Prudential: Diverse Experiences Help Prudential's Board Shape the Present and Future

By John Chartier

Growing up in the segregated South, Gilbert Casellas learned early what it means to feel excluded. He attended a segregated school in the mostly Latino community of Ybor City in Tampa, Florida, and couldn’t use water fountains or go to movie theaters designated whites-only.

One of his most vivid memories was being told he could no longer attend a local Boys Club after the organization discovered he was a student at a segregated school.

“The thought of a parent saying to their child, ‘you can’t go there’ for no reason other than who you are and what you look like was one of the most in-your-face experiences I had of growing up in the segregated South,” said Casellas, an independent director on Prudential Financial’s board and chair of its Corporate Governance and Business Ethics Committee.

Influenced by those experiences, he became a lawyer, spending most of his career championing diversity and fighting discrimination. As head of the U.S. Equal Employment Opportunity Commission (1994-1998), he fought innumerable discrimination cases. He later sought to join a corporate board where he could continue to champion diversity and inclusion.

He chose Prudential.

“I was attracted by the quality of the management, the quality of the board and the company’s history,” Casellas said. “Think about a company that started 140-plus years ago as an inclusive company that sought to serve working-class families. That was pretty new and different at the time.”

Today, two-thirds of the company’s board is diverse, as are 80 percent of the company’s non-employee directors.

Prudential’s board recently received the Executive Women of New Jersey’s Board Gender Diversity Award and was honored by the Women’s Forum of New York for having at least 25 percent of its board seats held by women. More recently, it has been nominated for the 2018 National Association of Corporate Directors NXT Recognition Award and received the Governing Board Diversity Champion Award from the California Department of Insurance in 2017.

And Casellas himself was tapped for inclusion in the 2019 National Association of Corporate Directors’ Directorship 100, an annual list of the most influential leaders in boardrooms and corporate governance. Casellas and his fellow honorees will be recognized at a ceremony this week.

Casellas and Peggy Foran, who joined Prudential in 2009 as chief governance officer and corporate secretary, were also leading voices in the company’s decision to expand its reporting on board diversity beginning with Prudential’s 2010 proxy.

Both Casellas and Foran, a senior vice president, believe board diversity enables companies to best represent the interests of all its stakeholders and leads to better decision-making and long-term value creation.

“The more diverse board you have the better outcomes you achieve—for all of your constituencies,” Foran said. “It may take longer to make decisions, but that’s because you’re going to have more collaboration, more discussion and more points of view. Ultimately, you’re going to get a much better decision.”

Added Casellas, “Having people in the room who have a variety of experiences and backgrounds has made a positive difference in every one of Prudential’s major strategic decisions over the last 20 years.”

So how do you achieve such a strong, collaborative and well-rounded board There are numerous ways, but Foran says clear communication and what she calls a skills and experience matrix are arguably the most critical.

Foran and Casellas worked with the board to create a clear set of specific skills the company looks for in choosing a diverse candidate. These skills include a mix of professional and personal experiences and skills. And that experience matrix is printed in the company’s proxy for all shareholders to see.

Casellas and other board members also make it a point to personally attend meetings with institutional shareholders—to do a listening tour of sorts. Investors often share their views on board diversity and other issues, which board members can then discuss and determine how to fine-tune their strategy.

“First and foremost, you want to be the best. And to be the best, you must have the best thinking,” Casellas said. “You need to have as many perspectives around the table as possible. I don’t think you can be successful and compete without that.”

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