Fearless Girl must stay until Wall St. pledge is kept
The unsavory, yet unsurprising, image of a suited male mock-humping the bronze statue of Wall Street’s Fearless Girl is a serviceable moment in these respects: It reminds us why her defiant presence is necessary, and it seems to have heightened the determination to make the pony-tailed wonder a permanent fixture.
If New York City does decide that Fearless Girl deserves to be as much a part of the Wall Street landscape as the Raging Bull she faces — and really, it would be so foolish to decide otherwise — she will serve as a constant reminder to the folks who put her there to be true to their word.
The company in question is State Street Global Advisors, a Boston-based money manager with $2.4 trillion (U.S) in assets under management run by Ron O’Hanley.
Hours after Fearless Girl planted her bronze feet on the cobblestones, O’Hanley gave a speech at the Weinberg Center for Corporate Governance at the University of Delaware about the role of asset managers to push back against the pressures of “short-termism.”
He described this battle as “an existential issue for capitalism” and made the point explored previously here: Long-term value begins with the board.
“I and the rest of my team believe that effective, independent and diverse board leadership is a precondition for ensuring that companies are focused on the long term,” O’Hanley said before documenting the woeful under-representation of women.
The evidence is clear: The presence of women on boards directly correlates to board performance.
The specifics on this are noted with such seasonal frequency as to become tiresome.
Improved board diversity results in heightened risk-assessment, breaks down crony barriers, reduces confrontation, sharpens decisionmaking and blasts the held-captive-by-management cancer that has historically metastasized through corporations.
When independence is absent, O’Hanley emphasized, “the urgent triumphs over the important.”
What hasn’t moved with urgency is the remaking of board composition.
Three decades after I first started writing about the need to seek gender balance on boards of directors, we’re not that much further ahead.
O’Hanley noted in his speech that one-quarter of the companies on the Russell 3000 Index have zero women on their boards. We’re not talking about junior miners here; the index is composed of the 3,000 largest U.S. traded (and U.S. incorporated) stocks. The Harvard Business Review has noted that the representation of women on boards at the S&P 500 hasn’t increased significantly “over the past decade, and, at 18.7 per cent, pales in comparison to the figures in most of Europe.”
Last week, the Canadian Securities Administrators (CSA) published the underlying data for the review of women on boards and in executive positions that it released last fall. A handy spreadsheet reveals a bouquet of companies that had zero representation of women on the board, a flurry of companies in and around 12-per-cent representation, and the infrequent corporation that makes it to the 33-per-cent mark.
In CSA’s sample, an overall total of 12 per cent of board seats were held by women, up a single per cent from the year prior.
In an atmosphere of lassitude, State Street has taken the bull by the horns, as it were, presenting Fearless Girl as the personification of a call to action. But in fact she stands on soft turf. “Our preferred approach is to drive greater board diversity through an active dialogue and engagement with company and board leadership,” the company states.
I suspect Fearless Girl would be frustrated by such language.
This gentle diplomacy is presented in a gender-diversity “framework,” in which State Street urges companies to “assess the current level of gender diversity” and to “establish goals aimed at enhancing the level of gender diversity on the board and senior management.”
Companies should “consider female directors for leadership positions and on key board committees” and “address behavioural bias in the director search and nomination process.”
In this attracting-bees-with-honey strategy, State Street requests that companies be transparent in the goals they set for themselves and in the progress achieved against those goals. In other words, we won’t know for at least a year whether the company’s soft push for voluntary change has had any effect.
State Street’s diversity framework warns: “In the event that companies fail to take action to increase the number of women on their boards despite our best efforts to actively engage with them, we will use our proxy voting power to effect change — voting against the Chair of the board’s nominating and/or governance committee if necessary.”
History tells us there will be ample opportunity to exercise that proxy power. But will State Street take action? That’s the promise Fearless Girl represents. And the reason she needs to become as permanent a fixture as the charging bull whose company she seeks. jenwells@thestar.ca