SINGAPORE - One of the world's largest asset managers, State Street Global Advisors (SSGA), has decided to take voting action against six companies out of the 30 listed on the Straits Times Index (STI), if they do not add any women directors to their all-male boards.
It said on Friday (March 6) that it will vote against the chair of the nomination committee or the director most responsible for the nomination process, this year and for the next two years. If the company still does not respond, SSGA will then vote against the full nomination committee in the following year, said SSGA global co-head of asset stewardship Benjamin Colton in a conference call with reporters.
Mr Colton declined to reveal the names of the six companies nor SSGA's holdings in them, but said it has holdings in the index companies. The firm will not nominate directors to the boards in question.
A check by The Straits Times of the STI constituents against their websites and the Council for Board Diversity's list of companies with no women directors shows that Dairy Farm, Jardine Matheson Holdings, Jardine Strategic Holdings, UOL Group and Yangzijiang Shipbuilding are among those with no women directors.
This is the first year SSGA, which manages some US$3.12 trillion (S$4.32 trillion) in assets, is extending its gender diversity voting guidelines to Singapore and Hong Kong. It has identified 11 of the 50 companies in Hong Kong's Hang Seng Index which have no women on their boards.
Headquartered in the United States, SSGA first introduced the voting guidelines in the US, United Kingdom and Australia in 2017, and extended them to continental Europe, Canada and Japan in 2018.
Mr Colton said the firm chose to look at Singapore and Hong Kong this year because the gender diversity picture is quite advanced in these markets.
"A lot of companies have many women on the board, so those companies which we identified are really becoming laggards and outliers amongst the top players in the indices," he said.
SSGA's move is part of its Fearless Girl campaign, which began with a statue of a girl being placed on Wall Street on the eve of International Women's Day in 2017 and the launch of the voting guidelines.
International Women's Day falls on March 8.
SSGA said in a media release that as of last month (Feb), 681 out of the 1,384 publicly-traded companies which it engaged worldwide for not having female directors had since added at least one woman to their boards.
Mr Colton noted that Japan had a very low level of gender diversity on boards as well as in executive management when SSGA extended the guidelines there. Since then 101 boards had added a female director.
He said that SSGA wants to work with the firms it identifies to change the mentality about having women on boards, and to encourage them to develop a pipeline of female leaders, as evidence has shown that companies with board diversity outperform over time.
"There's diversity in thought, there's less group think, less cronyism," he said.
"Our target is to really change the mindset within companies, from why do we need a woman on our board to...why don't we have a woman on our board."
Although it is useful for directors to have industry expertise, companies can also cast their net wider and consider women with finance experience, global leadership roles or insights from a government perspective, added Mr Colton.
Singapore's Council for Board Diversity, which aims to equalise the number of women and men on boards, found that as of June last year, 21 of the top 100 listed companies here had all-male boards. The share of women on boards in the 100 companies was 15.7 per cent, or 134 of the 854 directorships on offer.
It has set a target for the top 100 primary-listed companies to have women comprise 20 per cent of their boards by this year. The council also hopes all listed companies will reach the target of 25 per cent women directors by 2025 and 30 per cent by 2030.