PRIM Board Approves Treasurer Goldberg’s Proposed Proxy Voting Guidelines on Board Diversity and Wage Equality
Reforms Build on Goldberg’s Commitment to Advance Shareholder Engagement and Ensure Responsible Corporate Governance Strategies for Pension Fund’s Investments
BOSTON – The Pension Reserves Investment Management (PRIM) Board, which oversees the state’s $62 billion pension fund, voted 7-0 today to approve new custom proxy voting guidelines, proposed by State Treasurer Deborah B. Goldberg, designed to strengthen corporate governance and protect the value of the fund’s investments.
The new guidelines, which impact how the fund votes as a shareholder in the roughly 9,000 companies it owns stock in, build on previous reforms introduced by Goldberg and implemented by the board during the last two years. Effective this proxy voting season, the PRIM Board will now vote against or withhold from all board nominees if less than 30 percent of the company’s board is diverse in terms of gender and race. In 2015, Goldberg proposed, and the PRIM Board approved, a similar policy setting the board diversity standard at 25 percent. Due to this diversity policy implemented in 2015, the PRIM Board has since voted against or withheld in 65 percent of director elections.
Other reforms approved today include voting for proposals requesting an internal wage audit and for proposals requiring the company to share the results of an audit with shareholders.
“The pension fund invests billions of dollars in publicly-traded companies, and we want to do all we can to protect the value of our investments – not only today, but for decades to come,” said Treasurer Goldberg. “These reforms advance effective, responsible corporate governance strategies by ensuring companies hear from a diversity of views in the boardroom and pay their employees the wages they deserve.”
Additionally, as a result of a new proxy voting policy implemented last year, effective this month, the PRIM Board now votes against or withholds from individual directors who are not CEOs of public companies and sit on more than four public company boards. For CEOs of public companies, the PRIM Board will vote against or withhold from directors who sit on the boards of more than two public companies besides their own (withholding only at their outside boards).
The proxy voting guidelines do not restrict or determine which companies the pension fund invests in. Instead, they allow the fund to use its power as a shareholder to support and advocate for policies that advance effective corporate governance strategies and foster long-term, sustained economic growth and fiscal stability.
In 2015, months after taking office, Goldberg proposed, and the PRIM Board approved, a series of other reforms, which in addition to targeting board diversity and wage equality, also focus on renewable energy, energy efficiency, human rights standards and executive pay. Click here to view a fact sheet detailing these reforms.
As she did in previous years, Treasurer Goldberg worked closely with PRIM staff and consultants before presenting the proposed reforms to the Administration and Audit Committee earlier this month, which approved them unanimously.
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