Score one for corporate diversity.
EBay recently came under fire for having just one woman on its board of 17 directors.
Some investors demanded change. New York State Comptroller Thomas DiNapoli and Trillium Asset Management filed a shareholder proposal in November calling for eBay to boost board diversity.
Just four months later, the group is withdrawing its proposal because eBay responded by adding two women to its board and committing to actively seek out highly-qualified women and minorities for its board.
“EBay put action behind its words and rapidly brought in new board members. The company deserves to be commended,” DiNapoli said in a statement.
He said he hopes and expects eBay to continue its commitment to diversity as it spins off its PayPal payments business into a separate public comppany.
DiNapoli and Trillium were joined in the proposal by Pax World Mutual Fund, The United Methodist Church Foundation and the Benedictine Sisters of Mount St. Scholastica.
Activism pays off: The news highlights how shareholder activism can bring about corporate change.
After the proposal was filed, eBay announced the appointment of Bonnie Hammer, chair of NBC Universal Cable Entertainment, to its board in early January. Earlier this week, the tech company said it would appoint American Red Cross CEO Gail McGovern to its board.
That gives eBay three female directors, including Kathleen Mitic, a startup veteran who has been on the board since 2011.
While female representation on boards in the tech industry has increased, it’s not even close to the 50/50 breakdown of the workforce. Apple, for example, has two females on a board of seven. Google has three women on its board of 11 directors.
“Trillium applauds the company for increasing board diversity as it looks to the future,” said Susan Baker, vice president of Trillium Asset Management. “Yet, many companies in Silicon Valley and around the country remain laggards on board diversity.”
By the numbers: All of this is important because corporate boards are in charge of hiring and firing CEOs. Only 14.2% of the top five leadership positions at the companies in the S&P 500 are held by women, according to a CNNMoney analysis. That’s a low figure given how much attention this issue has received in recent years, especially with Sheryl Sandberg’s Lean In campaign.
Moreover, research shows companies with more diverse backgrounds bring fresh perspectives to decision making and can even boost financial performance.