State Street Global Advisors (SSGA) plans to step up its campaign for more female representation on company boards in the next 12 months.

In its latest stewardship report, published yesterday, the $2.8trn (€2.5trn) asset manager said it voted against 667 company boards over a lack of management diversity, at annual shareholder meetings in the 12 months to the end of June 2019.

Approximately 43% of listed companies with which it had engaged over a lack of board diversity since 2017 had promised to take positive action, it reported.

However, SSGA acknowledged that, despite the rise in awareness of the gender diversity issue, more than half of the companies with which it engaged (57%) had still not taken action.

“Consequently, in 2020, we will vote against the entire nominating and governance committee, not just the chair, in our target markets if we have concerns about the lack of gender diversity for four consecutive years and are unable to engage in productive dialogue,” the asset manager said.

Fearless Girl

State Street’s ‘Fearless Girl’ statue was moved from Wall Street in New York to Paternoster Square in London, close to the London Stock Exchange, in March this year

Gender diversity in company leadership has been one of the top issues pushed by SSGA since it launched its ‘Fearless Girl’ campaign in March 2017, marked by a statue created by Kristen Visbal and erected in Wall Street.

Since then, SSGA has identified 1,357 companies as having no women on their boards, according to the asset manager’s stewardship report. Of these, 582 have since either added a female director or committed to doing so.

The majority of the companies highlighted by SSGA – 910 – were US-listed firms, with a further 293 in Japan. In the UK and Europe, SSGA engaged with 26 companies, reporting positive results in 19 cases. 

Notes: Chart shows percentage of companies in each country/region identified by SSGA as not having a female director and subsequently seeking to address this.
Sample sizes: UK – 13; Europe – 13; Australia – 55; US – 910; Canada – 73; Japan – 293.

“Research shows that companies with greater levels of gender diversity have stronger financial performance as well as fewer governance-related issues such as bribery, corruption, shareholder battles and fraud,” SSGA said.

“A January 2017 report by the Conference Board suggests that the reason for the outperformance is largely attributed to the outside perspectives brought into the boardroom by adding women to the board.”

SSGA also cited research by Willis Towers Watson and Australia’s Future Fund, which identified improving “cognitive diversity” as a key factor in “helping to meet investment goals given the uncertain outlook in capital markets”.

The Fearless Girl campaign was also used to market a dedicated SSGA exchange-traded fund (ETF), focused on companies with at least one female director. Since its inception in March, the ETF – which trades with the stock market ticker SHE – has gained 23%, while the S&P 500 index has risen by 49%.