Investors say board gender diversity is essential: report

Climate risk disclosure and gender diversity on corporate boards are key issues attracting majority support from investors in the annual governance policy survey from proxy advisory firm Institutional Shareholder Services Inc. (ISS).

The firm reported that its latest global benchmark policy survey found that 61% of investors said that board gender diversity is “essential” to effective corporate governance, and a similar proportion (60%) of investors said that companies should be evaluating and disclosing their climate-related risks.

Only 5% of investors said that climate risks are too uncertain for companies to assess, the ISS noted.

On the issue of directors sitting on too many boards (overboarding), the ISS reported that 42% of respondents said that four boards should be the limit for non-executive directors, and 45% said that two board seats is the appropriate maximum for CEOs.

The survey generated almost 400 responses from a combination of institutional investors, corporate executives and others from around the world (Canada, the U.S., Europe and Asia), the ISS said.

In late October, the ISS will release draft voting policies for the upcoming proxy season for comment. Its policies will be finalized in November for shareholder meetings starting Feb. 1, 2020.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.