BlackRock Asks Companies to Explain Dearth of Women on Boards

(Bloomberg) -- BlackRock Inc., the world’s biggest asset manager, is asking companies with few or no women on their boards to explain themselves, saying that diverse groups make better decisions.

The firm’s investment stewardship group sent letters this week to all Russell 1000 companies with fewer than two female directors, asking that they justify how that aligns with their long-term strategies and to report on efforts to increase diversity on their boards. There are 367 Russell 1000 companies with fewer than 2 women on their boards, according to data compiled by Bloomberg.

"Irrespective of a company’s industry, location or size, we believe that a lack of diversity on the board undermines its ability to make effective strategic decisions," BlackRock said in the letter signed by Michelle Edkins, global head of investment stewardship at the New York-based asset manager. The firm said a diverse board helps companies attract and retain employees.

Read more: BlackRock puts its votes behind proposals to get women on boards

BlackRock also updated its proxy voting guidelines, adding a stipulation that it expects companies to have at least two women directors on their boards.

See also: U.K. boards try to make diversity target everyone’s business

©2018 Bloomberg L.P.