A New York City official is urging companies to adopt a policy similar to the one embraced by the National Football League, as a way to boost diversity among the ranks of board directors and CEOs.
Recently, NYC Comptroller Scott Stringer sent a letter to over 50 S&P 500 companies, including Walmart (WMT), Boeing (BA), Disney (DIS), and Verizon (VZ) to implement a version of the so-called “Rooney Rule” when searching for new C-suite candidates.
Verizon is the parent company of Yahoo Finance.
In an interview with Yahoo Finance, Stringer blasted “a 1950s [hiring] model that doesn’t bode well for the 21st century. So what we want to do is say to firms -- interview someone of color, interview a woman. When you do that, the floodgate opens.”
Stringer’s influence stems from his role as the custodian of New York City’s public pension funds, which amounts to the fourth largest public pension plan in the U.S. with over $200 billion in assets.
“I have a right to protect the pension fund and the way to do that is to look at companies and say how can I make them better? And studies have shown time and time again when you have more diverse boards, you actually have stronger companies,” Stringer told Yahoo Finance’s YFi PM.
While some companies are embracing diversity in the boardroom, the progress overall is still slow. Over 80% of new Fortune 500 board seats last year were filled by caucasian or white directors, according to a 2018 board diversity census published by the Alliance for Board Diversity and Deloitte.
Citing major corporate scandals of the past, Stringer suggested those companies may have fared better with more diverse boards.
“I would argue if there was less group-think at Enron and WorldCom, and more women and people of color on those boards, perhaps the scandals of the financial collapse would not have happened,” Stringer said.
McKenzie Stratigopoulos is a producer at Yahoo Finance. Follow her on Twitter: @mckenziestrat