Building the diversity pipeline – two new US initiatives

Calpers and Calstrs, two US pension funds, are to launch a database of independent directors that will help improve corporate governance in companies held in their portfolios. The two funds, with combined assets of about $320bn, have been leading the charge in the US for shareholders to play a positive role in board selection and performance.

Looking back at the financial crisis, Anne Simpson, director of corporate governance for Calpers, told the FT on April 5:

“All of these banks, almost to a fault, ticked the boxes on the corporate governance agenda. But it was a fig leaf to hide that the boards in no way had a grip on what the new business was they were getting into.”

The database, called the “Diverse Director DataSource”, is designed to provide companies with a rich source of independent directors from different backgrounds.

On April 6, the US-based Robert Toigo Foundation launched All a Board, a diverse “clearing house” of directors, aiming to connect women and minority board candidates with public companies and not-for-profit organisations. The foundation was launched in 1989 to increase diversity in the finance industry.

Nancy Sims, president and chief executive of the Robert Toigo Foundation, said in a statement:

“The return on investment of diverse boards is well documented. With the launch of All a Board, we’re focused on eliminating shortage of talent as the rationale for why boards lack diversity. Candidates with diversity of thought, gender, ethnicity and multicultural perspectives exist—and with All a Board [they] will be easier to identify and reach.”

Those of us in the UK with long memories will remember ProNed, a 1970s initiative sponsored by the Bank of England to improve corporate governance in banking. It is now part of Egon Zehnder International, the executive search company.

The question is whether these two initiatives, and others that may follow their lead, will encourage board chairmen to open the door to independent directors who are not in the inner circle instead of finding ways to keep the boardroom a closed club.

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Liz Bolshaw

Liz Bolshaw is a business journalist and editor. She has been a successful book publisher, online editor, magazine editor and publisher.

She was launch editor of the Europe-wide online community Entrepreneur Country, has published magazines for PwC, 3i, dunhill and Bafta, and launched The Sharp Edge, a magazine for and about entrepreneurs, with Duncan Bannatyne. She is a regular contributor to Thomson Reuters’ Venture Capital Journal.

Her last project for the Financial Times was as editor of the paper’s Business Education magazine.

Rebecca Knight

Rebecca Knight is a freelance journalist based in Boston. She writes regularly for the FT on business education, entrepreneurship, and management.

Andrew Hill

Andrew Hill is an associate editor and the management editor of the FT. He was City editor of the FT and editor of the daily Lombard column on British business and finance from September 2006 to December 2010.

He was the FT’s financial editor from June 2005 to September 2006, with overall responsibility for coverage of companies and markets. Before becoming financial editor, he was the FT’s comment & analysis editor, in charge of the paper’s opinion and features pages.

From 1999 to 2003, he was the FT’s New York bureau chief. He joined the FT in 1988 and has also worked as foreign news editor, UK companies reporter and correspondent in Brussels and Milan.

Pino Bethencourt

Pino Bethencourt is a professor and leadership expert at IE Business School in Madrid. She is also an author and executive coach.

Lynda Gratton

Lynda Gratton is professor of management practice at London Business School.

Linda Tarr-Whelan

Linda Tarr-Whelan, former ambassador to the UN commission on the status of women, is a Demos distinguished senior fellow.