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State Street adds option to fully back
corporate boards
By
Ross Kerber
November 29, 2023 10:47 AM EST
A State Street
Global Advisors banner is hung outside the New York Stock Exchange
(NYSE) in New York, U.S., March 8, 2021. REUTERS/Brendan
McDermid/File Photo
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BOSTON, Nov 29 (Reuters) - State Street's (STT.N) asset-management
arm will give retail investors an option to fully back corporate
boards as it brings online features to allow fund shareholders to
control their proxy voting rights, executives said.
The option comes as State Street and rivals move to devolve proxy
voting powers to shareholders on matters like director elections or
environmental, social and governance (ESG) issues.
The strategy could blunt criticism the companies, known for their
passive funds, have gotten from many sides over their votes at
corporate annual meetings.
State Street Global Advisors said
in May that by next year some investors of its index equity
assets could influence their votes by choosing among various policies
offered by proxy adviser Institutional Shareholder Services.
It has offered
seven such policies including the ISS benchmark policy and
alternatives that allow investors to cast their votes to emphasize
things like socially responsible investing or union-oriented voting
priorities.
State Street also has offered the "ISS Global Board Aligned" policy,
created this year by ISS in a bid to assuage the concerns of some U.S.
Republican politicians who had criticized the proxy advisor for
supporting too many environmental or social causes.
But even that policy directed some proxy votes to be cast against
boards' recommendations on governance questions like executive pay or
share structure, said Lori Heinel, global chief investment officer at
State Street Global Advisors.
She said the worry was the policy could be misunderstood given its
name, and worked with ISS to develop the new option. "The angle here
was, if you say you're aligned with management, let's go all-in," she
said.
State Street Global Advisors manages $3.7 trillion in all. Its voting
choice program has been open to institutional investors to date, and
will open to most retail investors starting on Wednesday. Of its $1.7
trillion in index equity assets available under the program, $1.36
trillion is currently eligible with the remainder aimed to be
available by the end of next year.
Reporting by Ross Kerber; Editing by Stephen Coates
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Ross
Kerber
Thomson Reuters
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Ross Kerber is U.S. Sustainable
Business Correspondent for Reuters News, a beat he created to
cover investors’ growing concern for environmental, social and
governance (ESG) issues, and the response from executives and
policymakers. Ross joined Reuters in 2009 after a decade at
The Boston Globe and has written extensively on topics
including proxy voting by the largest asset managers, the
corporate response to social movements like Black Lives
Matter, and the backlash to ESG efforts by conservative
politicians. He writes the weekly Reuters Sustainable Finance
Newsletter....
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