The bull towers 11 feet tall at its shoulder. A staggering 7,100 pounds of shimmering bronze, it stands mid-charge, feet splayed across the sliver of park called Bowling Green at the gateway to New York’s financial district. The statue is the definitive symbol of Wall Street: powerful, masculine and ready to gore the competition. For years, most denizens of the Street hurried past it on their way to the towers of American finance. Then, unexpectedly, on March 8, 2017, a young girl in a sundress, also made of bronze, appeared in front of him. Hands placed on her hips, she seemed to stare him down. Suddenly the bull’s legs seemed to herald not so much a charge into battle as an out of control beast stopped in its tracks.
Fearless Girl was a branding play—advertising that blended politics with self-promotion. The bank that commissioned the statue, State Street Global Advisors, wanted to market an index fund it sold that prioritized companies with female leadership. SSGA installed Fearless Girl the night before International Women’s Day on March 8, 2017. Yet before much was known about its provenance, the statue was immediately hailed as a powerful feminist symbol. The Women’s March had just channeled the outrage that millions felt after Hillary Clinton’s loss to a man known for his boorish behavior towards women, and the #MeToo movement was about to shake up corporate America. On Wall Street, many hoped the statue’s bold statement would finally initiate a new era of diversity.
Last November, Fearless Girl was removed prior to taking up a new spot near the New York Stock Exchange. So it seems a good time to ask: Did a statue of a young girl really help change an industry and rebrand the company that commissioned her?
Fearless Girl was always intended to be a piece of commercial art; the advertising agency McCann New York designed the statue for SSGA, a massive but conservative financial firm. The reaction appears to have been greater than anyone involved expected. On Twitter, Fearless Girl generated more than 1 billion impressions in its first 12 hours and broke 4.6 billion impressions within 12 weeks. On Instagram, Fearless Girl sparked almost a quarter-million unique posts featuring the statue in three months. The statue cost an estimated $250,000, but generated free marketing worth at least $7.4 million, according to Adweek.
“McCann brought [the idea] to us first, and it was a cow,” says Sallie Krawcheck, cofounder of the fintech startup Ellevest. (Ellevest’s tagline: “Invest like a woman. Because money is power.”) Literally. Krawcheck, a veteran of several financial firms and one of Wall Street’s most high profile women, was not impressed by the idea of a fearless cow and sent the ad agency back to the drawing board. McCann returned with the Fearless Girl concept, an improvement; Krawcheck eventually passed due to costs. (McCann did not respond to multiple requests for comment.)
But the ad agency found a willing partner in SSGA. State Street Corporation, a holding company that includes SSGA, its asset management division, charts its origins back to Union Bank, which was founded in Boston in 1792, making it the second-oldest continually operating bank in the nation. Yet, while SSGA’s $2.51 trillion in AUM is hardly trivial, it’s only about a third of industry leader BlackRock’s assets. The bulk of State Street’s business is in the conservative world of custodial banking. State Street has $33.12 trillion under custody and provides bookkeeping and back-end support to 90 percent of the largest asset managers in the world, according to the Wall Street Journal. It’s lucrative but not headline-grabbing work.
With Fearless Girl, McCann provided SSGA a way to raise its profile and that of SHE, an exchange traded fund the company had recently launched to drive investment to companies with substantial female board representation. Simultaneously, State Street launched an activist campaign to pressure laggard companies to boost the number of women on their boards. This style of investing, called “gender lens investing,” is increasingly in vogue, and there’s evidence it can lead to better returns. A 2018 study by Morningstar, for instance, found that female fund managers aren’t just equal to male managers, they actually outperform men by almost 1 percent. Yet even as the number of U.S. mutual funds has surged from around 1,900 in 1990 to roughly 8,500 in 2017, the number of women running those funds has lagged, with men occupying 85 to 90 percent of the new portfolio manager positions. Most tellingly, a 2015 study by indexer MSCI found that companies with at least three women on their boards—considered to be a critical number to influence decision making—delivered a 10.1 percent return on equity compared to 7.4 percent for companies with male-dominated boards.
So State Street’s focus on women wasn’t just a moral issue: It made sense for the bottom line. The statue itself had a plaque at its base that simply said, “SHE,” not exactly a subtle nudge. As the statue was unveiled, State Street Global Advisors referenced the MSCI study and targeted a list of over 3,500 publicly traded companies, accounting for $30 trillion in market capitalization, in which it held positions, asking them to increase the number of women on their boards. “Today we are calling on companies to take concrete steps to increase gender diversity on their boards and have issued clear guidance to help them begin to take action,” State Street Corporation president and CEO Ron O’Hanley said in a statement at the time.
There was a carrot and stick quality to the SHE ETF and the Fearless Girl campaign. If a company did a good job in terms of female board representation, there was a possibility of inclusion in the ETF. If it did poorly, SSGA would open a dialogue with the company’s management about improving its numbers; if it failed, SSGA threatened to vote against chairs of nominating and governance committees. The world noticed and praised State Street. But beneath the admiration, there was an undercurrent of doubt.
State Street’s own board of directors had only reached its baseline for female representation in the Fearless Girl campaign—three female board members out of 12 total—in 2015. Shortly after the launch of SHE and Fearless Girl, Krawcheck questioned the company’s bona fides on LinkedIn, noting that its senior leadership team, as opposed to the board, was only 14 percent women “and both of them are in support roles. By my calculation, that is almost exactly average among financial services companies,” putting State Street “more [in] the moral middle ground than the high ground.” The irony, Krawcheck argued, was that “it appears that the company itself does not qualify for the product that the girl statue is promoting. Maybe they’ll send themselves a strongly worded letter.”
The lack of women seemed to extend into senior management. In 2018 SSGA’s UK unit issued a government-mandated report on its gender pay gap in the previous year. The report disclosed that only 22 percent of its employees at the senior vice president level and above were women. The numbers were only slightly better at the assistant vice president level, where 35 percent of employees were women. In the same report, the company acknowledged a pay gap between women and men of 11.8 percent and a bonus gap of 24 percent, which actually made it one of the better UK fund managers in terms of gender pay parity—but hardly put the firm in a position to criticize others.
In a routine review of government contractors, the Department of Labor audited State Street’s Boston headquarters in December 2012. It found troubling signs that the company had been systematically underpaying women and African Americans in senior management positions since at least 2010. The government officially informed State Street of its determination on March 31, 2017, just a little over three weeks after the placement of the Fearless Girl statue, but the public would not learn of the accusation until State Street settled the case in September of that year. State Street rejected the findings and admitted no wrongdoing. But the company did agree to pay $5 million to 305 female employees and 15 African American employees deemed to have been discriminated against.
“It’s a large settlement, particularly against one company,” says Ivy Kagan Bierman, a Time’s Up legal committee member and partner in the labor practice at Loeb & Loeb. But what’s most interesting, she says, is that “it also provides for the salary adjustment of all of these executive-level female and black employees.” State Street was also required to reform internal policies and procedures ranging from starting salaries, promotion decisions and salary increases to training availability, leave policies and steering certain employees into lower-paying positions, areas that “have a disproportionately greater impact on females and blacks,” according to Bierman. (State Street provided written answers to some questions for this story but otherwise declined to be interviewed. See their statements below.)
This tarnishes their brand and raises issues about their integrity.
The settlement was a bombshell. Some observers, such as Leslie Campisi, CMO at investment advisory firm Anthemis Group, spun the settlement to Adweek in positive terms, saying that “the gap between internal and external realities of businesses is not uncommon, and State Street is certainly not the first company…to face this challenge.” Many others were critical. “They snatched defeat from the jaws of victory, and it potentially could have been avoided,” Weiss Strategic Communications president Steven Weiss told the marketing magazine. “They knew five years ago about the Department of Labor audit, long before the debut of Fearless Girl, and they’ve known about the results since March 31, 2017. This tarnishes their brand and it raises some issues about their integrity.”
Not surprisingly, State Street rejected the idea that it had done anything wrong. Immediately after the settlement became public, the company issued a statement saying that it was “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.”
By December 2017, outgoing CEO Jay Hooley would tell Boston Globe columnist Shirley Leung that the negative press “doesn’t change anything” and that “if anything, it might embolden us even more.” SSGA senior vice president Lynn Blake added that the settlement “was incredibly frustrating” and that she had “never been more proud of what State Street has accomplished, not just through Fearless Girl but also through the initiatives within State Street. That’s all relatively new in the last five years—this focus on diversity and inclusion and having really concrete goals.”
In terms of changing the culture of Wall Street, State Street has declared the Fearless Girl campaign a win. In 2017, SSGA as a proxy voted against proposals at 512 companies due to their lack of board diversity and another 581 companies in the first half of 2018. The number of companies in the Russell 3000 without a female director fell from 24 percent to 16 percent during the same period, and more than 300 of the companies identified in the campaign have added a female director, although they have not necessarily reached State Street’s benchmark of three female directors.
Can this trend be attributed to State Street’s actions? It’s debatable. The firm’s calls for diversity, and the worldwide attention Fearless Girl received, may have had an impact. Or companies may have decided to heed the ample research on the benefits of diversity, or made changes in response to new legislation requiring female board representation for California-headquartered companies, among other regulatory developments.
It’s also hard to handicap the performance of the SHE ETF when compared to other gender lens funds, such as the Glenmede Women in Leadership U.S. Equity Portfolio or the Pax Ellevate Global Women’s Index Fund (Krawcheck is the chair of Pax Ellevate Management). According to the SHE ETF research team at SSGA, the fund is the lowest-cost of the three and “has the highest one-year performance of applicable funds.” But it’s not always an apples-to-apples comparison; SHE is concentrated in U.S. equities, while the Pax Ellevate fund (PXWIX) includes about 35 percent non-U.S. equities, for example.
What is clear is that SHE has not been particularly successful in terms of investing in companies with good gender diversity. In November 2018, a new tool developed by shareholder advocacy organization As You Sow to rate gender equality in funds scored the SHE ETF’s holdings at just 47 out of 100. That score, derived from data from Equileap, meant that the fund was only ranked 222 for gender diversity out of 540 large-cap funds, and other State Street funds that weren’t even intended to focus on gender actually outperformed it, rating as high as 61 out of 100, according to ImpactAlpha. Krawcheck’s PXWIX fund, by comparison, achieved 59 out of 100 and was the third-highest ranked fund out of 264 world large stock funds, putting it in the top 1 percent of similar funds for gender diversity.
They snatched defeat from the jaws of victory.
Meanwhile, tangible changes at State Street itself are hard to identify. When the firm first faced criticism over female representation in its leadership after the Fearless Girl campaign began—but before the settlement became public—State Street granted Fortune access to an ad hoc group of “leading women” in an attempt to show the company walking the new talk. Yet even in that context, State Street chief administrative officer Karen Keenan acknowledged that “Fearless Girl has raised expectations. I’m not quite sure 27 percent [women in leadership] is going to cut it.”
In SSGA’s 2018 report on its gender pay gap, the company highlighted its 4,000-member Professional Women’s Network and referenced “ambitious” diversity goals. But by the end of 2017, SSGA had failed to meet any of its three-year diversity goals at the associate vice president, vice president, managing director and senior vice president levels. Now SSGA’s new goals are to reach 44 percent women at the AVP level and 36 percent at the SVP level and above within three years. Actual 50/50 gender parity in senior management is not now a diversity benchmark at State Street.
None of that surprises Krawcheck, whose company aims to exploit other firms’ gender-based failings. Sitting in Ellevest’s Manhattan office, where she shares a desk in the bull pen with a youthful team of employees, she had harsh words for the financial industry. As Krawcheck sees it, “gender diversity has actually gone backwards since the financial crisis.” The financial industry “is viewed as the truest form of meritocracy. The cream rises to the top, and we’re just after the best deal and the best trade, and the highest risk-adjusted returns. And there’s so much research out there about how diversity of all kinds leads to lower risks and higher returns and great innovation. And yet you look around and you see a sea of white men.” Ellevest is still small, just 70 employees, but it is laser-focused on maintaining gender diversity and offering financial products that appeal to women.
“These publicity stunts backfire,” Krawcheck says. “We’re hearing from women, ‘Why would I want a company to manage my money if I don’t even want my daughter to work there?’”
Fearless Girl’s tenure at Bowling Green was fraught. She suffered abuse from angry finance bros, including one who pantomined sex with the statue in front of a crowd. A struggling artist, Alex Gardega, briefly installed a small papier-mâché statue of a pug that appeared to pee on her, telling the New York Post that Fearless Girl “has nothing to do with feminism, and it is disrespectful to the artist that made the bull.”
On December 10, 2018, Fearless Girl was moved to a new home at the monumental facade of the New York Stock Exchange. State Street said it hoped that “by moving her closer to the NYSE she will encourage more companies to take action.” No longer is she staring down the bellowing bull. Now she stares upwards, lost in a sea of selfie-snapping tourists and stressed-out stockbrokers.
Following the publication of our article on Fearless Girl, Worth received correspondence from State Street’s representative lamenting that we had not included their emailed responses verbatim. Worth felt that those responses, which came after several months of requests, were fairly summarized within the article, but we’re happy to print them here:
On SHE ETF:
State Street Global Advisors remains committed to the investment thesis that better gender diversity in organizations leads to better long-term financial results. We are proud of State Street Global Advisors’ Gender Diversity Index and the SHE ETF, which gives our clients and investors the ability to harness the power of female leadership in their investment strategies. One of our driving goals as an organization is to continue educating all investors on the role ESG strategies can play in portfolios, particularly on the importance of gender diversity.
On Fearless Girl:
We are very proud how Fearless Girl has sparked important conversations around the world and has served as an inspiration for other asset managers and asset owners as well. All told, since the installation of Fearless Girl in 2017, other asset managers and asset owners representing assets of $15T globally have joined State Street in making gender diversity a priority, and 301 of the companies we identified as having no women at all on their boards have added a female director, and another 28 have committed to doing so.
State Street unequivocally supports equal pay for equal work. The OFFCP audit conducted in 2012 doesn’t reflect the State Street of today, and we continue to prioritize increasing the diverse pipeline of talent at State Street.