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Removes some guidance related to women and minority

directors

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Vanguard says the change aims to account for regional

standards

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Change comes ahead of annual shareholder meeting season

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BlackRock ( BLK ) has eliminated a 30% diversity target for boards

By Ross Kerber

Jan 31 (Reuters) - Top mutual fund manager Vanguard

removed some of its guidance for U.S. companies to include women

and minority directors, a sign of the shifting dynamics of

corporate diversity efforts that have come under attack from the

new Trump administration.

With $10.1 trillion in assets under management, any change

in Vanguard's guidance will be closely followed as the 2025

annual shareholder meeting season gets going in March.

Vanguard's proxy voting policy for U.S. companies, seen by

Reuters ahead of a Friday release, has removed a statement from

its 2024 policy that in addition to having a diversity of tenure

and skills, a board should also, "at a minimum, represent

diversity of personal characteristics, inclusive of at least

diversity in gender, race, and ethnicity."

Vanguard said the change aims to account for regional standards,

such as a UK expectation that 40% of directors be women. There

is no equivalent U.S. requirement and Nasdaq has ended an effort

to require corporate diversity disclosures.

Vanguard does not have hard targets for who should serve as

directors and is only trying to provide clarity, said John

Galloway, Vanguard's global head of investment stewardship.

"We have never had quotas, and in the first instance look

for boards to follow the listing standard and market

expectations of the markets they are in," he said.

Vanguard's guidance for U.S. companies continues to include

other language supportive of boardroom diversity, such as that

boards should reflect a range of "personal characteristics (such

as age, gender, and/or race/ethnicity)" to enable better

oversight for shareholders.

Executives across all industries are facing pressure to drop

diversity, equity and inclusion policies, with President Donald

Trump issuing a series of executive orders aimed at dismantling

DEI programs since taking office on Jan. 20.

Meanwhile, investors so far have stood by the policies such as

those at Costco where 98% of votes cast rejected an

anti-DEI resolution on Jan. 23.

Boardrooms have slowly grown more representative since the Black

Lives Matter movement of 2020, but gains for women and

minorities are slowing as companies reach goals and look at

other recruiting priorities.

Vanguard rival BlackRock ( BLK ), in its 2025 guidance,

eliminated a 30% diversity target for boards from late 2021,

noting that 98% of S&P 500 boardrooms already meet that goal.

Various Republican officials have accused both Vanguard and

BlackRock ( BLK ) of putting too much emphasis on environmental, social

and governance (ESG) concerns, while the companies say they

prioritize returns.

Vanguard for instance did not back any of 400 environmental

or social shareholder resolutions last year in the U.S., and the

new domestic guidance also removes examples of such resolutions

it might support, a move Galloway said was meant to avoid

confusion.

"We're trying to provide clarity to people who have

concerns, whether they are pro-ESG or anti-ESG," Galloway said.