Money & Power

The Wall Street Firm That Commissioned the Young Girl Statue Has Only 3 Women on Its Board

In case you need a reminder that gender equality still has a long way to go.
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State Street, the firm that put up a statue of a young girl facing down Wall Street's bull to call attention to the importance of female leadership, has three women on its 11-person board of directors and five women on its 28-member leadership team.

When contacted for comment, State Street spokeswoman Anne McNally offered up the following statistics: Within the asset-management firm's most senior ranks—executive vice-presidents—the company has 18 women, representing 23 percent of the EVPs; at the next level down, senior vice-president, State Street employs 137 women, or 28 percent of that job title.

The needle isn't moving as fast as it should for gender diversity.

State Street chose International Women's Day to put up the bronze statue and call on the more than 3,500 companies in which it invests to increase the number of women on their boards. (Those companies control $30 trillion in funds—yes, you read that right.)

Last year, they launched a gender diversity index called SHE that helps investors find companies with strong female leadership on their boards. The asset manager also contributed $50,000 to Girls Who Invest, a non-profit focused on bringing more women into the finance community.

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When asked why State Street is taking these actions now, McNally said, "because the needle isn't moving as fast as it should for gender diversity."

State Street's three women, who make up 27 percent of the board seats, put the company ahead of the national Fortune 500 numbers. In 2016, 21 percent of Fortune 500 corporate board positions were occupied by women, up from 19.6 percent in 2015. Fortune found that last year 24 of those companies had boards without a single women. On a broader scale, McNally pointed out that one out of every four Russell 3000 companies do not have even one woman on their board.

"A lot of companies talk about gender diversity—look no further than 'insert company name X's' Twitter handle today on National Women's Day—but as the world's third-largest asset manager we wanted to do something,"McNally said. "As a long-term investor we have the power of our vote and the power of engagement with those companies to really evaluate how their board is composed, refreshed, and organized."

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Susan Colantuono, the CEO of Leading Women, a consulting firm focused on advancing women and closing the leadership gender gap in the workplace, said that while three women on a board may seem like a tiny number (and it is) it's actually an important minimum for these companies to hit. "Research shows that if you have one woman on a management team or board, she's marginalized," Colantuono said. "If you have two, they are pitted against each other. With three, it becomes more normal."

"Three is pretty good for the U.S., where we don't have quotas like in Europe," Colantuono said.

Across the Atlantic, Norway was the first country to put quotas in place, in 2003, to require that public companies fill at least 40 percent of their board seats with women. Iceland, Spain, and France followed with the same 40-percent requirement, Quartz reports, and Germany added a 30-percent quota in 2015.

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Hashtags and Instagrams are nice, but they're not a worthy substitute to the hard work that still needs to be done.

The new rules are working. Last year in the European Union, women accounted for 21.2 percent of board seats on the largest publicly traded companies. That's up from 11.9 percent in 2010, when the European Commission added the issue of women in leadership positions to the political agenda.

While women have been getting the majority of college degrees in America for a few years, the gap between men and women at the top corporate roles is still a canyon. And as State Street itself points out, that's not good business. They quote a study from MSCI, an organization that provides market research to institutional investors, that found that companies with strong female leadership generated a return on equity of 10.1 percent per year versus 7.4 percent for those without a critical mass of women at the top.

Here's hoping State Street's efforts add up to more than just a statue on Bowling Green Plaza. Hashtags and Instagrams are nice, but they're not a worthy substitute to the hard work that still needs to be done.

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Sam Dangremond
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