Low-ranked Berkshire adds to its diversity

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Posted: Friday, March 8, 2013 12:00 am

Another woman has been nominated to Berkshire Hathaway's board, the company led by Warren Buffett said Thursday, the same day it was ranked as the worst publicly traded company for director and executive diversity.

Chosen for the newly created board position is Meryl Witmer, a principal at New York-based investment partnership Eagle Capital Partners, Omaha-based Berkshire said in an email.

The appointment makes Witmer the third woman on Berkshire's 13-director board, and the third woman to be appointed out of the last six.

Meryl Witmer

Also Thursday, activist investor Calvert Investments released a diversity survey of large U.S. publicly traded companies. Berkshire, a holding company for dozens of firms selling everything from construction bricks to fine diamond jewelry, ranked last among companies from the Standard & Poor's 100.

Berkshire's holdings include GEICO auto insurance, BNSF Railway, Nebraska Furniture Mart and a newspaper group that includes The World-Herald.

Berkshire ranked so low because it has no commitment to diversity, said Christine De Groot, an analyst at Maryland-based Calvert Investment Management who wrote the report.

“It is the only company in the survey that says it does not consider diversity to be valuable in the boardroom,” De Groot said on a conference call Thursday, citing a paragraph in Berkshire's filings with the Securities and Exchange Commission that states the firm “does not have a policy” on the matter.

Calvert said it last performed such a survey in 2010. The company offers mutual fund investments it describes as emphasizing “sustainable and responsible” holdings. A recent position, for example, is pressing for legislation requiring companies to disclose their efforts to identify and eliminate the use of certain minerals that have raised money for the armed conflict in the Democratic Republic of the Congo.

De Groot said the survey took into account Calvert's diversity standards only at the Berkshire Hathaway holding company, not any of its operating units.

Some of those units include high-ranking women, including Denver-based building materials maker Johns Manville, headed by Chief Executive Mary Rhinehart. Berkshire executive Tracy Britt serves as chairman of four company operating divisions. They are Johns Manville; paint maker and retailer Benjamin Moore; frame producer Larson-Juhl; and Oriental Trading, a mail-order toy and novelty retailer.

Berkshire, which had a 2012 profit of $14.8 billion on revenue of $162 billion, was joined at the bottom of the Calvert diversity survey by Simon Property Group, National Oilwell Varco Inc., Ebay and Apache Corp.

The top companies for diversity in the executive suite and boardroom, Calvert said, are Citigroup Inc., Merck & Co., the Coca–Cola Co. and JPMorgan Chase & Co, with 11 companies tied for fifth place.

Witmer joins Susan Decker and Charlotte Guyman as the three women on the board of Berkshire, which employs about 20 people at the holding company headquarters in Omaha. An additional 288,500 people work at operating subsidiaries nationwide in apparel, home furnishings, insurance and myriad other industries.

Karen Linder, who wrote a book about women executives and diversity at Berkshire Hathaway, said ignoring operations at subsidiary companies probably led Calvert to rank Berkshire too low.

“I have them at about the middle of the pack, which is low, but not that low,” said Omaha resident Linder, author of “The Women of Berkshire Hathaway,” published last year with Buffett's nod of approval.

“Warren Buffett himself has a good record of supporting women, and I found no overt or covert forms of prejudice against women or minorities at Berkshire,” Linder said Thursday.

Witmer's Eagle Capital follows investment philosophies in common with Buffett and Berkshire, according to a statement from the company. They include “investing in strong businesses with great free cash-flow characteristics, at a significant discount to their intrinsic value, with great management teams who intelligently allocate capital.”

Witmer graduated from the University of Virginia's McIntire School of Commerce, with a concentration in finance, in 1983, Eagle Capital said. The partnership said its top holdings are apparel maker Gildan Activewear, titanium ore producer Tronox and Spectrum Brands, maker of Rayovac batteries and Kwikset locks.

In the past year, shares of Montreal-based Gildan have risen by almost half. Spectrum Brands stock has almost doubled. Shares of Tronox have fallen about 85 percent since June 2012.

Other findings in the Calvert report include:

» Even though women are often now hired as frequently as men at S&P 100 companies, their representation in management roles decreases with each step up the corporate ladder, with 56 percent of S&P 100 companies having no women or minorities in their highest-paid senior executive positions.

» While women make up 19 percent of S&P 100 director positions, they represent only 8 percent of the highest-paid executives.

» While 98 companies have women directors, and 86 companies have minority directors, only 37 companies in the S&P 100 have minority women on their boards.

» Since 2010, the percentage of women serving on S&P 100 boards has risen 1 percentage point to 19 percent.

The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.

Contact the writer: Russell.Hubbard@owh.com or 402-444-3133

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