Steven Greenhut’s recent comments on CalWatchdog.com about the Diverse Director DataSource – “3D” – are incorrect.
Greenhut writes that 3D, which CalPERS and CalSTRS worked together to develop, is “mostly about affirmative action” and calls it a “standard-issue diversity approach that focuses on skin color, gender and ethnic background.”
Let’s set the record straight.
What is 3D?
The Diverse Director DataSource is a new resource for those seeking candidates for corporate board seats whose knowledge, skills and experience can bring fresh perspective to a boardroom. Corporate boards need directors with diverse skill sets and backgrounds who can advance a company’s business strategy and help create sustainable value.
What does “diversity” mean?
We mean diversity of thought, experience, expertise, backgrounds, and skill sets. This includes gender and ethnic diversity. Boards need individuals with skills in a wide range of areas, including accounting or finance, international markets, business or management experience, industry knowledge, customer-based experience or perspective, crisis response, leadership and strategic planning.
Are quotas involved?
No. 3D doesn’t create any preference based on race, sex, color, ethnicity or national origin. Any potential candidate may submit his or her details to 3D, and it’s the subscribers to 3D who determine the criteria for selecting candidates. In addition, the actual selection of board candidates will be determined by the companies themselves. 3D cannot dictate quotas.
Why is 3D needed?
CalPERS is a global investor with ownership in more than 9,000 public companies. Because we retain ownership for years and decades, we seek long-term, sustainable growth. Repeated studies have shown that a diverse group of people is less likely to fall victim to corrosive “group think” and more likely to engage in higher-quality analysis. As public pension fund fiduciaries charged with maximizing investment returns and minimizing risk, we need companies acting on robust evaluation and careful thought. The Diverse Director DataSource can help us realize that goal.
For more information on 3D, visit the CalPERS Corporate Governance website.
Read “Ethically Challenged Funds Push Diversity!” at CalWatchdog.com.
CalPERS is working hard to ensure the retirement and health security of our members, provide help to our employers, and manage our investments to meet our long-term liabilities. We hope this information provides education, insight, and clarity.
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