In an effort to meet growing investor demand, the responsible investment arm of proxy advisory firm Institutional Shareholder Services Inc. (ISS) is adding information on race and ethnicity to its database of directors and senior executives.
ISS ESG announced that it has added data on the race and ethnic background of senior leaders at over 6,000 U.S. companies. The data is compiled from corporate filings, direct outreach to companies and other publicly available sources.
“This data is both timely and highly relevant for the many institutional investors now working to incorporate these factors into their investment processes,” said Marija Kramer, head of ISS ESG.
“The depth and breadth of this data…will also underlie new ISS ESG solutions including the launch later this year of a proprietary index covering both directors and named executive officers,” Kramer added.
According to an analysis of the data by ISS ESG, companies have made relatively modest progress at growing the proportion of minority directors across the constituents of the S&P 500.
Approximately 16.8% of the directors at large companies are racially or ethnically diverse now, up from 13.6% in 2015.
However, the research also found that large cap companies are now paying a premium for racially and ethnically diverse CEOs, unlike in previous years.
For companies in the S&P 500, median pay for diverse CEOs is roughly 10% higher on average compared with their Caucasian counterparts, ISS ESG said.