SSGA EVP & Chief Investment Officer Lynn Blake provides instructive guidance to portfolio companies on board diversity engagement in a recent IR Magazine interview:
Blake encourages companies that operate with an all-male board to engage with SSGA to explain why. ‘It’s important to have that discussion and understand what their [portfolio companies’] concerns are and explain why it’s important to us as a shareholder, to our portfolios and to our investors,’ she says.
‘It’s all centered around the business case. There’s strong evidence that shows a board that has greater diversity and more women in board positions leads to better financial outcomes. The majority of conversations we’ve had indicate that there’s a willingness.’
Blake dispenses with companies' most commonly expressed reasons for the absence of board gender diversity - which she identified as: (i) no proven cause & effect between female directors and better financial performance, and (ii) the alleged lack of a sufficient number of qualified women - by noting the reduced likelihood of groupthink with increased diversity, and the need for boards to expand their director candidate pools beyond the traditional current/former CEO nominee model to access more qualified women, respectively.
What's next on the behemoth investor's now-global Fearless Girl agenda? As previously announced and per its proxy guidelines (discussed here), SSGA is expanding its board gender diversity voting policy, and also beginning to scrutinize diversity in companies' management ranks.
See also these prior reports: "State Street Expands Gender Diversity Push to the All Management Ranks" and "Board Gender Diversity: State Street Votes “No” on 400 Nom/Gov Chairs," and additional information & resources on our Institutional Investors and Board Diversity pages. This post first appeared in the weekly Society Alert!