New York City Comptroller Scott Stringer is calling on 56 companies to adopt the so-called “Rooney Rule” and establish policies to consider women and minorities when hiring CEOs and board of trustee members.
The Rooney Rule, which was adopted by the National Football League in 2003, is a policy requiring every team with a head coaching vacancy to interview at least one or more diverse candidates. The rule is named after Dan Rooney, the late former owner of the Pittsburgh Steelers, who was also chairman of the league’s diversity committee.
Stringer sent a letter to 56 companies that currently do not have something akin to a Rooney Rule policy, including Walmart, AT&T, Verizon, Ford, Boeing, and Disney. He requested they adopt a diversity search policy requiring that initial lists of CEO and director candidates include qualified female and racially diverse candidates.
Stringer also said he’ll file shareholder proposals at companies with a lack of apparent racial diversity at the highest levels.
The letter to the companies was the third stage of Stringer’s Boardroom Accountability Project, which he launched in late 2014. The first stage involved calling on 75 companies to enact a proxy access bylaw permitting share owners that have collectively held 3% of the company for at least three years to nominate up to 25% of the board. The list included companies that failed to align executive compensation with business performance, companies with little or no apparent gender or racial diversity on their board, and carbon-intensive energy companies.
And the second stage pushed for greater corporate board diversity and transparency reforms, calling on companies to adopt a form of disclosure called the “Board Matrix,” table that describes the skills, gender, and race and ethnicity of individual directors on the board.
Stringer announced the latest stage of the project at the annual Bureau of Asset Management (BAM) Emerging and MWBE Manager conference in New York.
“Increasing diversity at the biggest corporations has been our focus from day one,” said Stringer. “Through our Boardroom Accountability Project, we’ve helped increase diverse board leadership at dozens of the country’s largest companies … now it’s time for the third phase of our campaign to bring real, structural change to the boardroom table and the C-suite.”
Citing a report from Harvard Law School, Stringer said that as of 2018, 66% of board members at Fortune 500 companies were white men, 17.9% were white women, 11.5% were men of color, and 4.6% were women of color. And as for executive leadership, Stringer noted that only 6.6% of Fortune 500 CEOs are women as of May 2019, with similarly low numbers of people of color leading those companies.
Stringer also cited a 2016 study published by the Harvard Business Review that found that the odds of hiring a woman were 79 times greater when there were at least two women in the finalist pool, and the odds of hiring a minority were 193 times greater when there were at least two minority candidates in the finalist pool.
“It’s exactly the boost this industry needs if we’re going to keep growing,” said Stringer. “We want our funds to invest in companies firmly planted in the 21st century, companies that represent the future. We can’t do that if companies have leadership teams that look like they’re out of the 1950s.”