Impact Blog
Boosting gender equality with structured engagement

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Calvert disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Calvert are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. References to individual companies for Engagement or Research purposes are provided for illustrative purposes only and may not be representative of the results of all of Calvert’s engagement efforts. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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      By Reed MontagueESG Research Analyst, Calvert Research and Management and Monique PattilloCorporate Engagement Analyst & Proxy Specialist, Calvert Research and Management

      Washington - As International Women's Day approaches on March 8, it's an opportune time to examine how engagement efforts can help companies improve their efforts at securing gender equity.

      Calvert's shareholder advocacy efforts focus on improving corporate behavior on a range of gender issues. These efforts take the form of direct dialogue with companies, letter-writing campaigns and lending our support to many public-private initiatives focused on gender equality.

      Calvert has been particularly active in encouraging the companies we hold in our portfolios to institutionalize a commitment to diversity, inclusive of gender, race and ethnicity, in the selection of board of director candidates. All too often, qualified women are overlooked for these influential positions, while companies continue to search for candidates from their limited networks. That is why our engagement process focuses on diversifying the director selection process.

      Each year, Calvert uses the tools we have as investors - outreach, shareholder proposals and proxy votes, to advocate for change within companies we believe lack sufficient diversity. Our proposals ask companies to expand their director selection process and include women and minorities in the pool from which director candidates are selected. Our proxy voting policy is to vote against members of the Nominating and Governance Committee when there is less than 30% diversity among all directors, and when there is not at least one woman and at least one minority on the board.

      The engagement effect

      Because women and minorities are still significantly underrepresented in the ranks of senior corporate management and other high-income positions, and overrepresented in the more poorly compensated categories, it is critical to measure company progress and encourage laggards to push forward.

      During the 2018-19 proxy season, Calvert voted:

      • In favor of all 14 shareholder proposals relating to the gender pay gap (100% of votes against management)
      • In favor of all four shareholder resolutions to report on pay disparity (100% of votes against management)

      In addition, Calvert began a diversity engagement effort last year focusing on companies with less than 20% women on the board and no women among the top five executive officers. We contacted 37 companies, and received responses from over 40%. We held dialogue with seven companies, and are pursuing further engagement with another six companies through filed shareholder proposals seeking to increase representation of women and people of color on boards and in senior management.

      As part of that effort, Calvert continued its engagement on diversity from prior years with small regional banks. Several companies are in the process of expanding their engagement strategies, and have created leadership initiatives, strengthened diversity policies and formalized diversity programs, which address hiring, training and promotional opportunities. Ultimately, success will be measured by positive change in the numbers of women and people of color in senior roles and at the board level.

      Bottom line: Structured engagement efforts, such as those that Calvert employs, can help companies make meaningful progress on the path to gender equity.