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The world’s third-largest asset manager is pressuring the roughly 3,500 companies it invests in to put more women on their boards.
State Street Global Advisors, the asset management arm of State Street Corp., says it will vote against board members responsible for director nominations or governance at companies that fail to act on gender diversity.
“A key contributor to effective independent board leadership is diversity of thought, which requires directors with different skills, backgrounds and expertise,” Ron O’Hanley, SSGA’s president and chief executive officer, said in a March 7 statement issued on the eve of International Women’s Day. “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.”
Companies from Avon Products Inc. to General Motors Co. have at least half of their board seats filled by women, according to a recent study conducted by Institutional Shareholder Services Inc. They represent less than 1 percent of S&P 1500 boards, however, and progress on gender parity is slow.
Companies often cite a limited pool of suitable female director candidates as a primary obstacle to achieving greater gender diversity in the boardroom. But State Street’s new guidance says the biggest barriers are current practices for nominating directors and behavioral biases that continue to undervalue the contributions of women in the workplace.
Research from MSCI Inc. shows that companies with at least three women on their boards performed better financially than those without any female directors.
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State Street Global Advisors' guidance on gender diversity is available at http://src.bna.com/mNn
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