Two shareholders of SunTrust Banks Inc. have drafted a proposal seeking more minority representation on the $95.4 billion-asset company's board of directors.
Charles and Lois B. Edwards of Longboat Key, Fla., submitted a plan to be considered at the April 18 annual meeting. They say that to remain competitive the company must adopt a policy of seeking out women and minorities as directors.
"We believe that the judgement and perspectives of a diverse board will improve the quality of corporate decision making," Mr. and Ms. Edwards wrote in their proposal, which was filed with the Securities and Exchange Commission this month as part of the company's proxy statement. "If we are to be prepared for the 21st century, we must learn how to compete in an increasingly diverse marketplace, and this will be facilitated by promoting the best qualified people, regardless of race, gender, or physical challenge."
Specifically, the two shareholders -- who own a combined 23,470 shares of SunTrust stock -- are asking the board to issue a statement committing the company to "a policy of board inclusiveness," and for the company to provide shareholders with a report next year describing the criteria for board qualification, the process of selecting members, and what progress has been made in finding minority directors.
Currently, SunTrust has one minority person on its 16-person board, an African-American man.
SunTrust is asking that shareholders vote against the proposal. In a statement contained in the proxy, the company said that though it "agrees with the merits of achieving diversity," the Edwardses' plan is in its best interests.
In the filing, SunTrust says that it believes selection of directors should be based on "the individual's qualifications, experience, and ability to contribute to the enhancement of shareholder value," and not on a person's gender or ethnic background.
SunTrust said it is hesitant to issue statements detailing discussions concerning board member selection, as the Edwards' proposal would require.
"It is important that these discussions remain informal and confidential," the bank said. "Management of the company believes that these proposals would unduly limit the company in its selection of directors, involve substantial cost, time, and effort, and thus would not be the best issue of the company."
A spokesman for SunTrust declined to comment beyond what is said in the proxy. The Edwards have an unlisted phone number and could not be reached for comment.
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