New York City Comptroller Scott Stringer and California State Controller Betty Yee are urging 19 fiduciaries of public pension funds to embrace policies and practices that promote board diversity inclusive of lesbian, gay, bisexual and transgender people.
The California Public Employees' Retirement System, California State Teachers' Retirement System and the New York City Pension Funds have corporate governance policies and proxy voting guidelines that encourage companies to recruit diverse boards and explicitly include LGBT interests in their definition of diversity, Stringer and Yee said in a joint statement.
"Diversity is not just a social value, it is a bottom-line consideration that affects our entire investment portfolio," Stringer said.
Social activism on pension boards has drawn widespread attention in recent years.
Stringer and Yee referenced a Credit Suisse study in April that said LGBT-embracing companies deliver 10% higher return on equity. "The growing wealth of research—including our own research on gender and sexual diversity—points to diversity being a positive contribution to corporate performance," said Credit Suisse.
In a countering view, Manhattan Institute for Policy Research senior fellows James Copland and Steven Malanga said social activism harms share value. They cited research by University of Tennessee finance professor Tracie Woidtke.
Stringer is investment advisor, custodian and a trustee to the $163 billion New York City Pension Funds.
Yee, as California's chief fiscal officer, belongs to numerous financing authorities and financial oversight entities including the Franchise Tax Board. She also serves on the boards for the nation's two largest public pension funds.