Outcome: Successfully withdrawn. The Company will amend its Corporate Governance Guidelines and Nominating, Governance and Public Policy Committee Charter in order to seek increased diversity among Board members.
WHEREAS: Cerner Corporation has one woman on its board of directors.
Athenacare, a healthcare sector peer, has two women on its board.
Baxter and Becton Dickinson, healthcare companies similar in size to our company have two women and three women on their boards, respectively.
A 2012 report by the business-led Committee for Economic Development entitled Fulfilling the Promise: How More Women on Corporate Boards Would Make America and American Companies More Competitive notes that the percentage of women on all U.S. corporate boards has been below 13% for a decade;
The National Association of Corporate Directors released a report in September 2012 warning that progress toward board diversity is stalling;
We believe that diversity, inclusive of gender and race, is an essential measure of sound governance and a critical attribute to a well-functioning board;
A growing body of academic research shows that there is a positive relationship between firm value and the percentage of women and minorities on boards.
RESOLVED: Shareholders request that the Board of Directors, consistent with its fiduciary duties:
- Take every reasonable step to ensure that women and minority candidates are in the pool from which Board nominees are chosen;
- Publicly commit itself to a policy of Board inclusiveness to ensure that women and minority candidates are routinely sought as part of every Board search the company undertakes;
- Publish a report by October 2014, at reasonable expense and omitting proprietary information, on its efforts to encourage diversified representation, inclusive of gender and race on the Board, and the manner in which the nominating committee or Board of Directors will assess the effectiveness of its efforts and policy.
Director and nominee diversity helps to ensure that different perspectives are brought to bear on issues, while enhancing the likelihood that proposed solutions will be nuanced and comprehensive.
According to recent studies from researchers at Hebrew University, Wellesley Centers for Women, University of Western Ontario and V. Kramer Associates, having a critical mass of at least three women directors is good for corporate governance.
Cerner states in its Corporate Governance Guidelines that its Nominating, Governance & Public Policy Committee endeavors to have a board representing diverse and in depth experience in business, health care, information technology, government and in areas that are relevant to the Company’s global activities. Neither diversity inclusive of gender nor ethnicity is mentioned as factors in board nominee searches.
With women representing 73% of medical and health service managers, according to the Bureau of Labor Statistics, board diversity assumes critical importance in the healthcare sector.
In our view, companies combining competitive financial performance with high standards of corporate governance, including a gender balanced board, are better positioned to generate long-term value for their shareholders.
For all the reasons above, we urge our fellow shareholders to vote in favor of this proposal.