BlackRock Sends Letter to 300 Companies Inquiring About Board Gender Diversity
February 3, 2018
This week BlackRock sent letters to 300 companies in the Russell 1000 that do not have at least two female directors on their boards, asking them to disclose their approach to boardroom diversity and asking them to specify a timeframe for improving board diversity. The letter, from BlackRock Global Head of Investment Stewardship, states "we believe that a lack of diversity on the board undermines its ability to make effective strategic decisions. That, in turn, inhibits the company’s capacity for long-term growth." She also states that "we would normally expect to see at least two women directors on every board." BlackRock has incorporated this standard into their proxy voting guidelines as well. The letter follows the recent letter from BlackRock CEO Larry Fink asking companies to explain how they expect to deliver financial performance and make a positive contribution to society. The new letters come as large index funds are taking a more active role in governance issues.