State Street votes to bridge gender gap

Prominent asset manager State Street will vote against companies failing to address their gender imbalance within the next year

 
State Street votes to bridge gender gap
State Street will vote against companies failing to address gender imbalance in the workplace 
Author: Kim Darrah
March 7, 2017

Asset management giant State Street has announced a bold push towards improving gender balance in the corporate world. According to a report in The Wall Street Journal, State Street Global Advisors – the company’s investment management division – will vote against companies failing to promote more women to their management boards.

State Street is one of the largest asset managers in the world, managing a staggering $2.4trn of assets. According to the report, the asset manager will allow companies with a lack of gender balance up to a year to add women to their boards before taking action. If no improvements are made, State Street will then use its voting rights to oppose the re-election of the committees nominating new board members.

State Street will allow companies with a lack of gender balance up to a year to add women to their boards before taking action

Rakhi Kumar, the money manager’s head of corporate governance, said: “Some companies may say you’re wrong and we agree to disagree. In those cases we have no choice but to use our vote.”

A recent study by McKinsey & Co surveyed more than 34,000 employees throughout the US to investigate the stubborn issue of gender imbalance. The report emphasised that while companies’ commitment to gender diversity is at an all-time high, there is still disconnect between commitment and concrete results. It further found women made up just 19 percent of the C-suite positions surveyed.

The study concludes: “To level the playing field, companies need to treat gender diversity like the business imperative it is, and that starts with better communication, more training, and a clearer focus on results.”

Many will hope State Street’s decision can provide a foundation for a greater commitment to diversity in the near future. However, this approach is not only moral, but strategic as well. A growing body of evidence has established a link between gender balance and higher profits, sales and innovation.