Vanguard calls for more diverse corporate boards, better climate-change disclosures

September 2017.  MarketWatch.

“In an open letter addressed to the directors of all public companies, most of which it is a sizable investor in, Vanguard, a gigantic passive asset management institution,  called on U.S. companies to improve their governance.  It outlined new factors—including ones related to diversity and climate issues—that it said were increasingly important in its evaluation of such practices. If Vanguard follows through and votes its shares consistent with this directive, it could significantly impact how corporate boards select their members.  Morgan Stanley, similarly raised the issue of board diversity in evaluating investments.  The Vanguard letter stated, ‘There is compelling evidence that boards with a critical mass of women have outperformed those that are less diverse,’ Vanguard’s letter read. ‘Diverse boards also more effectively demonstrate governance best practices that we believe lead to long-term shareholder value. Our stance on this issue is therefore an economic imperative, not an ideological choice.'”

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