Analysis: Elliott, Ancora lead hedge funds in pushing for more women on boards
12/01/2022 11:00
By Jessica DiNapoli and Svea Herbst-Bayliss
Jan 12 (Reuters) - Elliott Management Corp and Ancora
Advisors LLC led activist hedge funds in pushing for women to
join corporate boards last year, as a Wall Street old boys'
network makes strides toward diversity.
Activist investors who push for changes at companies shake
up boards by putting slates of nominees to a shareholder vote or
negotiating directly to add or remove directors.
While hedge funds still lag corporate America in diversity
on corporate boards, some are significantly outpacing their
peers in adding and nominating women directors, an analysis by
data provider Insightia for Reuters shows.
Elliott, founded by billionaire Paul Singer, publicly
nominated eight women to boards last year, all of whom were
appointed, according to data from Insightia. The hedge fund was
the only one last year to have more women than men added to
boards.
In 2019, Elliott had installed eight men on boards and no
women, though it nominated a woman that year at Hyundai Motor Co
005380.KS and had helped women get appointed in the previous
years.
Ancora, run by Fred DiSanto, nominated nine women to boards
last year, within close distance of the 13 men it put forward.
Out of the eight directors it managed to install on boards,
three were women, according to Insightia.
This is ahead of the industry average. Insightia examined
the track record of 12 activist hedge funds with publicly
disclosed assets of more than $500 million that pressured at
least two companies in 2021. On average only about 20% of the
directors installed on boards last year were women, compared to
30% female representation on boards in S&P 500 component
companies, according to Insightia and a Reuters analysis.
urn:newsml:reuters.com:*:nL1N2RE1SR
Elliott, which oversees $48 billion, and Ancora, which
oversees $9.4 billion, said they had made identifying women
directors a priority, as environmental, social and corporate
governance (ESG) issues gain prominence among investors whose
support the hedge funds need to pressure companies. urn:newsml:reuters.com:*:nL1N2SZ1K1
"I have over 100 calls per year with directors. About 80% of
the directors I speak with are women," said Christine O'Brien,
head of investment stewardship at Elliott.
Ancora's co-president Jim Chadwick said that, as his firm
was seeking to refresh stale boards, it found too many were
"instinctively insular because they have a collection of
like-minded directors, who are often mostly men."
Board appointments by activist hedge funds Starboard Value
LP, Land & Buildings Investment Management LLC and Inclusive
Capital Partners LP also beat the S&P 500's 30% level last year.
Starboard, run by Jeffrey Smith, went from four women and 14
men appointed to a board in 2019 to a 50-50 split last year of
three men and three women, according to Insightia. Out of three
directors Land & Buildings installed last year, one was a woman.
Inclusive, founded by former ValueAct CEO Jeff Ubben, had two
women appointed to boards, and three men.
A Land & Buildings spokesperson said that nearly 60% of the
individuals the fund had "directly or indirectly" added to
boards in the last five years were women.
Anne Sullivan, Inclusive's chief operating officer, said
"board representation is an active part of our investment
strategy."
Starboard did not respond to requests for comment.
Jana Partners LLC, the hedge fund run by billionaire Barry
Rosenstein, disclosed last year it intended to nominate three
women out of eight people it put forward to serve as directors.
"Jana is committed to adding diversity on boards as
demonstrated by our three 13-D filings with nominee agreements
in 2021, all of which included a female nominee," said chief
legal officer and partner Jennifer Fanjiang.
ICAHN'S MALE-DOMINATED SLATES
Other major activist hedge funds and investors, including
Icahn Enterprises LP, did not appoint any women to boards in
2021 despite being active.
Icahn Enterprises, run by the billionaire investor Carl
Icahn who has agitated for changes at companies for more than
four decades, has installed only one woman on a board in the
last three years, out of 19 directors he placed in total,
according to Insightia.
At Southwest Gas Holdings Inc SWX.N , however, Icahn put
forward a 10-person slate with four women in
November. urn:newsml:reuters.com:*:nL4N2RA42I
Icahn declined to comment.
Beth Stewart, chief executive of Trewstar Corporate Board
Services, which helps place directors at companies and slates,
said more activist hedge funds sought women as they appealed to
top ESG-minded money managers, such as BlackRock Inc BLK.N and
State Street Global Advisors, for their support in high-stakes
shareholder votes.
"I think the word has gotten out, there are a whole lot of
talented women out there, so why not?" Stewart said.
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Activist nominees by gender in 2021 https://tmsnrt.rs/3HS8umf
Activist appointees by gender in 2021 https://tmsnrt.rs/3qgc83n
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(Reporting by Jessica DiNapoli in New York and Svea
Herbst-Bayliss in Boston; Editing by Greg Roumeliotis and
Richard Chang)
((Jessica.DiNapoli@thomsonreuters.com; 646-223-4678;))