State Street Global Advisors will begin pushing big Japanese and Canadian companies to put more women on their boards, an extension of a shareholder campaign that started this year in the U.S., the U.K. and Australia.
The index-fund giant, a division of trust bank State Street Corp., is voting against the re-election of directors charged with nominating board members if they don't make strides at adding women. This year State Street found 468 U.S. companies where it was a shareholder had no women directors. Of those, 400 received "no" votes on directors.
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In 2018, State Street will apply the same test to about 1,200 holdings in Japan and Canada.
State Street chose those countries because of the relatively low representation women have on boards there. Fifty-five percent of the companies in Japan's Topix 500 index have no women on their boards, along with some 40% of those listed on the Toronto Stock Exchange, according to State Street's calculations. By comparison, about 25% of the companies in the Russell 3000 index lacked a single women director earlier this year.
State Street's boardroom diversity campaign, launched in March, has drawn attention to the dearth of women on corporate boards while also putting the firm's own diversity policies in the spotlight.
Its "Fearless Girl" statue, placed near Wall Street's iconic bull in downtown Manhattan earlier this year, emerged as a popular symbol for the effort. Then, in October, State Street agreed to pay $5 million to settle U.S. Department of Labor allegations that it paid female and black employees less.
State Street President Ron O'Hanley said State Street disagreed with the methodology Labor officials used to determine pay imbalances, noting the complaint only covered employees in a single office in 2010 to 2011. He said the firm has since improved its record for hiring, developing and promoting women.
In the most recent round of executive promotions, which occurred earlier this year, 43% were women, he said. That is a higher share than the firm's overall pool of vice presidents, senior vice presidents and executive vice presidents, which is roughly 33% female. In 2016, 45% of all new hires were women.
"This isn't like we turned it around in 2017," Mr. O'Hanley said. "It's been a steady trend up."
Since the start of State Street's boardroom campaign in the U.S., 42 companies that received a 'no' vote from State Street have moved to address the lack of gender diversity, according to Mr. O'Hanley.
"Some of the votes did catch firms by surprise," Mr. O'Hanley said. "We were surprised they were surprised. The conversations are much deeper now."
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(END) Dow Jones Newswires
November 13, 2017 17:11 ET (22:11 GMT)