State Street Votes Against 400 Companies Citing Gender Diversity
July 25 2017 - 9:08PM
Dow Jones News
By Justin Baer
Index-fund giant State Street Global Advisors voted against the
reelection of directors at 400 companies this year on grounds they
failed to take steps to add women to their boards.
The money manager, a unit of custody bank State Street Corp.,
said it discovered that 476 companies whose shares it owned lacked
a single female board member. Of that group, the Boston-based firm
said 400 companies failed to make any significant effort to address
the issue, and voted against the reelection of directors charged
with nominating new board members.
State Street, which oversees more than $2.5 trillion in assets,
had pledged in March to throw its weight behind the issue of gender
diversity this year. At that time, State Street said a firm that
doesn't have women on its board, for example, would have to prove
to State Street it attempted to cast a wider net and set diversity
goals.
Primarily a manager of exchange-traded funds and other so-called
passive investments, the firm targeted companies within Russell
3000 Index, the U.K.'s FTSE 350 and S&P/ASX 300 in Australia.
State Street owns a combined 3,500 stocks in those three
indexes.
State Street said it had productive discussions with 42 of the
476 companies that had zero female directors. In 34 instances,
neither the chairman of the board's nominating and governance
committee nor the panel's senior member came up for reelection this
year.
State Street is among the largest passive fund managers in the
world -- a sector that is amassing significant governance power as
investors pour billions into lower-cost index-tracking funds like
exchange-traded funds.
While some critics have questioned whether these passive giants
would be as hard on corporate boards as active managers had been in
the past, State Street has taken an aggressive stance on certain
corporate-governance matters. In recent years, for example, the
firm focused on long-tenured board members.
Write to Justin Baer at justin.baer@wsj.com
(END) Dow Jones Newswires
July 25, 2017 20:53 ET (00:53 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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