By Ross Kerber (Reuters) – In a surprising move, State Street’s asset management unit recently announced the abandonment of specific targets for the number of women and minority directors on corporate boards. This change in proxy voting guidance, detailed on the company’s website, aligns State Street with other major asset managers who have faced political pressure to slow the pace of diversification within boardrooms, particularly in terms of gender and ethnicity.
State Street, known for its installation of the “Fearless Girl” statue in Manhattan’s financial district in 2017 to promote gender diversity in business, had previously adopted a global proxy voting policy in March 2024. This policy mandated that companies in major indexes maintain a board composition with at least 30% female representation or face the risk of votes against nominating committee members. Additionally, larger S&P 500 companies were expected to include at least one director from a racial or ethnic minority background.
However, the latest guidance from the Boston-based asset manager, dated March 2025, does not include these specific targets. Instead, State Street now emphasizes that board nominating committees are best suited to determine the composition of their boards.
In response to inquiries, a representative from State Street stated, “We annually review our proxy voting and engagement policy to ensure alignment with global protocols and local laws and regulations, guided by our core principles of effective board oversight, disclosure, and shareholder protection with a singular focus on value creation.”
This decision marks a significant shift for State Street and raises questions about the future of diversity initiatives within the company and the broader financial industry.
