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We believe effective management of human capital is a matter of good governance and a critical component of long-term business success.

Good human capital management can facilitate economic mobility, close the opportunity gap within the workplace, and level the playing field across an organization. Employers that foster a culture of diversity, equity, and inclusion (DEI), including robust equal employment opportunity (EEO) policies and programs, benefit from increased worker satisfaction and productivity, an enhanced ability to attract and retain top talent, and reduced employee turnover and associated training costs. Moreover, diverse leadership improves decision-making processes and better reflects demographic trends within customer markets. In contrast, poor management of human resources exposes companies to reputational and litigation risk.

Our targeted company engagement on workforce composition disclosure began in 1991 and continues today. While progress has been made, those that self-identify as female and as members of underrepresented groups remain absent from many board rooms and executive suites, affirming the importance of this work.

Our Strategy (2024)

We encourage companies to:

Increase representation of directors who self-identify as female or members of underrepresented group(s) on boards of directors or in senior leadership positions.

Board diversity is a critical attribute of a well-functioning board and a measure of sound governance. Because director appointments are relatively infrequent occurrences, we advocate for companies to take meaningful actions toward leading corporate governance policies and practices to facilitate progress. These include:

Embedding in governance documents a commitment to diversity inclusive of gender, race, and ethnicity;

Committing publicly to consider gender, race, and ethnicity in each candidate pool for board and senior leadership positions;

Disclosing in annual proxy statements the self-identified gender, racial, and ethnic composition of the board;

Evaluating board refreshment and review processes; and

Providing periodic assessments of challenges experienced and progress achieved.

Disclose comprehensive and decision-useful human capital management data, including workforce composition statistics.

Diverse, equitable, and inclusive workplaces are essential to addressing economic inequality, strengthening management and innovation, and building long-term shareholder value. To promote accountability for hiring, retaining, and advancing underrepresented groups, we ask companies to publicly disclose data already collected and reported annually to the Equal Employment Opportunity Commission (EEOC) detailing employee composition by gender, race, and ethnicity across job categories. We also ask companies to disclose recruitment, promotion, and retention rates across gender, race, and ethnicity.

Consistent, comparable, and comprehensive workforce composition data enables investors to more accurately assess and value company actions to ensure equitable representation at all levels. Additional details and context regarding DEI policies, practices, and performance over time helps determine the effectiveness of companies’ human capital management programs. For example, pay equity reviews help companies identify and address pay gaps across employee groups; programs to develop and retain underrepresented talent can lead to improved diversity at all levels, including senior leadership, which over time translates into more diverse board candidate pools; and measurable goals and performance disclosure support public accountability.

Adopt, and make public, inclusive EEO policies and practices that explicitly protect all LGBTQ+ employees from discrimination.

We ask companies to adopt and disclose EEO policies and practices inclusive of sexual orientation and gender identity and expression as public testimony to their commitment to current and prospective lesbian, gay, bisexual, transgender, and queer (LGBTQ+) employees. The 2020 U.S. Supreme Court decision affirming that Title VII prohibits discrimination based on sexual orientation and gender identity represented an important step in providing basic workplace protections for LGBTQ+ Americans. However, it does not extend protections to employees outside the US, nor does it automatically ensure inclusive environments where LGBTQ employees can thrive. Inclusive policies — and practices that translate policies into actions — remain essential for companies to attract and retain employees and customers.