On the Eve of International Women’s Day, SSGA Issues Guidelines and Places Statue in New York City’s Financial District as a Symbol of Need for Action
BOSTON--(BUSINESS WIRE)--On the eve of International Women’s Day and the one-year anniversary of its SPDR®SSGA Gender Diversity Index ETF (ticker: SHE), State Street Global Advisors (SSGA), the asset management business of State Street Corporation (NYSE: STT) is calling on the more than 3,500 companies that SSGA invests on behalf of clients, representing more than $30 trillion in market capitalization1 to take intentional steps to increase the number of women on their corporate boards.
To mark this effort and the power of women in leadership, SSGA has placed a statue of a young girl, representing the future, in the center of the world’s financial capital – right near Wall Street in New York City.
“We believe good corporate governance is a function of strong, effective and independent board leadership," said Ron O’Hanley, president and chief executive officer of SSGA. “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.”
This morning O’Hanley will detail the guidance in his keynote speech at the Corporate Governance Symposium hosted by the University of Delaware’s Weinberg Center for Corporate Governance. The focus of this year’s symposium is “Governance Issues of Critical Importance to Boards and Investors in 2017.”
According to an MSCI study, companies with strong female leadership generated a return on equity of 10.1 percent per year versus 7.4 percent for those without a critical mass of women at the top, which is a 36.4 percent increase of average return on equity. 2,3 And, according to a 2015 McKinsey Global Institute report, moving to a scenario where women participate in the economy identically to men would add up to $28 trillion, or an additional 26 percent, to annual global GDP by 2025 compared to a business as usual scenario.4
Despite this, although there has been some progress made on the inclusion of women on corporate boards, one out of every four Russell 3000 companies do not have even one woman on their board, and nearly 60 percent have fewer than 15 percent of their boards comprising women directors.
SSGA today issues guidelines to drive greater board gender diversity through active dialogue and engagement with company and board leadership. In the event that a company fails to take action to increase the number of women on its board, SSGA will use proxy voting power to influence change - voting against the chair of the board’s nominating and/or governance committee if necessary.
“As part of our review of boards’ gender diversity, we analyzed and compared the level of diversity in three markets: Australia, the UK and the US,” said Rakhi Kumar, head of corporate governance at SSGA. “Most large cap company boards in these markets have at least one female director but have yet to fully embrace gender equality in their ranks. We believe boards have an important role to play in increasing gender diversity and believe our guidance can help directors take action now.”
"I wholeheartedly support State Street's efforts," said Chris Ailman, Chief Investment Officer, CalSTRS. "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 help address the gender gap head-on, SHE incorporates an innovative charitable component that focuses on strengthening the next generation of women leaders - particularly in industries where women have low representation today such as STEM (Science, Technology, Engineering and Math). SSGA is directing a portion of their revenues and a match from SSGA to a Donor Advised Fund, which has awarded a $50,000 grant to Girls Who Invest, a nonprofit organization founded in April 2015 dedicated to increasing the number of women in portfolio management and executive leadership in the asset management industry.
About State Street Global Advisors
For nearly four decades, State Street Global Advisors has been committed to helping financial professionals and those who rely on them achieve their investment objectives. We partner with institutions and financial professionals to help them reach their goals through a rigorous, research-driven process spanning both active and index disciplines. We take pride in working closely with our clients to develop precise investment strategies, including our pioneering family of SPDR ETFs. With trillions* in assets under management, our scale and global footprint provide access to markets and asset classes, and allow us to deliver expert insights and investment solutions.
State Street Global Advisors is the investment management arm of State Street Corporation.
*Assets under management were $2.47 trillion as of December 31, 2016. AUM reflects approx. $30.62 billion (as of December 31, 2016) with respect to which State Street Global Markets, LLC (SSGM) serves as marketing agent; SSGM and State Street Global Advisors are affiliated.
1 As of 2/28/17
2 The methodology used in MSCI’s study is different than that of the index, and as such, the results of the study should not be viewed as indicative of future performance of the index or SHE. Return on equity is not representative of the performance of any investment or the potential return of any ETF.
3 Source: Lee, Linda Eling, et al. Women on Boards: Global Trends in Gender Diversity on Corporate Boards, MSCI, November 2015. Accessed on February 17, 2016. MSCI defined strong female leadership as having a board of directors with at least three women, which research suggests comprises a critical mass for decision making influence, or a percentage of women that’s higher than average in the company’s country. MSCI defined companies without a critical mass of women at the top as companies with less than three women on their board of directors or a lower percentage of women than the average in the company’s country.
4 Woetzel, Johnathan. “The Power of Parity: How Advancing Women’s Equality can Add $12 Trillion to Global Growth.” McKinsey Global Institute, September 2015
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