State Street calls for women on boards of directors around the world

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The Fearless Girl statue is seen as heavy rains fall as a severe weather system traverses the Manhattan area in the New York City neighborhood of New York, United States, April 21, 2021. REUTERS / Andrew Kelly / File Photo

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BOSTON, Jan. 12 (Reuters) – Asset manager State Street Corp (STT.N) expects all portfolio companies globally to have at least one woman on their board, said the leaders, expanding a policy previously focused on developed markets.

In a letter to directors released Wednesday, Cyrus Taraporevala, CEO of State Street Global Advisors, said the new policy in effect this year builds on previous actions to promote diversity on the board. These include her support for the famous “Fearless Girl” statue in Manhattan, installed in 2017 ahead of International Women’s Day.

Ben Colton, a manager of the division, said that while many companies say they cannot find qualified director candidates, they simply need to broaden their board nomination processes.

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“We think it’s not a pipeline issue, it’s an access issue,” Colton said in an interview.

State Street has said it is ready to vote by proxy against executives on the board when companies fail to meet its expectations for diversity.

Data from executive research firm Spencer Stuart shows that women make up 28% of directors in American companies and, at the high end, 45% in French companies. But the figure drops to 16% for Indian companies and 11% for Japanese companies, showing the challenge State Street faces with its new policy.

With $ 3.9 trillion under management, State Street is one of a select group of influential index fund companies that focus on environmental, social and corporate governance (ESG) issues. Read more

State Street’s Taraporevala also said the company expects boards of directors in most developed countries to have women representing at least 30% of their directors by next year, and that companies should take further action with respect to diversity, including disclosing details about the racial or ethnic origins of directors.

Separately, State Street will expect companies in developed economies to provide details as outlined by the Climate-Related Financial Disclosures Task Force, as have other large asset managers.

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Reporting by Ross Kerber in Boston Editing by Matthew Lewis

Our Standards: Thomson Reuters Trust Principles.

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