SSGA Challenges Gender Disparity on Corporate Boards

If a company fails to take action to increase the number of women on its board, SSGA will use proxy voting power

The “SHE” statue placed near the Charging Bull statue in the Financial District on Broadway. (Photo: Federica Valabrega) The “SHE” statue placed near the Charging Bull statue in the Financial District on Broadway. (Photo: Federica Valabrega)

Before sunrise on Tuesday, State Street Global Advisors installed a statue of a little girl challenging the Charging Bull statue that stands in the Financial District in New York City.

SSGA is calling the statue “SHE” to symbolize the growing number of women in leadership positions around the world. It’s also meant to call attention to the existing male-female disparity in that leadership, particularly at the corporate board level.

“SHE is a daring and confident girl celebrating the ‘can-do spirit’ of women — who are taking charge today and inspiring the next generation of leaders,” SSGA CEO Ron O’Hanley said during a speech on Tuesday at the 2017 Corporate Governance Symposium at the University of Delaware. “SHE stands as a reminder to corporations across the globe that having more women in leadership positions contributes to overall performance and strengthens our economy.”

SHE will be with the Charging Bull for up to a month. The installation comes just one day ahead of International Women's Day and the one-year anniversary of State Street's Gender Diversity Index ETF (SHE).

The statue is part of a broader initiative. SSGA is also taking action by calling on the more than 3,500 companies in the U.S., U.K. and Australia that it invests in – representing more than $30 trillion in market capitalization – to take intentional steps to increase women on their corporate boards.

Among all listed companies, SSGA finds that more than half of the companies in Australia (53%), U.K. (55%) and U.S. (63%) have boards where fewer than 15% of directors are women. In addition, 45% of the listed companies in Australia have no female directors; neither do 36% of the listed companies in the U.K. or 35% of the listed companies in the U.S.

SSGA developed a list of guidelines to drive greater board gender diversity through active dialogue and engagement with company and board leadership.

“These principles are based on research showing the need for boards to expand the search for candidates beyond existing director networks and to address sources of unconscious bias that might inhibit the recruitment of women,” O’Hanley said during his speech.

The guidelines are:

  1. Assess the current level of gender diversity on the board and within management ranks.
  2. Establish goals aimed at enhancing the level of gender diversity on the board and senior management.
  3. Identify “diversity champions” on the board and within management who would support initiatives to meet established goals.
  4. Address behavioral bias in the director search and nomination process, including expanding the search for potential director candidates beyond existing director networks.
  5. Consider female directors for leadership positions and on key board committees.
  6. Enhance transparency and communication with investors on the board’s position on gender diversity and report on progress against established goals.

While this is the preferred approach, what if these guidelines don’t work? In the event that a company fails to take action to increase the number of women on its board, SSGA will use proxy voting power to influence change – voting against the chair of the board's nominating and/or governance committee if necessary.

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