State Street, mega-financial firm behind diversity statue, pays $5 million to settle federal gender discrimination charges.
By Eve Tahmincioglu
It was a gender-equity phenomenon: A statue of a young girl staring down the powerful Wall Street bull in the heart of Manhattan’s financial district.
State Street Global Advisors (SSGA) erected the bronze statue earlier this year with a message to get more women directors in the nation’s boardrooms. The statue took on a life of its own, becoming a global symbol of female empowerment. Women, including little girls and grandmothers, lined up to take a photo with the “Fearless Girl.”
Now, it turns out State Street’s female employees may need to erect the statue in their own workplaces.
State Street Corp. agreed to pay the government $5 million for alleged gender pay discrimination dating back to 2010, according to a review by the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).
“State Street paid females employed in SVP, MD, and VP positions less per year than similarly situated male employees.”
The agency also asserts that, since 2010, the company “paid black employees employed in the VP positions less per year than similarly situated whites.”
State Street denies both charges but agreed to pay the fine.
When a spokesman for the company, Andrew Hopkins, was asked how a company pushing such diversity efforts could potentially be discriminating against women, he emailed this statement:
“State Street is committed to equal pay practices and evaluates on an ongoing basis our internal processes to be sure our compensation, hiring and promotions programs are nondiscriminatory. While we disagreed with the OFCCP’s analysis and findings, which are based on 2010 and 2011 data in one State Street building, we have cooperated fully with them, and made a decision to bring this six-year-old matter to resolution and move forward.”
Unfortunately, moving forward may be hard for women at companies beyond the State Street's workforce given broader actions by the financial firm.
The Guardian reported Monday that based on a review of Securities and Exchange Commission documents, the firm "was quietly and consistently voting down gender equality proposals at some of the country’s largest corporations."
- A shareholder proposal calling for Alphabet, Google’s parent company, to disclose any pay disparities between men and women, State Street voted no. On the same proposal before Wells Fargo, State Street voted no.
- State Street rejected shareholder proposals to tackle gender inequality at least a dozen times in 2017 alone – including at Aetna, American Express, Bank of America, Express Scripts, JP Morgan Chase and MasterCard.
Despite the company's seemingly contradictory actions, the message behind the “Fearless Girl” movement, and efforts such as SSGA’s push to get more gender diversity on boards, are sorely needed.
A recent report predicted gender parity won’t exist in the boardroom until 2032, six years later than predicted in executive search firm Heidrick & Struggles’ last report.
Another report, the Equilar Gender Diversity Index (GDI) — a quarterly analysis tracking the prevalence of women on public company boards of directors — found some movement. As of June 30, the percentage of women on Russell 3000 boards increased slightly to 16.2%, up from 15.9% at the end of the first quarter.
"The limited progress made in this quarter’s Gender Diversity Index highlights the importance of remaining vigilant relative to adding women to boards," says Blair Jones, a managing partner with Semler Brossy Consulting Group and a member of the Equilar Diversity Network Advisory Council. "What gets measured and talked about gets done, so boards need to keep the conversation alive."
SSGA did more than just erect a statue. The firm voted against the reelection of members of board committees tasked with recruiting new board members at 400 companies in the United States and beyond.
The investment powerhouse had plans to take the “Fearless Girl” campaign global.
Rahki Kumar, managing directors of Environmental, Social and Governance Investments and Asset Stewardship at SSGA, recently told Directors & Boards, “I think it is a pop phenomenon that strikes a chord with people.”