Below is an excerpt from ISS ESG’s thought leadership paper “The Five Tenets of Diversity: Values Create Value.“ The full paper is available for download from the Institutional Shareholder Services (ISS) online library.
Investors have never been more skeptical of “male, pale, and stale” boards, or the boards composed entirely of male, white, and long-tenured individuals. The addition of age and director skills to these three measures of gender, ethnicity, and tenure rounds out the five tenets of diversity that ISS uses to compare the diversity of board compositions. Market participants recognize that when it comes to boards, the whole is greater than the sum of its parts, and the skills and experiences new nominees bring to the board should be complementary to those of existing board members, not considered in isolation.
Sean McPhillips, ESG Content Expert, ISS ESG
Anthony Campagna, Global Director Fundamental Research, ISS EVA
Brett Miller, Head of Data Solutions, ISS ESG