Boston-based State Street Global Advisors (SSGA) is leading a push for greater gender diversity at Canadian companies.
In the upcoming proxy season, the asset management firm says it will be voting against certain directors at companies that don’t have any women on their boards, or female candidates. In particular, it will vote against directors that are chairing their nominating committees.
Earlier this year, SSGA implemented this approach to board diversity in the United States, the United Kingdom and Australia. Now, it is expanding that approach to Canada and Japan.
SSGA reports that 55% of companies in Japan’s Topix 500, and 40% of the companies listed on the Toronto Stock Exchange currently do not have any woman on their boards. In 2018, the company aims to “provide board diversity guidance” to these companies, SSGA says in an announcement.
“As an asset manager, it’s our mission to collaborate and engage with companies, not simply impose our point of view, to help them realize the financial benefit of gender diverse leadership. There’s much work to be done and we look forward to applying our knowledge and experience to other countries,” says Rakhi Kumar, head of ESG investments and asset stewardship at SSGA, in a statement.
SSGA has already voted against directors at 400 companies that did not initiate any efforts to increase board diversity since the firm called on them to address the issue earlier this year. Since then, it reports that another 42 companies have committed to increasing the diversity of their boards, and seven of them have added women to their boards.
“The data shows that all other things being equal, companies with gender-diverse boards also have stronger long-term financial performance,” says Ron O’Hanley, president and chief operating officer of SSGA, “… this expansion to Canada and Japan will further these efforts to drive better long-term performance and returns for investors.”
Recently, proxy advisory firm Institutional Shareholder Services Inc. announced a change to its voting policies in Canada, which will see it take a similar stance against companies with no female directors and no policies for improving diversity. The firm cited growing demand from Canadian institutional investors, along with the efforts of securities regulators, to improve gender diversity among Canadian companies.
SSGA also announced it has become an associate member of the Responsible Investment Association (RIA).
Deb Abbey, CEO of the RIA, welcomed the news. “We applaud [SSGA’s] commitment to responsible investing and their focus on gender diversity. We look forward to working together in our ongoing effort to advance the integration of ESG criteria into Canadians’ investment decisions,” Abbey says in a statement.
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