Pax World Urges Companies to Include Women on Boards of Directors

Withheld votes from 74 slates of board nominees due to lack of gender diversity

PORTSMOUTH, N.H.///July 20, 2010/// Pax World Management LLC, investment adviser to Pax World Funds (Pax World) and a leader in the field of Sustainable Investing, announced today that during the 2010 proxy season it withheld votes from 74 board slates because those companies did not nominate any women directors.

Pax World's proxy voting guidelines provide that it will generally withhold votes from, or where possible vote against, all board slates that do not include women. Pax World then sends a letter to the board chair and CEO of the company, letting them know the reasons why Pax did not support their board and encouraging them to embrace gender diversity. In its follow-up letter to companies, Pax World urges them to address gender diversity on their board by adopting nominating committee charter language specifically establishing that gender diversity is part of every director search.

"We believe gender diversity on boards is vitally important," said Pax World President and CEO Joe Keefe. "When women are at the table, the discussion is richer, the decision-making process is better and the organization is stronger. Companies that embrace gender diversity and women's empowerment are, in our view, simply better long-term investments."

There is a significant body of research supporting the belief that companies that are successful in promoting women to the most senior levels of business tend to outperform their peers that do not. A 2007 Catalyst study on board diversity and financial performance, for example, found that those companies with the highest proportion of women on their boards of directors outperformed those with the lowest percentage of women by 66 percent on the basis of return on invested capital.1

The value of board diversity has long been promoted by many prominent institutional investors and is increasingly being recognized by regulatory bodies worldwide. Most recently, the U.S. Securities and Exchange Commission adopted a new rule on proxy disclosure that included, among other changes, a requirement that companies disclose whether and how their nominating committees consider diversity in identifying board nominees.2

Pax World's commitment to gender equality is exemplified through the Pax World Global Women's Equality Fund – the only mutual fund in America that focuses on investing in companies that are global leaders in promoting gender equality and women's empowerment. Pax World has also established the Pax World Women's Advisory Council, which is comprised of nationally-known leaders and experts on women's issues. The Council assists Pax World in its efforts to advance women and gender equality through the Pax World Global Women's Equality Fund.

To further encourage gender diversity and women's empowerment, Pax World is currently co-leading an investor initiative, in collaboration with the United Nations Principles for Responsible Investment (UNPRI), Calvert Asset Management Company and other institutional investors, focusing on gender equality in corporate leadership and related corporate best practices. The goal of the engagement, which targets companies in 10 countries in North and South America and Europe, is to encourage the representation of women on boards of directors and in senior management and to promote greater disclosure by companies on the topic of gender equality.

Pax World is also encouraging companies worldwide to endorse and take steps to implement the Women's Empowerment Principles, a joint initiative of the United Nations Development Fund for Women (UNIFEM) and the United Nations Global Compact (UNGC). Pax World recently sent letters to the chief executive officers of 82 companies held in its Global Women's Equality Fund, urging them to embrace these principles, which guide the private sector in promoting gender equality in the workplace.

1Catalyst, "The Bottom Line: Corporate Performance and Women's Representation on Boards," 2007.

2Securities and Exchange Commission, "Proxy Disclosure Enhancements," Federal Register 17 CRF Parts 229, 239, 240, 249 and 274¸ December 23, 2009.