KKR Expands Board Diversity at Its U.S.-Based Businesses
KKR Expands Board Diversity at Its U.S.-Based Businesses
(Bloomberg) -- KKR & Co. added at least two diverse directors to the board of every company it controls in the U.S., part of a bigger push to expand its focus on underrepresented groups.
About 30% of directors on the boards of KKR-owned American companies are now women or ethnic minorities, according to an investor letter obtained by Bloomberg. That comes to about 70 people, and the figure rises to more than 100 when factoring in directors at companies where the firm doesn’t have a controlling stake but has pushed for more diversity.
Beyond the U.S., KKR aims to push each company it backs -- whether or not it has a controlling stake -- to include diverse directors based on race and gender, it said in the letter.
“Portfolio company diversity starts at the top,” Pete Stavros, co-head of KKR’s Americas private equity portfolio, said by phone. “Diverse boards make better decisions and it’s also going to set the right tone and drive diversity into the organizations.”
Companies across the U.S. are focusing on diversity as they come under scrutiny for a lack of women and people of color in top roles. The recent reckoning around the death of George Floyd, and the protests that followed, have added urgency to the issue.
Private equity firms appear to lack diversity in their top ranks. Last year, Bloomberg found that women fill only 8% of senior investment roles globally at the 10 largest firms that use debt to buy companies.
But firms are taking some steps. Carlyle Group Inc. set a goal of achieving 30% diversity of all directors on the boards of companies it backs by 2023, and is focused on how it uses investments to drive change, said a spokeswoman.
KKR started its diversity push in 2014 with the formation of its inclusion and diversity council, which Stavros co-heads. It has since hired a chief diversity officer, instituted more training and changed its recruiting efforts.
The firm has also invited minority-owned brokerages to join as co-managers in several deals, including a $1 billion KKR equity raise and Fiserv Inc.’s pricing of a secondary offering.
“Diversity and inclusion is a key business imperative for us at KKR and at our companies,” Stavros said. “But we still have much more to do on this front.”
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