State Street ditches board diversity requirement, completes Big Three DEI retreat

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"Fearless Girl" Statue Moves To Her New Home Across From NY Stock Exchange NEW YORK, NY - DECEMBER 10: The 'Fearless Girl' statue stands across from the New York Stock Exchange after a ceremony to unveil the statue's new location, December 10, 2018 in New York City. · ESG Dive · Drew Angerer via Getty Images

Lamar Johnson

Thu, Mar 6, 2025, 5:39 AM 4 min read

State Street Global Advisors has dropped a requirement for company board nomination slates to feature a certain percentage of women directors from its 2025 global proxy voting and engagement policy, per reports.
The asset manager said in a document announcing substantive changes to its proxy voting policies that its “fundamental belief is that [its] role is not to be prescriptive, but that nominating committees are best placed to determine the most effective board composition and degree of diverse experiences and perspectives represented in the boardroom.”
The changes at State Street — the nation’s third-largest asset manager — follow similar updates to asset stewardship guidelines made by BlackRock and Vanguard. The policy revisions all came after the election of President Donald Trump, who subsequently placed a focus on eliminating diversity, equity and inclusion policies from both the federal and private-sector level.

Dive Insight:

State Street’s prior policies said it would potentially vote against company boards that did not comprise at least 30% women directors, Bloomberg reported Monday. The asset manager previously announced its “Fearless Girl” program in 2017 — with an accompanying statue in New York City’s financial district — to engage with companies to “monitor their approaches to gender diversity and alignment with [State Street’s] expectations,” according to an archived page of the program. The link to the program on the firm’s DEI webpage now redirects to the firm’s asset stewardship arm’s “about us” page.

The financial services firm said in its summary of the changes that it “refined” its approach to board composition, “consistent with [its] belief that companies can benefit from having a diversity of backgrounds, experiences, and perspectives represented on the board.”

“We annually review our proxy voting and engagement policy to ensure alignment with global protocols and local laws and regulations, guided by our core principles of effective board oversight, disclosure, and shareholder protection and a singular focus on value creation,” a State Street spokesperson said in an emailed statement to ESG Dive Wednesday.

The company’s conclusion that its role is not to be “prescriptive” arose due to its recognition that several factors can influence board composition. State Street said it believes “a robust nominating and governance process is essential to achieving a board composition that is designed to facilitate effective, independent oversight of a company’s long-term strategy,” according to the summary document.

“We believe effective board oversight of a company’s long-term business strategy necessitates that diversity of backgrounds, experiences, and perspectives, which may include a range of characteristics such as skills, gender, race, ethnicity, and age,” the 2025 stewardship policy and summary noted. “By having a critical mass of diverse perspectives, boards can benefit from the potential for innovative ideas and more robust conversations about a company’s strategy.”

A version of the Fearless Girl webpage — captured by web archive Wayback Machine — previously touted State Street’s gender diversity approach and emphasized the increase in Russell 3000 companies who had at least one female director between 2017 and 2024, from 71% to 99%, according to MSCI Analytics.

The pullback on board diversity engagement guidelines aligns with changes made at BlackRock and Vanguard, the nation’s two-largest asset managers. BlackRock dropped a similar requirement for board slates to feature at least 30% women directors from its 2025 engagement policies, Barron’s reported last year, and Vanguard diluted its proxy voting guidelines on board diversity last month.

Vanguard’s U.S. proxy voting guidelines for the year excluded a line from prior guidance that company boards, “at a minimum, represent diversity of personal characteristics, inclusive of at least diversity in gender, race and ethnicity.”

Trump’s executive orders targeting federal and private sector DEI programs have sent ripples through industries, as companies look to comply. While a federal judge has placed a preliminary injunction on parts of the orders, it is not the only legal threat to financial institutions.

In the days following Trump’s inauguration, attorneys general from 10 states sent letters to major U.S. financial institutions threatening enforcement if their proxy policies like stated employment or board diversity quotas were found to be in violation of the law. BlackRock was included among the targets, but State Street and Vanguard were not among the initial firms probed.

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