Treasurer McCord stresses importance of gender diversity to business success; says Treasury encouraging increased female, minority representation
PITTSBURGH, April 6, 2011 /PRNewswire-USNewswire/ -- At a time when female representation on corporate boards is declining nationally, State Treasurer Rob McCord today praised five companies from the Pittsburgh region that are helping to buck that trend – while making the region's economy stronger.
Treasurer McCord said HFF, Allegheny Valley Bancorp, Alcoa, First Commonwealth, and PNC Financial Services – members of Pittsburgh's "Top 50 in Business" as recognized by the Pittsburgh Post-Gazette – were singled out as a result of a partnership between the newspaper and the Women and Girls Foundation that benchmarks the representation of women on Pittsburgh's corporate boards.
"Evidence suggests businesses that have a more diverse board composition will perform better," said Treasurer McCord. "Having women and minorities in the boardroom brings fresh perspectives, new ideas, and more tough questions to the decision making process. That all helps companies govern themselves better and return more to their shareholders.
"These five businesses are leading the way – not only regionally, but nationally – by ensuring women have a voice and a seat at the table. Their commitment to diversity is a large part of why they're among the region's 'Top 50.'"
While the percentage of women members on Fortune 500 boards of directors has declined since 2006, that figure has actually increased among Pittsburgh-area firms.
Heather Arnet, CEO of the Women and Girls Foundation, and a leading voice on this issue in the Pittsburgh region since 2006, said southwestern Pennsylvania has made real progress on increasing the number of women on corporate boards:
- In 2006, there were only 44 women on the boards of Pittsburgh's "Top 50" companies, but in 2010, there were 66 women in these positions.
- The percentage of corporate board seats held by women among the region's "Top 50" companies increased to 13.4% in 2010, up from only 9% in 2006.
- Conversely, the percentage of women holding board director positions within Fortune 500 companies declined from 16.9% in 2006 to 15.7% in 2010.
The Pennsylvania Treasury has partnered with the Women and Girls Foundation since 2010 to research best practices by other state treasurers to improve the portfolio performance and the board diversity of companies in which they invest.
A report by Catalyst, a New York-based research organization, entitled "The Bottom Line: Connecting Corporate Performance to Gender Equity," measured the financial performance of 353 companies between 1996 and 2000. It found that the companies with the highest representation of women in senior management positions had a 35% higher return on equity, and a 34% higher total return to shareholders – which includes capital gains and dividends – than companies with the lowest representation of women in senior management.
Treasurer McCord said the McCord Treasury is committed to encouraging more corporate diversity in senior leadership positions, and that Treasury is using its role as an institutional investor to serve that purpose.
Under its amended proxy guidelines, the McCord Treasury will:
- Maintain an open dialogue with corporate leadership and board nominating committees to include representation of women and minorities;
- Sponsor, submit, and support shareholder resolutions that seek a greater representation of women on corporate boards;
- Encourage amending board nominating committee charters to ensure that female candidates are routinely sought in board searches; and
- Encourage other state treasurers and colleagues to join Pennsylvania in taking these actions.
"We are excited by today's announcement by Treasurer McCord," said Arnet. "Through identification of board diversity as a priority within Treasury's proxy guidelines, Treasurer McCord is having a real impact on this issue."
"You cannot underestimate the importance of a diverse board and ensuring that underrepresented segments of our population are included in senior management positions – especially at a time when so many are focused on improving corporate governance," said Treasurer McCord. "I would hope that other corporations and shareholders in the midst of filling board vacancies – or selecting slates of board nominees – will strongly consider adding women and minority candidates. These five companies are proof positive that diversity works, and it creates value for shareholders."
To learn more about the McCord Treasury, please visit www.patreasury.org.
SOURCE Pennsylvania Treasury Department