Inclusiveness of Board of Directors

2010 – Expeditors International

 

 

BE IT RESOLVED: That the Board of Directors consistent with their fiduciary duties:

 

- Take every reasonable step to ensure that women and minority candidates are in the pool from which Board nominees are chosen;

-  Report to shareholders, at reasonable expense and omitting proprietary information, its efforts on the implementation of the policy of “Board Membership Criteria, Section C: Diversity” for the Nominating Committee’s Charter to ensure that:

 

* Women and minority candidates are routinely sought as part of every Board search the company undertakes;

* The Board strives to obtain diverse candidates by expanding director searches to include nominees from both corporate positions beyond the executive suite and non-traditional environments such government, academia, and non-profit organizations;

* Board composition is reviewed periodically to ensure that the Board reflects the knowledge, experience, skills, expertise, and diversity required for the Board to fulfill its duties.

 

Supporting Statement: We believe that diversity is an essential measure of sound governance and a critical attribute to a well-functioning board. We believe that in an increasingly complex global marketplace, the ability to draw on a wide range of viewpoints, backgrounds, skills, and experience is critical to a company’s success, as it increases the likelihood of making the right strategic and operational decisions and catalyzes efforts to recruit, retain, and promote the best people, including women and minorities. We believe director and nominee diversity helps to ensure that different perspectives are brought to bear on issues, while enhancing the likelihood that proposed solutions will be nuanced and comprehensive.

 

A growing body of academic research shows a significant positive relationship between firm value and the percentage of women/minorities on boards.  This view is strongly supported by many large institutional fund managers, who consider the diversity of a firm’s board before investing.  Earlier this year, the Council of Institutional Investors amended its Corporate Governance Policies to explicitly support a diverse board in background, experience, age, race, gender, ethnicity, and culture. Connecticut State Treasurer Denise L. Nappier, principal fiduciary of the Connecticut Retirement Plans and Trust Fund, has affirmed that “shareholder value and corporate bottom lines are enhanced by an independent and diverse board.”

 

In April 2009, SEC Commissioner Luis Aguilar stated “It is imperative to have processes in place to be able to identify diverse candidates. The nominating committee should follow policies and procedures which require that, in all future assessments of board needs, to include the development of a diverse slate of candidates in advance of a board opening becoming available. In today's environment, diversity in the boardroom is a business necessity...”

 

In our view, companies combining competitive financial performance with high standards of corporate governance, including board diversity, are better positioned to generate long-term value for their shareholders.  We urge the Board to broaden its pool of candidates and  implement the statement “Directors should be capable of representing the multi-cultural nature of our global corporation with consideration being given to a diverse board in terms of gender and ethnic membership” in the Director Nominating Policy.