Here’s why Fearless Girl shouldn’t break out the champagne just yet

Here’s why Fearless Girl shouldn’t break out the champagne just yet

Fearless Girl has yet to move to her new home, but the good news is that she will reside somewhere near the New York Stock Exchange, permanently.

You remember her, of course, with her defiant fists on hips stance, staring down the Wall Street Charging Bull. Critics dismissed her bronze presence as a mere marketing ploy by State Street Global Advisors, the multibillion-dollar asset manager that commissioned the statue in celebration of International Women’s Day in the spring of 2017. The irony in the criticism was that Fearless Girl would have to fight for her place in the world.

Since it commissioned Fearless Girl for International Women’s Day in 2017, State Street has continued to push for board diversity.
Since it commissioned Fearless Girl for International Women’s Day in 2017, State Street has continued to push for board diversity.  (JEWEL SAMAD / AFP/GETTY IMAGES FILE PHOTO)

Credit where it’s due: State Street, the third largest asset manager in the world, has stood firm in its belief that Fearless Girl is not only an artful but effective reminder of what’s still missing in corporate America. Corporate everywhere, actually.

We’ve been writing about the under-representation of women in power, on boards, in the C-suite for decades. The stereotypes. The unconscious biases. The sorry belief that with patience, with time, the injustice will organically be resolved. But no.

Last week State Street released its latest report card on the impact of the Fearless campaign. What’s notable is that the company didn’t just make a big splash at launch 18 months ago and dump the idea. Instead, there have been continued moves to strengthen the effort, and to broaden the tent.

Last November, the list of targetted jurisdictions was expanded from its initial focus of the U.S., U.K. and Australia to include Canada and Japan. So Canadian companies in which State Street has a position would be put on notice that the firm would vote against the chair of a company’s nominating committee if there were no female directors or candidates.

Now State Street has taken a significant next step: starting in 2021 State Street will vote against the entire slate of board members on targetted Canadian nominating committees if two conditions have not been met. One: having at least one woman on the board. And two: having engaged in “successful dialogue” with State Street’s gender diversity program for three consecutive years. The clock starts ticking now.

The company’s diversity program is an often overlooked part of the initiative. This isn’t just an auditing exercise, it’s rooted in such objectives as addressing behavioural biases in the nomination process and establishing long-term diversity goals.

Of course, measurement is a crucial piece of the puzzle. In its most recent report card, the tally of companies responding by adding a female director has risen to 300 from 152 at first report. Of the 300, 215 are U.S. companies. Here’s a significant number: the percentage of companies in the Russell 3000 Index with a female director has declined, as of last June, to 16 per cent from 24 per cent when this initiative started. It’s something.

State Street has been busy, voting against 581 companies in the first half of this year for failing to take action on board gender diversity. After Canada was added to the watch list, State Street chief operating officer Ron O’Hanley remarked on how “surprising” it was to view this country’s pitiful performance on gender, especially given its progressive reputation. O’Hanley is slated to become CEO of State Street Corp., parent company to the investment arm, by year’s end, so it’s a safe bet that diversity will remain a top priority.

Canada has budged, so that’s good news. Sixty-four Canadian companies are shamed for not having a single board member, or would be shamed if they were named individually, which they are not. But 23 per cent of identified businesses have added a woman director or have pledged to do so.

Yet I don’t see the need for champagne. The Canadian Securities Administrators released its own review last week and, sure, the representation of women has grown, but looking at its much broader data base we see that just 15 per cent of board seats overall are held by women. That’s a glacial 4-per-cent increase in four years. When the CSA finds that 218 issuers have no women on their board — zero, nada — we gird ourselves for the usual blather about junior mining companies, or oil and gas companies, or how hard it is to find knowledgeable women.

Here’s a number related to that point: the CSA did examine the 269 issuers that have adopted a policy enhancing the representation of women on board. Those boards are composed, on average, of 20 per cent women. Issuers with no such policy are composed, on average, of just 12 per cent women.

I’ll stop with the numbers now. Proxy advisory Glass Lewis has cited Fearless Girl as central to what it deems the “strategic upheaval” in the board gender diversity conversation. In February the mighty BlackRock Inc. flooded the in-boxes of top companies with a paucity of women in power. How was it that board diversity was so lacking when it is board diversity that aids strategic decision making, BlackRock wanted to know. BlackRock has set its baseline expectation at two women directors per board. There’s lots of institutional investor action on this file.

As for Fearless Girl, she still awaits notification of her final address. As with the generation of young women inspired by her, she wouldn’t be bullied into submission.

Jennifer Wells is a business columnist based in Toronto. Reach her on email:

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