Resolved clauseRESOLVED: Shareholders request the Medpace Holdings, Inc. (“Medpace”) Board of Directors report annually, at reasonable expense and omitting proprietary information, on steps it is taking to enhance board diversity, such as:
Committing publicly to include qualified women and racially and ethnically diverse individuals in each candidate pool for board seats;Detailing board strategies to reflect the diversity of the company’s workforce, community, and customers; andReporting progress/challenges towards increasing the gender, racial, and ethnic diversity of the board.
Whereas clauseWHEREAS: Medpace Holdings, Inc. has just one woman and no racial and ethnic diversity on its Board of Directors. We believe diversity among directors, inclusive of gender, race, and ethnicity, is a critical attribute of a well-functioning board and a measure of sound corporate governance.
Supporting statementSUPPORTING STATEMENT
Corporate leaders recognize the strong business case for board diversity. The Guiding Principles of Corporate Governance of the Business Roundtable, an influential association of chief executives, affirms diversity enhances long-term shareholder value and states: “Boards should develop a framework for identifying appropriately diverse candidates, which asks the nominating/corporate governance committee to consider women and/or minority candidates for each open board seat.”[1] Board and management diversity benefits include larger candidate pools from which to pick top talent, better understanding of consumer preferences, a stronger mix of leadership skills, and improved risk management.
Numerous institutional investors have adopted proxy voting guidelines reflecting their belief that board and management diversity are indicators of good corporate governance. Asset managers, including the world’s largest — BlackRock, State Street Global Advisors, and Vanguard — increasingly vote against directors and support shareholder proposals on board diversity at companies deemed to be making insufficient progress. State and city pension plans nationwide have adopted proxy voting policies with minimum thresholds for board diversity. Proxy advisor Institutional Shareholder Services (ISS) enhanced its proxy voting guidelines related to board diversity for both its Benchmark and Socially Responsible Investment (SRI) policies[2].
U.S. regulation and legislation to accelerate progress on board diversity is on the rise. In August 2021, the Securities and Exchange Commission approved Nasdaq’s proposed board diversity rule requiring listed companies to publicly disclose on an annual basis board-level diversity statistics and have, or explain their failure to do so, a minimum of two diverse board members. Numerous states, including Illinois, Maryland, and New York, have passed legislation mandating board diversity disclosure reporting, and others may follow suit.
Despite recent progress, gender, racial, and ethnically diverse directors remain significantly underrepresented on U.S. corporate boards. Female directors account for 32% of the directorships in the S&P 500 and 24.1% of the Russell 3000, with racially or ethnically diverse directors accounting for only 21 and 22% respectively%.[3][4]
We urge Medpace to expand its disclosure regarding concrete, actionable steps it is taking to further diversify its board of directors, which we believe serves the long-term interests of the company and its shareholders.
[1] https://www.businessroundtable.org/policy-perspectives/corporate-governance/principles-of-corporate-governance
[2] https://www.issgovernance.com/policy-gateway/voting-policies/
[3]https://www.conference-board.org/pdfdownload.cfm?masterProductID=
[4] https://www.spencerstuart.com/research-and-insight/2022-sp-500-new-director-snapshot