Institutional Shareholder Services and Glass Lewis have taken opposite stances on the “Rooney Rule” resolution.
The two top advisory firms to public company stockholders are split on a hotly debated Amazon shareholder proposal designed to push the company to consider more women and minorities for board seats.
This week, Institutional Shareholder Services came out in favor of the proposal, which would require Amazon to include women and people of color among candidates each time a new board director role comes open — much like the NFL’s “Rooney Rule.” Today, all 10 Amazon board members are white; seven are men and three are women.
“Given that the board’s current composition makes it an outlier among its industry peers,” ISS said, “shareholders would benefit from having the board adopt a policy to ensure diverse candidates.”
At the same time, the other top shareholder advisory firm, Glass Lewis, has recommended that shareholders vote against the proposal — a stance that Amazon’s board has also taken, leading to outrage among some employees inside the giant online retailer. Glass Lewis noted that Amazon’s board already has three female directors, and that the company has said it already considers race and gender in the selection process.
“We believe that race and gender are but two aspects of diversity,” the firm added in its Amazon report, “and that boards should be cognizant of ensuring that all directors, regardless of race or gender, possess the necessary skills, knowledge, and experience that will ultimately drive corporate performance and enhance and create shareholder value.”
Amazon shareholders have until May 25 to vote on the proposal in advance of the company’s annual shareholder meeting to be held on May 30 in Seattle. Big institutional public market shareholders in North America often look to ISS and Glass Lewis for advice on how to vote.
Recode reported earlier this week that a group of Amazon employees have expressed anger over the company’s stance in internal emails where they also challenged the company to better explain the decision.
“What exactly is the complex process that we currently use to find and vet talent that we are so proud of?” one question read.
“Why is complex ok?” the employee followed up, pointing out the seeming contradiction between the “complex considerations” referenced by Amazon and the company’s leadership principle of “invent and simplify.”
“[H]ow is it successful, if we aren’t diverse at all, and notably last amongst top tech companies?” the employee continued. “Please provide your measures for success.”
Separate from its board, Amazon only has one woman among its 18 highest-ranking executives. None are people of color.
Amazon’s opposition to the resolution — which was proposed jointly by the Master Trust of the Service Employees International Union and CtW Investment Group — has caught the attention of a range of elected officials, including Congressman Emanuel Cleaver of Missouri and New York City Comptroller Scott Stringer, who was previously the borough president of Manhattan.
.@amazon is ahead of the curve in so many ways, but their resistance to senior level #diversity is something that needs to be addressed ASAP. I urge them to seriously reconsider the proposal to implement a Rooney Rule. #CBCTECH2020
— Rep. Emanuel Cleaver (@repcleaver) May 9, 2018
.@Amazon’s board of directors is 100% White & 70% Male.
The company’s employees are frustrated & so are we.
We’re fighting for board diversity.
Since September, focus companies nominated 45 new directors who are women and/or persons of color.https://t.co/0I5OpSExXq
— Scott M. Stringer (@NYCComptroller) May 8, 2018
Clarification: The story was updated to include more context on Glass Lewis’ position.
Recode – All Go to Source
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