGA plans to cover these topics in engagement conversations and the letter says engagement is SSGA’s primary tool to understand a company’s plan and how the board carries out its oversight role – but for companies that don’t meet the asset manager’s expectations, it says SSGA is prepared to use its proxy voting authority to hold companies accountable. Here are SSGA’s five key areas for which it’s asking for more diversity disclosure:
Strategy: Articulate what role diversity plays in the firm’s broader human capital management practices and long-term strategy
Goals: Describe what diversity goals exist, how these goals contribute to the firm’s overall strategy, and how these goals are managed and progressing
Metrics: Provide measures of the diversity of the firm’s global employee base and board, such as by disclosing EEO-1 data (or data based on that framework) and at the board level, by disclosing diversity characteristics, including the racial and ethnic make-up of the board
Board: Articulate goals and strategy related to racial and ethnic representation at the board level, including how the board reflects the diversity of the company’s workforce, community, customers and other key stakeholders
Board Oversight: Describe how the board executes its oversight role in diversity and inclusion
-Lynn Jokela, TheCorporateCounsel.net August 28, 2020
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