Ignoring or deemphasizing uncertainty in dataviz can create false impressions of group homogeneity (low outcome variance). If stereotypes stem from false impressions of group homogeneity, then the way visualizations represent uncertainty (or choose to ignore it) could exacerbate these false impressions of homogeneity and mislead viewers toward stereotyping.
If this is the case, then social-outcome-disparity visualizations that hide within-group variability (e.g. a bar chart without error bars) would elicit more harmful stereotyping than visualizations that emphasize within-group variance (e.g. a jitter plot).
In 2020, Commissioner Karima Woods, Commissioner for the District of Columbia Department of Insurance, Securities and Banking (DISB) directed the creation of the Department’s first Diversity Equity and Inclusion Committee to engage in a wide-ranging review of financial equity and inclusion and to make recommendations to remove barriers to accessing financial services. Department staff developed draft initiatives, including an initiative related to insurers’ use of factors such as credit scores, education, occupation, home ownership and marital status in underwriting and ratemaking. Stakeholder feedback on this draft initiative resulted in the Department concluding that data was necessary to properly address this initiative. Department staff conducted research and contacted subject matter experts before determining that relevant data was not generally available.
The Department is undertaking this project to collect the relevant data. We determined this initiative will be deliberative and transparent to ensure the resultant data would address the issue of unintentional bias. We also decided to initially focus on private passenger automobile insurance as that is a line of insurance that affects many District consumers and has previously had questions raised about the use of non-driving factors. The collected data will build on previous work done by the Department through the 2018 and 2019 public hearings and examinations that looked at private passenger automobile insurance ratemaking methodologies.
For this project to look at the potential for unintentional bias in auto insurance, DISB will conduct a review of auto insurers’ rating and underwriting methodologies. As a first step, DISB will hold a public hearing on Wednesday, June 29, 2022 at 3 pm to gather stakeholder input on the review plan, which is outlined below. The Department has engaged the services of O’Neil Risk Consulting and Algorithmic Auditing (ORCAA) to assist the Department and provide subject matter expertise. Additionally, the Department will hold one or more meetings to follow up on any items raised during the public hearing.
Publication Date: accessed 18 Jun 2022
Publication Site: District of Columbia Department of Insurance, Securities & Banking
The California State Teachers’ Retirement System is now planning to formally define the term “diverse manager” and adjust their definition of “emerging manager.” Though the two categories overlap, they are not identical.
The term “emerging manager” is based on the following criteria, according to CalSTRS: “the amount of assets under management; fund lifecycle of funds; firm legal structure; non-employee ownership percentage; and other various factors including track record, private placement memorandum.”
The term “diverse manager” will refer exclusively to the diversity of the firm’s ownership. The term will be defined in a tiered way such that if a firm is 25% to 49% owned by women, ethnic minorities, and/or LGBTQ individuals, it will be labeled as “substantially diverse.” A firm would be labeled as “majority diverse” if it is more than 50% owned by women, ethnic minorities, and/or LGBTQ people. Ethnic minorities include all non-white groups listed on the census.
Massachusetts’ $95.7 billion state pension fund has preliminarily approved a plan to invest up to $1 billion in emerging-diverse managers over the next two years. The move is part of the Massachusetts Pension Reserves Investment Management (PRIM)’s initiative to abide by the state’s investment equity law, which contains a target of at least 20% diversity among PRIM’s vendor base.
“The PRIM team, by investing $1 billion into its emerging-diverse managers program, is taking important steps in addressing the inequities endemic in the financial services sector,” State Treasurer Deborah Goldberg, who is also the chair of PRIM’s board, said in a statement. “This is real and tangible progress that will reduce barriers and expand opportunities for diverse investment managers.”
Given that Class A directors are explicitly bankers elected by bankers, it is perhaps unsurprising to see their predominance. But a trend since roughly 1980 includes a substantial and growing number of non-banking finance representatives as the third-most represented single group, after banking and manufacturing. The influence of finance on the Reserve Banks’ governance remains very strong, even among the classes of directors meant to represent other interests.
Change will not come naturally to corporate boards without diversity quotas, according to Ursula M. Burns, the former chairman and CEO of Xerox. She was the first Black female chief executive of a Fortune 500 company.
“I was dead set against quotas, but now I think quotas are absolutely, positively acceptable,” Burns said in a keynote panel for the California Conference for Women. “They’re the punishment that you get when you don’t do the right thing by yourself.”
She noted how a change in the Golden State’s laws spurred the naming of female directors, in a conversation with California first partner Jennifer Siebel Newsom, who helped found gender equity nonprofit California Partners Project, directed the documentary film “Miss Representation,” and moderated the panel. Burns pointed out that public companies in California were quick to find women for their directorships when it was mandated by law in 2018, despite previously insisting that there is too little female talent in the pipeline.
We have listened closely to all the feedback, and we’re making some changes to strengthen our proposal in response. For example, we heard from companies with smaller boards, as well as from several small-cap investors, that meeting the diversity objective would be more challenging for them. As a result of that feedback, we’re now proposing that companies with five or fewer directors may satisfy the recommended objective with one director from a diverse background rather than two. We’re also providing a one-year grace period in the event a vacancy on the board brings a company under the recommended diversity objective.
Overall, our proposal seeks to demonstrate that, with proper disclosure and clear objectives, companies and investors can create momentum toward an approach to capitalism that offers more opportunity to more people. We believe this can be accomplished through a market-driven solution — rather than government intervention.
Author(s): Adena T. Friedman, president and CEO of Nasdaq Inc.
Sen. Pat Toomey, R-Pa., was among a group of Republicans calling on the SEC to reject Nasdaq’s board diversity proposal.
Republican members of the Senate Banking Committee told the Securities and Exchange Commission to reject a Nasdaq proposal allowing it to require listed companies to publicly disclose the gender and racial diversity of their boards and eventually to have at least two diverse directors, citing a connection between diverse boards and corporate performance.
The board that manages the state’s $86.9 billion pension fund voted Wednesday morning to increase its standards for board diversity and equal employment opportunity at the thousands of companies it invests in, and to promote shareholder proposals related to health coverage and pandemic hazard pay.
The Pension Reserves Investment Management (PRIM) Board signed off on the policy changes developed by Treasurer Deborah Goldberg and recommended by a PRIM subcommittee that would direct PRIM to use its proxy vote as a shareholder to vote against board nominees if the gender and racial makeup of the company’s board do not meet PRIM’s standards, and to support requirements that companies be diverse in terms of race, gender, use of minority-owned businesses as contractors, and use of women-owned businesses as contractors.
The New York State Common Retirement Fund, the third-largest U.S. public plan, said it’s pressing companies to boost their ethnic and gender diversity, and will vote against directors who fail to act.
“Companies must root out racial inequality, just as they would root any other systemic problem that puts their long-term success at risk,” New York State Comptroller Thomas P. DiNapoli said in a statement Thursday. “Corporate America must join in the national reckoning over racial injustice and confront institutionalized racism.”
The New York pension, which has $248 billion of assets, plans to file shareholder proposals supporting increased diversity on corporate boards. It also will seek better disclosures about the gender and ethnic breakdown of companies’ employees. The fund said it will vote against board members who ignore these requests.
New York State Comptroller Thomas P. DiNapoli, trustee of the New York State Common Retirement Fund, released the following statement today in response to McDonald’s decision to disclose workforce diversity data and tie executive compensation to the company’s ability to foster inclusion and ensure improved human capital management. As a result of McDonald’s new policy, DiNapoli and the Fund are withdrawing their shareholder proposal that had asked the company to connect executive compensation to the company’s management of ESG and workforce issues. The Fund owned 1,674,102 shares in McDonald’s valued at $359,229,000 as of Dec. 31, 2020.
“It’s my hope that other companies follow McDonald’s example, particularly those corporations where New York state’s pension fund has filed similar shareholder proposals seeking greater attention to, and respect for, their human capital.
Author: Thomas DiNapoli
Publication Date: 18 February 2021
Publication Site: Office of the New York State Comptroller
Shannon M. O’Leary cited lack of diversity as a big part of the reason her foundation cut ties with three managers in the past year or so. Foundations argue that scrutiny of investment consultants and money managers lagging on the diversity front will only move the needle so far. For firms failing to meet diversity goals set by foundations, the best recourse is to fire them and reallocate capital elsewhere, sources say.