State Street Global Advisors (SSGA), the U.S.-based fund manager representing $4.1 trillion in assets, updated its proxy voting policy relating to diversity, director commitments, and climate change.

Board diversity
Going forward, SSGA expects the boards of all U.S.-listed companies to have at least one female board member. If a company fails to meet this expectation the fund manager may vote against the nominating committee chair or the “board leader.”

If a company fails to meet this target for three consecutive years, SSGA may vote against all incumbent members of the nominating committee, a policy that previously only applied to Russell 3000 and TSX-listed companies.

SSGA may withhold support from the nominating committee chair where a company in the S&P 500 does not feature at least one director from an underrepresented community on its board, the fund manager said.

Nominating committee chairs at S&P 500 companies may also be opposed where companies do not disclose their EEO-1 reports, a U.S. corporate form detailing workforce composition.

In the U.K., SSGA may now withhold support from FTSE 100 nominating committee chairs where companies do not feature at least one ethnically or racially diverse director, it said.

Director commitments
In the U.S., U.K., and Europe, SSGA will consider named executive officers (NEO) to be overboarded if they sit on more than two outside public boards.

Non-executive board chairs and lead independent directors will be considered overboarded if they sit on more than three outside public boards, while executive directors will be expected to hold no more than four outside public board seats.

In cases where directors are considered to be overboarded, the fund manager may refrain from taking voting action if a company discloses its director commitment policy.

This policy must include a numerical limit on public company board seats a director can serve on, affirmation that all directors are currently compliant with the company policy, and a description of an annual policy review process to evaluate outside director time commitments, SSGA said.

Climate change
SSGA may vote against independent “board leaders” at S&P 500, FTSE 350, and S&P/TSX-listed companies that fail to provide sufficient disclosure in accordance with recommendations of the Task Force for Climate-related Financial Disclosure (TCFD).

These recommendations include reporting on how the board oversees climate-related risks and opportunities, Scope 1 and 2 greenhouse gas (GHG) emissions, and related emissions reduction targets.

SSGA’s proxy voting policy can be accessed on its profile.