DIRECTORS TO WATCH: Gender Diversity in the Boardroom

Law firms, investors and watchdogs keep the heat on. “Board diversity and expanding the pool” are among the top issues that companies are being called upon to prioritize, according to a recent memo from the law firm Wachtell, Lipton, Rosen & Katz titled “Board Development and Director Succession Planning in the Age of Shareholder Activism, Engagement and Stewardship.” Sabastian V. Niles, the memo’s author and a partner with the firm, advises boards to “advance board diversity in the self-assessment, recruitment, and nomination process, including, but not limited to, diversity in gender, ethnicity, race, age, experience, geographic location, skills and perspectives.” Where applicable, he recommends, “increasing the size of the board to accommodate new talent in advance of an incumbent director’s departure, including in the case of highly qualified diverse candidates.” The mantle of diversity is taken up as well by investment companies and corporate governance watchdogs as a key marker of best practices. Vanguard Research, in a recent commentary, cites four principles of good governance, leading with board composition, and including oversight of strategy and risk, executive compensation, and governance structures: “We believe good governance begins with a great board of directors. Our primary interest is to ensure that the individuals who represent the interests of all shareholders are independent, committed, capable, and appropriately experienced. “We also bel...

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