State Street Global Advisers, the investment firm behind the "Fearless Girl" statue, is expected to announce Wednesday that of the 787 all-male boards in the United States, Britain and Australia that it identified and then pressured to add women, 152 did so. Another 34 said they plan to in the near term.
At 511 of the companies that did not add women, meanwhile, the firm voted against that board's chair of the nominating committee, which selects new members. It plans to expand its campaign to Japan, Canada and Europe this year and push companies, particularly those in Europe where there are quotas on the number of women at the board level, to disclose their numbers of women in executive management jobs, too.
"Only when they’re aware of what the numbers are can they think about longer term goals," said Lynn Blake, an executive vice president at State Street, noting that data on managers below the very highest ranks is usually hard for investors to get.
While the research showing the financial impact of diverse boards is interesting, she said, "the research we find even more compelling is research that goes down to senior management levels," and shows that more women can make an even greater impact on long-term financial results.
The announcement comes as other large asset-management firms have been more vocal about taking an active stance on social issues or governance reforms at the companies where they invest. In January, BlackRock CEO Laurence Fink, which manages nearly $6.3 trillion in investments, put CEOs on alert that they would be expected to answer questions such as how they plan to use savings from the tax reform law and whether they are creating a diverse workforce. State Street manages $1.8 trillion in equity assets, Blake said, nearly all of which is passively managed in vehicles such as index funds, which hold stocks that cannot be sold if investors are unhappy with management's strategy or the diversity of a company's board.
The firm is not shying away from its campaign despite plenty of controversial headlines since the statue's launch -- including having to pay $5 million in fines over its own gender pay practices and criticism that the bronze girl facing down the "Charging Bull" statue is "corporate feminism" and even "everything that's wrong with our society," in the words of one critic. (The statue only has a permit for its current spot on Broadway through March 8, but will soon find a new home in New York. A query to the mayor's press office was not immediately returned.)
In October, State Street was the subject of social media posts noting the irony or hypocrisy of a company that was trumpeting women's empowerment only to be called in on charges of pay bias. The U.S. Department of Labor alleged that in 2010 and 2011, the company discriminated against 305 of its top female employees by paying them less than male peers, as well as against 15 of its black executives who were paid less than white peers. The firm settled the claims, which were first generated by an audit of federal contractors.
"We didn’t agree with the methodology or findings," Blake said. "We had lengthy decisions to understand what they were doing and have them understand what we were doing." After reaching "a bit of a stalemate, rather than move into litigation we decided to reach an agreement and move forward."
Some also questioned the number of women State Street has in leadership positions soon after the statue's release last year. But its figures compare better than or similar to other financial services firms -- the asset management firm's parent company, State Street Corporation, for instance, has three women on its 10-member board. That's hardly an equal split, but higher than the 24 percent of BlackRock's board that are women (four of 17) and the broader average -- women hold only about 20 percent of board seats among all S&P 500 companies, according to Catalyst, a research and advisory firm.
Nearly 25 percent of State Street's 80 senior-most executives are women. While that's less than the roughly 30 percent of senior executives in the finance industry overall, the firm aims to increase its percentage of female senior vice presidents to 36 percent within five years.
"When we placed the statue, we knew it would shine a light on our organization and our gender diversity and we were prepared," Blake said. "It was aspirational not just for portfolio holdings but for us, as an organization, to think about goals and initiatives that we could have to move the gender diversity issue more strongly forward. Certainly, we knew we weren't done recruiting. ... The numbers, like at a lot of financial services organizations, aren't where we want them to be."
Blake would not name the companies where the asset management firm has lobbied to add women to the board, but noted that many were smaller to midsize public companies, as most large firms have by now added women to their boards.
She said some still didn't understand why an investment firm cared about the gender makeup of its board. "Some of the companies did indicate a surprise that this was an important issue for asset managers," she said.
The firm's president, Ronald O'Hanley, echoed a similar surprise in a speech he gave in November about the companies where it had tried to push for more diversity.
"One company seemed inconvenienced, saying: 'You want a woman, we'll give you a woman,'" O'Hanley said, while "more than one company told us 'we had no idea people really cared about this.' "
Yet even if a major investor like State Street pressures companies to add women, its activism can only go so far. It is still relatively rare to see companies get a majority of votes against directors, and shaking up boards doesn't happen often. As a Wall Street Journal headline read after the firm announced an update to its initiative last summer: "State Street pushed 400 companies to put women on boards. Most shrugged."