Human Capital Management Coalition
The Human Capital Management Coalition is a collaborative effort of institutional investors to engage companies and other market participants to understand and improve human capital management’s contribution to the creation of long-term shareholder value.
Investments in training and development, health and safety, employee engagement, and diversity and inclusion in the workforce are associated with increased workforce productivity, reduced turnover, and higher customer satisfaction. The coalition is led by the UAW Retiree Medical Benefits Trust (UAW Trust) and includes 25 asset owners representing over USD 2.8 trillion in assets.
Please consider joining the coalition by contacting the UAW Trust here.
Please sign a rule making petition to the SEC calling for disclosure to help investors evaluate a company’s human capital management performance. The petition and comments are here:
Investors are concerned that a history of systemic discrimination at a company increases its exposure to legal and regulatory risks, higher turnover owing to lower employee morale, and an adverse impact on its reputation, all of which can negatively affect company perception and shareholder value. Companies that hire, promote, accommodate, and protect persons regardless of race, age, gender, religion, sexual orientation, pregnancy status, and disability have a positive social impact and lay the foundation for stronger financial performance and a better public image.
Some of our recent initiatives highlighting discriminatory working conditions include Amazon, 21st Century Fox, and XPO.
- CtW Investment Group engaged with Amazon over allegations of racial discrimination and sexual harassment to seek an increase in the number of women in senior executive positions and the creation of a Stakeholder Advisory Council to address human capital management challenges at the company.
- At 21st Century Fox we urged the company to establish a Corporate Responsibility and Compliance Committee to change its corporate culture after company executives and personalities were accused of widespread sexual harassment and racial discrimination.
- CtW Investment Group is engaging with XPO Logistics, Inc. on their human capital management practices requesting that the company broadly overhaul these practices especially as it faces credible accusations of racial discrimination, sexual harassment, and pregnancy discrimination.
Company practices such as equal pay ensure diversity and inclusiveness, increase employee productivity, help a company attract and retain talent, and enable a company to remain competitive in the market. Companies could face increasing legal and regulatory risk at the state level in the United States as individual states pass legislation to reduce the gender pay gap. Since 2016, states have proposed measures to close the gender pay gap, including the introduction of at least 180 bills in state legislatures to reduce this gap, enacting legislation forbidding employers from inquiring about salary history, and strengthening laws prohibiting companies from retaliating against employees that discuss wages with co-workers.
Campaigns by investors calling for more transparency to disclose gender pay disparity in the workplace were successful at public companies including Facebook, Texas Instruments, Bank of America, American Express, and MasterCard Incorporated.
Good Jobs Institute
The Good Jobs Institute supports corporate leaders who want to set up a high-performance system to create superior value for employers, employees, customers, and investors by combining investment in employees with operational choices that increase employee productivity, contribution, and motivation. Companies can use the Good Jobs Scorecard that is developed by the institute and which uses customer experience, operational performance, and employee experience to benchmark company performance.
The #MeToo movement made it clear that sexual harassment in the workplace is an important human capital management topic. Specifically, sexual harassment in the workplace can inhibit a company’s ability to retain and attract talent and impede employee productivity. Workplace harassment can also threaten a company’s operations and present significant reputational and legal risks that can have a severe impact on shareholder value. Investors need to ensure board oversight of policies and practices. The Council of Institutional Investors provides recommendations and resources for directors and investors to help boards’ combat sexual harassment.
A group of 13 female public pension fund trustees from the state of California including California Public Employees Retirement System and California State Teachers’ Retirement System have established “Trustees United” in January 2019 to assess and mitigate the material risks of sexual harassment and misconduct on investment portfolios. The principles outlined as part of this initiative include information on sexual harassment and violation complaints and sexual harassment and misconduct settlement costs, prioritization of diversity at all levels including the board of directors and C-suite, and policies and agreements that protect workers’ rights in order to mitigate business risks. Pension fund trustees can sign on to the principles on the website.