Colgate-Palmolive Co. said it will resist an effort by a conservative shareholder organization to strip considerations of race, gender and sexual orientation from the process it uses to identify future board candidates. The company notified the National Legal and Policy Center (NLPC) that it will recommend investors vote against the proposal at Colgate’s next annual meeting.
In a written response sent to the NLPC this week, Colgate said the proposal "unduly interferes with the judgment" of the board’s nominating committee, which "seeks to compose a Board with members who have a broad range of experiences and skills and different perspectives." The company added that it cannot comment publicly on proxy contents until the document is released on or around March 25 because of regulatory limits.
Colgate emphasized the global scope of its business in defending its approach. The company noted that two-thirds of its sales are generated outside the US and asserted that "integrating a range of experiences, perspectives and backgrounds is crucial for designing innovative products, anticipating consumer trends, and ultimately driving business results and growth in the global marketplace."
The NLPC has filed the shareholder proposal to force a vote on whether diversity characteristics such as race, gender and sexual orientation should be used as part of the criteria for board nominations. The proposal comes amid a broader movement among certain companies to remove explicit diversity language from board selection practices.
Several large firms have recently indicated they will reduce or remove diversity, equity and inclusion language from board criteria. Among the companies mentioned in this context are Goldman Sachs Group, American Express Co., Deere & Co. and Johnson & Johnson. Conservative activists and political leaders have made the removal of DEI language from corporate decision-making a priority, arguing that such policies discriminate against White men.
Context for investors and industry observers
Colgate framed its defense around its global consumer reach and the need for a broad set of perspectives to support product development and market response. The company’s stance is a clear rebuttal to efforts by the NLPC to put selection criteria at issue in a shareholder vote.
Investors will see the company urging a vote against the proposal when the proxy is published, and the matter will be decided at the company’s next annual meeting.