State Street Global Advisors announced that beginning in 2020 in the U.S., U.K. and Australia it will vote against entire slates of board members on companies' nominating committees for those companies without at least one woman on the board.
The enhancement to SSGA's gender diversity voting guidelines will also be effective in 2021 in Canada, continental Europe and Japan. The money manager will also vote against the entire slate of board members for companies that have "not engaged in successful dialogue on State Street Global Advisors' board gender diversity program for three consecutive years," according to an SSGA news release.
The policy is a further enhancement of SSGA's "Fearless Girl" campaign launched in March 2017 to encourage the addition of female directors to boards. Worldwide, of the 1,228 companies SSGA identified at the launch of the campaign as lacking a single female board member, 301 have added a female director and 28 have committed to adding a female director.
The two regions with the largest number of boards without female directors were the U.S. and Japan. In the U.S., of the 816 companies lacking a female board member at the launch of the campaign, 215 have added one and 14 have committed to do so. Of Japan's 281 companies without a female board member, 40 have added one and 11 have made commitments.
Rakhi Kumar, senior managing director and head of ESG investments and asset stewardship for SSGA, said in a telephone interview that the enhancements to the gender diversity voting guidelines is to make a clearer point with those companies that either have not added a female board member or engaged at all with SSGA in discussing the issue.
"Clearly they are not responding, and more importantly, they may not be engaging with us on the issue and that can happen with any investor," Ms. Kumar said. "We've been trying to make a point. It's strong, but it's not the strongest and maybe can we take action against the rest of the nominating committee for their failures?"
Those companies aside, Ms. Kumar said the responsiveness to SSGA's guidelines has been better than anticipated.
"If you had told me on International Women's Day last year that this call to action would have the impact that it has globally, I'd say: 'You're being a little optimistic, aren't you?'" said Ms. Kumar. "I would say that it's great. It's a good response from the market and I think part of that is stemming from the fact that it's raised questions and moved a mindset among board members from 'why have a woman?' to 'why don't we have a woman?'"