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Pension fund pushes for NHC board diversity


New York’s comptroller is, as the representative of the state’s retirement funds, calling on the directors of National HealthCare Corp. to add diversity to their seven-member, all-male body.

Representing the New York State Common Retirement Fund and the New York State and Local Retirement System, Thomas DiNapoli is also requesting that Murfreesboro-based NHC produce a report by September saying “if and how the company is taking steps to enhance broader diversity” when it comes to women and people of color.

He points to numerous investors and jurisdictions adopting diversity-focused practices and requirements in recent years and says research has shown that more diverse boards lead to better long-term value creation.

“Benefits associated with board diversity include a larger candidate pool from which to pick top talent, better understanding of consumer preferences, a stronger mix of leadership skills, and improved risk management,” DiNapoli wrote in NHC’s recently filed proxy statement.

In their response unanimously calling on shareholders to vote against DiNapoli’s call, NHC directors say their nominating/governance committee considers diversity in evaluating director candidates but add that “an examination of broader diversity is imperative to ensuring that the board reflects a diversity of personal and professional experiences, opinion, perspectives and backgrounds.”

They add that applying the New York investors’ framework “could inadvertently limit the [committee’s] ability to select the most suitable and qualified candidates for membership” and say the report request would bring with it unnecessary burdens and costs.

The NHC annual shareholders’ meeting is scheduled for May 7. The DiNapolli proposal needs affirmative votes of a majority of the shares cast.

This post originally appeared in our sister publication, the Nashville Post

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