New Media Investments Group, Inc.: Reporting on Board Diversity
WHEREAS: New Media Investment Group has no women on its Board of Directors.
Diversity, inclusive of gender and race, is a critical attribute of a well-functioning board and a measure of sound corporate governance.
Corporate leaders recognize the strong business case for board diversity. The Guiding Principles of Corporate Governance of the Business Roundtable state:
Diverse backgrounds and experiences on corporate boards, including those of directors who represent the broad range of society, strengthen board performance and promote the creation of long-term shareholder value. Boards should develop a framework for identifying appropriately diverse candidates that allows the nominating/corporate governance committee to consider women, minorities and others with diverse backgrounds as candidates for each open board seat.
Benefits associated with board and management diversity include a larger candidate pool from which to pick top talent, better understanding of consumer preferences, a stronger mix of leadership skills, and improved risk management.
Prominent institutional investors support diversity on boards as an indicator of good corporate governance. BlackRock, the world's largest asset manager, published updated proxy voting guidelines in 2018 stating: "we would normally expect to see at least two women directors on every board.” State Street Global Advisors reported in March 2018 that it voted against director nominees of more than 500 companies over the previous year due to inadequate board diversity.
State pension plans from Massachusetts, New York, and Rhode Island have proxy voting policies with minimum board diversity thresholds, resulting in votes against directors at more than one thousand companies. Proxy Insight, a leading information source on global voting practices, reported that 60 percent of U.S. proxy policy changes in 2018 related to board diversity.
Women and people of color remain significantly underrepresented on U.S. corporate boards. We are encouraged by signs of progress, particularly for women, who filled nearly one-third of new director openings in 2017. Yet, overall, women and people of color account for only 20 percent and 10.6 percent of S&P 1500 directorships, respectively (ISS U.S. Board Study, Board Diversity Review, April 11, 2018).
BE IT RESOLVED: Shareholders request the Board of Directors provide an annual report, at reasonable expense and omitting proprietary information, on steps New Media Investment Group is taking to enhance board diversity beyond current levels, such as:
Adopt a formal commitment to diversify the Board with respect to such characteristics as gender, race, ethnicity and sexual orientation;
Commit publicly to include candidates who are diverse with respect to these characteristics in the pool from which director nominees are chosen;
Report on its process for identifying candidates for the board who are diverse with respect to these characteristics.
We believe this request for a status report will help build Board accountability on this issue.
Company: New Media Investments Group, Inc.
As You Sow
Initiative(s): Gender Diversity
Status: Agreement Reached; Resolution Withdrawn