In November 2014, the Boardroom Accountability Project initiated the first phase of its campaign, in which the New York City Pension Funds petitioned for public companies to adopt proxy access. The initial campaign successfully resulted in widespread adoption of proxy access among major U.S. public companies (including more than 60% of companies in the S&P 500 index).

In launching the next phase of the campaign, Comptroller Scott Stringer sent letters to the chairs of the nominating & governance committees of the boards of 151 companies – 92% of which have proxy access and 80% of which are in the S&P 500 – calling on the companies to disclose the race and gender of directors, along with board members’ skills and to enter into a dialogue regarding their Board’s refreshment process. The Boardroom Accountability Project developed a standardized matrix format for a company to disclose the skills, experience, gender, race/ethnicity, tenure and age of individual directors (Please see attached PDF for Appendix A).

The New York City Pension Funds believes that such disclosures would increase transparency and accountability and pressure boards to be more diverse and independent. According to the Comptroller’s letter, such disclosures will enable investors to better assess whether individual director nominees are suitable for a company, identify any gaps in skills, experience or other characteristics, and more fully exercise their voting rights.

The Boardroom Accountability Project released a list of the 151 targeted companies (Please see attached PDF for Appendix B), which includes 139 companies that enacted proxy access after receiving a proposal from the New York City Pension Funds and 12 companies at which the pension funds’ proposal received majority shareholder support in 2017.

Previously, in March 2015, the Comptroller’s Office and New York City Pension Funds, along with eight other major U.S. pension systems, submitted a rulemaking petition to the SEC to make a mandatory board matrix disclosure by all U.S. public companies. However, since the SEC has yet to take action on the petition and the Trump administration is unlikely to support the reform, the Comptroller’s Office believes that company-by-company engagement is an important strategy.

In addition, Comptroller Stringer and the New York City Pension Funds asked to engage with members of the nominating/governance committee of the151 targeted companies on the board’s composition and refreshment process. In a sample letter to these companies (Please see attached PDF for Appendix C), Comptroller Stringer provided potential discussion topics for such engagements, including the following:

■ The matrix that the board currently uses to better understand the range of skills and experiences that it considers most critical and how current directors and potential board candidates best serve the company’s long-term business strategy, executive succession planning process and risk oversight responsibilities.

■ How the board evaluates individual directors on an ongoing basis, to assess whether and how directors continue to contribute to the above board responsibilities as such responsibilities and individuals continue to change.

■ How to establish a process for any director search firms that the company may retain, pursuant to which such firm(s) would reach out to the New York City Pension Funds and other significant shareholders for suggestions for the names of both potential board candidates and other organizations that specialize in sourcing potential board candidates who are women and people of color.

■ How to establish a more structured process, pursuant to which the New York City Pension Funds and other significant shareholders may provide to the Committee the names of potential board candidates, on an ongoing basis.

The Comptroller’s Office believes that such engagements will help shareholders to identify appropriate independent director candidates, including ones that bring diverse perspectives and other skills, such as climate expertise, to the boardroom.

Meridian Comment. The New York City Pension Funds campaign adds to the mounting pressure on corporate boards to increase their diversity and to enhance their disclosure on board composition and demographics. In response, some large cap public companies have started to disclose detailed information on board composition, diversity and refreshment. We expect this trend to continue, as well as ramped up efforts by public companies to increase the diversity of their boards.

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The Client Update is prepared by Meridian Compensation Partners’ Technical Team led by Donald Kalfen. Questions regarding this Client Update or executive compensation technical issues may be directed to Donald Kalfen at 847-235-3605 or

This report is a publication of Meridian Compensation Partners, LLC, provides general information for reference purposes only, and should not be construed as legal or accounting advice or a legal or accounting opinion on any specific fact or circumstances. The information provided herein should be reviewed with appropriate advisors concerning your own situation and issues.