2019 saw investors raise the bar for US and Canadian company directors, particularly on diversity, with female board appointees reaching a record high of 45% in the US. In July, we saw the last remaining all-male board in the S&P 500 at Copart Inc. announce the appointment of a female executive to the board. However, hundreds of smaller Russell 3000 companies continue to lack diversity. In the TSX Composite, the proportion of companies that had all-male boards declined slightly to 2%, although almost half of all Canadian companies outside of this core index lack female board representation.
Many investors also ramped up pressure on laggards by targeting the election of individual directors who had responsibility for board policies, most commonly the Chair of the Nomination Committee. In some instances, votes against reached over 25% of total votes cast on those in this role at companies with all-male boards.
We continue to engage and encourage companies to meet the 30% Club’s target. We will use our voting power to drive change at board level where we consider not enough has yet been achieved. We will not support the election of Nomination Committee chairs or other relevant directors onto the board without requisite female representation and where there is unwillingness to fully address the issue.
For 2020, we have expanded the coverage of our voting policy on diversity from the S&P 500 to the entire US market. In Canada, we now expect all TSX Composite companies to put in place a policy that aims to increase gender diversity on the board. Our expectation is that there be at least two female directors on the board for a company within this index.
For a second year running, we have written to US and Canadian investee companies to highlight our expectations for improved board diversity across these markets.