ProXXy battles

7 March 2017 By Tom Buerkle Follow @tombuerkle

Women in the boardroom can improve performance, but U.S. companies have been slow to adapt. State Street, where three of 11 directors are female, is threatening proxy fights if companies don’t widen their gender horizons. It’s a smart way for quieter fund managers to get pushy.

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State Street Global Advisors on March 7 unveiled an initiative to increase the number of women on corporate boards, citing studies showing that companies with greater gender diversity tend to have stronger financial performance and fewer governance-related problems.

The $2.5 trillion asset manager said that although most companies support gender diversity in principle, common practices such as relying on existing director networks for candidates and requiring nominees to have chief executive experience limit female participation in practice.

Boston-based State Street said it would engage with companies to ensure that boards have some female directors, and to promote greater gender diversity in senior management ranks.

"In the event that companies fail to take action to increase the number of women on their boards, despite our best efforts to engage with them, we will use our proxy voting power to effect change – voting against the Chair of the board’s nominating and/or governance committee if necessary,” the firm said.

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