State Street Global Advisors is calling on the more than 3,500 companies it invests in on behalf of its clients to increase gender diversity on their corporate boards.
Those companies represent more $30 trillion in market capitalization.
If a company does not take “intentional steps” to increase the number of women on its boards, SSGA could vote against the chair of that company board's nominating committee and or governance committee to incite change, the money manager said in a Tuesday news release.
Although some progress has been made in increasing the number of women on corporate boards, one of out of every four Russell 3000 companies still does not have a single woman on board, SSGA said the in news release. Additionally, at 60% of Russell 3000 companies, women comprise fewer than 15% of the board, it added.
“We believe good corporate governance is a function of strong, effective and independent board leadership," said Ronald O'Hanley, president and CEO of SSGA, in the news release. “A key contributor to effective independent board leadership is diversity of thought, which requires directors with different skills, backgrounds and expertise. Today, we are calling on companies to take concrete steps to increase gender diversity on their boards and have issued clear guidance to help them begin to take action.”
Those guidelines released Tuesday are:
- assessing the current level of gender diversity on the board and within management;
- setting goals to enhance the level of gender diversity on the board and within management;
- identifying “diversity champions” on the board and within management who would help efforts to meet the established goals;
- addressing gender bias in the director search and nomination process, and expanding the search for director candidates beyond the existing networks;
- considering female directors for key leadership positions and positions on key board committees; and
- increasing transparency and communication with investors on the board's gender diversity position and progress toward its established goals.
Christopher J. Ailman, chief investment officer of the $196.4 billion California State Teachers' Retirement System, West Sacramento, threw his support behind State Street's announcement on Tuesday. "I wholeheartedly support State Street's efforts," Mr. Ailman said in the SSGA news release. "Companies need to step up and better utilize the talents and leadership of women in their corporate boards, C-suite and throughout their ranks. This statue boldly signals to financial markets that the future depends on investing in the power of women. We all need to lean in and be bold for change now."
To symbolize the power of women in business, SSGA placed a statue of a young girl facing the iconic Charging Bull in New York's financial district on Tuesday, one day before International Women's Day.