Berkshire Hathaway is seeking the SEC’s go-ahead to exclude a diversity-related shareholder proposal from its 2025 proxy statement.
The resolution, filed by an individual investor, requests that Berkshire Hathaway ‘designate a board committee to oversee the company’s diversity and inclusion strategy across its holding companies.’
The proponent writes: ‘Each year since 2021, over one third of Berkshire’s independent shareholders supported a shareholder resolution asking that it release aggregated promotion, hiring and retention rate data by gender, race and ethnicity for its diverse employees. This data is needed to understand the effectiveness of the Berkshire companies’ efforts to ensure meritocratic workplaces.
Berkshire has not made this information public, thus investors remain without assurance that diversity, equity and inclusion [DE&I] challenges are being well managed at Berkshire companies.’
The proponent states that effective DE&I programs are linked with significant benefits in corporate financial performance, innovation, risk management and reputation.
The proponent adds: ‘Berkshire is a decentralized holding company. However, the board remains responsible for ensuring the success of its companies and their ongoing contribution to shareholder value. Human capital oversight at the board level will empower Berkshire’s companies to ensure meritocratic workplaces that allow each employee to excel on the basis of their own merits, regardless of their race, gender or other diversity characteristic.’
Company opposition
Berkshire Hathaway is seeking no-action relief from the SEC if it excludes the proposal, arguing that per Rule 14a-8(i)(10) the company has ‘substantially implemented’ it.
Berkshire Hathaway writes in its filing: ‘In 2022, the company amended its audit committee charter to clarify [its] duties and responsibilities, including its responsibility to ‘discuss guidelines and policies governing the process by which senior management of the company and the relevant departments of the company assess and manage the company’s exposure to risk, including cyber-security threats and environmental and social risks such as climate change and diversity’…
Consistent with its charter, the audit committee meets once every quarter, or more frequently if circumstances dictate, and its members discuss guidelines and policies governing the process by which senior management of the company and the relevant departments of the company assess and manage [its] exposure to risk, including diversity. Accordingly, … [Berkshire Hathaway] and the company’s board have already undertaken the essential actions and addressed the substantive concerns raised in the proposal.’
Berkshire Hathaway also argues that the proposal ‘repeat[s] the history of previous, unsuccessful, shareholder proposals filed by the proponent. That the company has not publicly disclosed diversity data… does not mean that [it] does not have a board committee to oversee the company’s diversity and inclusion strategy.’
Berkshire Hathaway published its 2024 proxy statement on March 15 and held its AGM on May 4.
A request for comment from the company was not returned immediately.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
