September 11, 2009
U.S. Securities and Exchange Commission
100 F Street, NE Washington, DC 20549-1090
As a participant in and employee of the American economy, financial services professional for the last 20 years, and board member of several not-for-profit institutions, I am presenting the reasons I think diversity disclosure of nominees as well as the diverse make-up of directors in corporate boardroom needs to be added to the existing list of elements required by the SEC in the filings of publicly traded companies.
I recognize that enhancing director and nominee disclosure with diversity reporting adds an extra ingredient to the qualification mix that must be considered by nominating committees. However, the time spent seeking and reporting greater diversity in the boardroom ultimately is the corporate community's responsibility. This is because NOT doing so will decrease investor return; failure to advance Diversity Best Practices in the corporate boardroom is one of the reasons American companies have brought the global economy to the brink of collapse in the last two years.
The value proposition inherent in having diverse perspectives engaged in board governance is too great to ignore since it directly reduces group-think tendencies. In recent years, we have watched corporate boards rubber-stamp, to America’s detriment, poor decisions such as unchallenged financial risk positions and outlandish compensation packages for “top-talent” C-level executives. Not only did “top talent” executives fail to demonstrate their talent, but, in an incestuous twist, they frequently sat on other boards and applied the same erroneous assumptions to decisions at other publicly-held companies. This represents classic “Group Think.”
In a career spanning three decades, I have seen dozens of mid-level executives prove their talent with phenomenal concrete results. There is no dearth of talent, and it is absurd to assert that only a few hundred Americans have the skills to manage our companies at the board level. Opening the board room door to the tens of thousands of talented senior-level managers will enable our corporate boards to view issues more critically, ask more questions under less peer pressure, and ultimately assess emerging risks more effectively.
America's future market share in the global economy depends on how well we govern its companies. It is important that American companies utilize the talent available within the diversity pool — the candidates best suited for corporate governance and the boardroom.
Robert O.L. Lynn, III