Institutional investors want to see companies start disclosing the racial composition of their boards, according to the results of Institutional Shareholder Services Inc.’s (ISS) latest annual global benchmark policy survey.
The proxy advisory firm reported that 73% of investors who responded to its survey said that corporate boards should disclose the demographics of their board members, including their self-identified ethnicity.
Support was more muted from other respondents to the survey (including directors, consultants, academics and trade groups), with 36% supporting the idea.
The survey also found that 85% of investors support engaging with boards and management to encourage diversity, 78% favour shareholder proposals encouraging transparency on diversity and 58% endorse the idea of shareholder proposals calling for boards to consider at least one minority in the slate of candidates for every open senior position.
Additionally, 56% of investors said they would consider voting against nominating committee members on boards with insufficient ethnic diversity.
On the issue of climate change, 87% of investors said they’d consider supporting shareholder proposals seeking increased climate risk disclosure, 84% would consider shareholder proposals seeking specific emission reduction targets and 75% said they’d consider voting against directors who’ve done a poor job managing climate change risk.
Next month, ISS will release draft voting policy updates for a public comment period before they are finalized ahead of the 2021 proxy season. Final policies will be released in mid-November.