Gender Equity Investing

Fearless Girl and Women on Boards: State Street Puts on Pressure in Support of Diversity


“Know the power of women in leadership,” reads the plaque beneath the Fearless Girl statue in Manhattan’s financial district. Standing opposite the Wall Street bull in a posture of proud defiance, the statue and its commentary on corporate gender diversity made waves when it was installed in the spring of 2017. But for State Street Global Advisors, who commissioned the artwork, Fearless Girl represents more than a mere symbolic gesture to the low number of women on boards.

According to Bloomberg, the corporation also took action, sending letters to 476 companies it identified as lacking in board diversity—and then voting against re-election of chairs and senior members of boards who did not commit to making changes.

Corporations Still Have a Long Way to Go

As strong as this push was, it’s fighting against systemic, centuries-long discrimination against women. To understand the current scale of the problem, consider the numbers.

While women represent more than half of the US population and nearly half of the country’s workforce, according to a Catalyst report, only 5.2% of CEOs at S&P 500 companies are women, and female board members account for just 21.2% of all board positions.

Furthermore, 2.8% of S&P 500 corporate boards have no female directors, and 24.6% have only one woman. Just 14.2% of organizations have boards consisting of at least 30% women.

So, despite the increased discussion of diversifying corporate boards, the numbers show that women are still underrepresented. The problem the numbers point to, though, has consequences not only for the women excluded but also for the companies who exclude them. This is why businesses and investors are pushing for continued action to create more gender diversity in corporate leadership and advisory.

Why It Matters

It’s fair to ask why corporations should make a conscious effort to bring more women into top positions. The reasons extend far beyond needing to appear inclusive to avoid bad PR. Improving gender inclusivity can result in tangible financial benefits.

To thrive in changing and often uncertain market landscapes, businesses need diversity of experience, perspective, and problem-solving approaches. Innovation doesn’t happen in a vacuum, and it rarely happens when a team—either on the ground floor or on the board—is made of members who approach business from the exact same place.

The Harvard School of Public Health cites a number of studies showing some of the ways women on boards bring companies better results, including:

  • A diverse board that includes women better can mirror actual client and consumer bases, allowing companies to more deeply and authentically understand their customers.
  • A gender-diverse board can signal that a company makes room at the table for people based on competence and merit, which can enrich the talent pool available to fill new positions.
  • Companies who include women as directors seem better at managing risk and focus more on long-term priorities.

What Investors Can Do to Make an Impact

The business case for getting more women in the boardroom is clear. But how can shareholders actually push corporations to take action?

For one, investors may consider seeking out corporations that have already made commitments to getting more women in managerial positions. Investors may select mutual funds that weight for gender inclusion. If investors find that their portfolio contains laggards, they can use proxy votes (much like State Street Global Advisors) to make it clear that this is an area in need of immediate action. For some inspiration, Harvard Law School lays out examples of successful actions by investors.

Shareholder engagement and activism matter—they can be the key to making a difference. Indeed, with enough education and effort, in time the words accompanying the Fearless Girl statue may come to seem a redundant command.


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