NEW YORK: Top mutual fund manager Vanguard has removed some of its guidance for US companies to include women and minority directors, a sign of the shifting dynamics of corporate diversity efforts that have come under attack from the new Trump administration.
With US$10.1 trillion in assets under management, any change in Vanguard’s guidance will be closely followed as the 2025 annual shareholder meeting season gets going in March.
Vanguard’s proxy voting policy for US companies, seen by Reuters ahead of release today, has removed a statement from its 2024 policy that in addition to having a diversity of tenure and skills, a board should also, “at a minimum, represent diversity of personal characteristics, inclusive of at least diversity in gender, race, and ethnicity.”
Vanguard said the change aims to account for regional standards, such as a UK expectation that 40% of directors be women. There is no equivalent US requirement and Nasdaq has ended an effort to require corporate diversity disclosures.
Vanguard does not have hard targets for who should serve as directors and is only trying to provide clarity, said John Galloway, Vanguard’s global head of investment stewardship.
“We have never had quotas, and in the first instance look for boards to follow the listing standard and market expectations of the markets they are in,” he said.
Vanguard’s guidance for US companies continues to include other language supportive of boardroom diversity, such as that boards should reflect a range of “personal characteristics (such as age, gender, and/or race/ethnicity)” to enable better oversight for shareholders.
Executives across all industries are facing pressure to drop diversity, equity and inclusion (DEI) policies, with President Donald Trump issuing a series of executive orders aimed at dismantling DEI programmes since taking office on Jan. 20. — Reuters
