New York Institutional Investors set new diversity rules to be used in Directors and CEO Searches

Since 2014, the Office of the New York City Comptroller has led different stages of the Boardroom Accountability Project, which gives shareholders the ability to nominate Board Members at U.S. companies using the corporate ballot, known as “proxy access” and thus, giving them a stronger voice in the long-term oversight of the companies they invest in, including on issues related to the diversity of Board Members. 

Last week, Comptroller Stringer announced a new stage of the project, which calls on companies to adopt a policy requiring the consideration of both women and people of color for every open Board Member seat and for CEO appointments, based on the NFL’s “Rooney Rule”.

For reference, the Rooney Rule is an National Football League (NFL) policy requiring every team with a vacancy for head coaching, general manager, and equivalent front office positions, to interview at least one or more diverse candidates. The Rooney Rule is named after #DanRooney, former owner of the #PittsburghSteelers and chairman of the #NFL’s diversity committee.

To launch the latest initiative and in furtherance of their goal to increase diversity at the biggest corporations, Comptroller Stringer targeted 56 S&P500 companies that have not instituted the Rooney Rule policy.

It will be interesting to monitor the targeted companies’ response to this initiative and, assuming they adopt the diversity search policy, how it may influence their corporate governance practices abroad (international operations).

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