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State Street Global Advisors (SSGA)

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement



LEA 01. Description of approach to engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Indicate what your engagement policy covers:

01.3. Attach or provide a URL to your engagement policy. [Optional]

01.4. Provide a brief overview of your organization’s approach to engagement

Please see in LEA 01.5

01.5. Additional information [optional]

SSGA’s approach towards proxy voting and issuer engagement is premised on the belief that companies that adopt robust and progressive governance and sustainability practices should be better positioned to generate long-term value and manage risk.

As near perpetual holders of the constituents of the world’s primary indices, the informed exercise of voting rights coupled with targeted and value-driven engagement is the most effective mechanism of creating value for our clients.

All voting and engagement activities are centralized within the Asset Stewardship Team irrespective of investment strategy or geographic region. By consolidating and harmonizing our voting decisions and engagement, we leverage the full power of our institutional discretionary holdings and exert greater influence with management and boards.

In conducting our voting and engagement activities, SSGA evaluates the various factors that play into the corporate governance framework of a country, including macroeconomic conditions, political environment, quality of regulatory oversight, enforcement of shareholder rights and the effectiveness of the judiciary. SSGA complements its company specific dialogue with targeted engagement with regulators and government agencies to address systemic market-wide concerns.

We have a dedicated team of corporate governance and ESG (environmental, social, and governance) professionals, who help us carry out our duties as a responsible investor. These duties include developing and managing SSGA’s proxy voting and engagement guidelines, engaging with companies, analyzing corporate governance issues on a case-by-case basis at the company level, and exercising our voting rights, all to maximize shareholder value.

The activities of the Asset Stewardship Team are directly overseen by SSGA’s Investment Committee (IC). The IC is responsible for approving the annual stewardship strategy, engagement priorities and proxy voting guidelines, and monitoring the delivery of objectives. Furthermore, the SSGA Global Proxy Review Committee (SSGA PRC), a dedicated sub-committee of the IC, provides day-to-day oversight of the Asset Stewardship Team, including approving departures from voting guidelines and management of conflicts of interest.

The Asset Stewardship Team is supported by several specialists within SSGA in executing their stewardship responsibilities. These include members of SSGA’s proxy operations team who are responsible for managing fund set up, vote execution, vote reconciliation, share recall and class action lawsuits, and members of SSGA’s client reporting and compliance teams.

SSGA’s engagement activities are driven exclusively by the goal of maximizing and protecting the long-term value of our clients’ assets. As a long-term shareholder with substantial holdings, SSGA believes it is important to establish a relationship and have a direct communication channel with independent directors in our investee companies.  Therefore, as part of our engagement process, we prefer to meet with the independent chairperson/ lead independent director and/or representative of key board committees.   We believe such meetings help us assess the quality and effectiveness of the board, the extent of oversight of management, and to understand the board’s perspectives on key issues such as strategy, risk, capital allocation, and compensation. It also allows us to escalate matters to the board’s attention if management has been unresponsive to issues discussed during prior engagements.

SSGA also seeks to meet with management at reasonable intervals to receive updates on long-term strategy, execution, financial and operational performance, and significant matters that may affect the future prospects of the company. However, discussions pertaining to interim financial results or other short-term considerations will not be considered a priority.

Where appropriate, SSGA also participates in collaborative engagement activities with multiple shareholders to communicate with company representatives about common concerns.

In conducting our engagement, SSGA also evaluates the various factors that play into the corporate governance framework of a country, including but not limited to, the macroeconomic conditions and broader political system in a country, quality of regulatory oversight, enforcement of property and shareholder rights and the independence of the judiciary. SSGA understands that regulatory requirements and investor expectations relating to governance practices and engagement activities differ from country-to-country. As a result, SSGA engages with issuers, regulators, or both, depending on the market. Also, SSGA is a member of various investor associations that seek to address broader corporate governance related policy at the country level as well as issuer specific concerns at a company level.

To help mitigate company-specific risk, the team may collaborate with members of SSGA active investment teams to engage with companies on corporate governance issues and address any specific concerns, or to get more information regarding shareholder items that are to be voted on at upcoming shareholder meetings. Outside of proxy voting season, SSGA conducts issuer specific engagement with companies covering various corporate governance and sustainability related risks.

SSGA’s believes in-person meetings help us in establishing mutual understanding and trust with the boards and management teams of our investee companies.  However, once we have developed such relationships, SSGA’s preferred method for update meetings is via conference calls as we believe this is cost effective for our clients and investee companies. 

LEA 02. Reasoning for interaction on ESG issues (Not Completed)


Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

03.3. Additional information. [Optional]

SSGA holds over 9,000 listed equities across its global portfolios. Therefore, the success of our engagement strategy is built upon our ability to prioritize and allocate resources to focus on companies and issues that potentially will have the greatest impact on shareholder returns. To support this process SSGA has developed proprietary in-house screening tools to help identify companies for active engagement based upon various financial and ESG indicators.

Factors considered in developing the target list include:

  • Size of absolute and relative holdings;
  • Companies with poor long-term financial performance within their sector;
  • Companies identified through ESG screening tools as lagging market and industry standards;
  • Outstanding concerns from prior engagement; and
  • Priority themes and sectors based on an assessment of emerging ESG risks.


The intensity and type of engagement with a company is determined by SSGA’s relative and absolute holdings in that company.  In addition, we also build in geographic diversity in our engagement efforts to reflect the level of economic exposure to various markets.  Finally, we also consider the engagement culture in a market or geographic region when developing our engagement target list and approach.

In addition to ESG screens, on an annual basis SSGA develops an Annual Stewardship Program based on a series of strategic priorities that are designed to enhance the quality and define the scope of our stewardship activities for the year.  Identifying our stewardship priorities allows us to plan and actively focus our engagement efforts on sector-specific or thematic ESG issues that are important to our clients.  We develop our priorities based on several factors including client feedback received in the past year, emerging ESG trends, and developing macroeconomic conditions and regulation. 

In the Annual Stewardship Program, we also identify two or three ‘deep dive’ sectors a year.  This allows SSGA to proactively monitor and engage with companies on matters such as long-term strategy, performance and ESG issues.  Moreover, reviewing our global holdings within a sector gives SSGA the ability to identify business and ESG trends impacting all of our holdings, which strengthens our ability to provide inputs to the board and the management when they seek feedback or direction from large institutional investors.  The insights we gain from our sector engagements are shared with clients through presentations and are reported in our Annual Stewardship Report. 

LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

04.1. Indicate if you define specific objectives for your engagement activities.

04.2. Indicate if you monitor the actions that companies take following your engagements.

04.3. Indicate whether your organisation defines milestones and goals for engagement activities carried out by internal staff.

04.4. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

04.5. Additional information. [Optional]

The following methods represent how SSGA defines engagement methods:


SSGA uses screening tools designed to capture a mix of company specific data including governance and sustainability profiles to help us focus our voting and engagement activity. SSGA will actively seek direct dialogue with the board and management of companies we have identified through our screening processes. Such engagements may lead to further monitoring to ensure the company improves its governance or sustainability practices. In these cases, the engagement process represents the most meaningful opportunity for SSGA to protect long-term shareholder value from excessive risk due to poor governance and sustainability practices. On average 65-75% of annual company engagements are classified as active.


Members of SSGA’s Active Stewardship Team also engage with companies that wish to solicit our votes or seek feedback on corporate governance and sustainability issues as shareholders. These meetings are typically initiated by the company, who drive the meeting agenda.  On average 35-25% of annual company engagements are classified as reactive.

Measurement of Engagement:

Assessing the effectiveness of our issuer engagement process is often difficult. To limit the subjectivity of measuring our success we actively seek issuer feedback and monitor the actions issuers take post-engagement to identify tangible changes. By doing so, we are able to establish indicators to gauge how issuers respond to our concerns and to what degree these responses satisfy our requests. It is also important to note that successful engagement activity can be measured over differing time periods depending on the facts and circumstances involved. Engagements can last as short as a single meeting or span multiple years.

SSGA also tracks the impact of its proxy votes by reviewing changing trends in market practices on specific corporate governance or sustainability-related issues that are targeted for change through voting action.  Illustrative examples of successful engagement and voting actions are reported to clients on an annual basis in our Annual Stewardship Report. 

Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.2. Describe the criteria used to identify and prioritise collaborative engagements

other description

          As a follow-up from a voting decision

05.3. Additional information [Optional]

The size of SSGA’s global assets and reputation in the market provides the Asset Stewardship Team with access to the management and boards of investee companies. Therefore, the majority of corporate engagements are carried out on a one-to-one basis behind closed doors, as we feel this is critical to building trust and establishing constructive long-term relationships with companies. Nevertheless, SSGA collaborates with like-minded investors under certain circumstances. Factors that are considered when determining the merits of collaborative action include:

  • Agreement amongst investors on core areas of concern and potential solutions;
  • Systemic market-wide concerns and regulatory environment;
  • Responsiveness of management and boards to prior individual engagements;
  • Concentrated ownership within the share register; and,
  • Market culture and acceptance of shareholder engagement.

To facilitate this process, SSGA are members of national and global investor bodies including the UK Investment Association, The Investor Forum, International Corporate Governance Network, Asian Corporate Governance Association, the Council of Institutional Investors and the United Nations Principles for Responsible Investment. In addition, through our membership in various industry networks, as well as our contact with corporate pension plans, public funds and unions, we are able to communicate extensively with other stakeholders regarding events and issues relevant to individual corporations, general industry trends and current shareholder concerns.

Example of Collaborative Initiative

USA: Signatory to the Commonsense Principles of Corporate Governance

In July 2016, SSGA joined a group of US investors and corporations and became a signatory to the Commonsense Principles of Corporate Governance that were developed by CEOs from multiple firms.  This was the first CEO-led initiative to develop a set of Principles for US companies.  Details of this initiative can be found

UK: Active Participant/Member in Meetings of the Investment Managers Association and the UK Corporate Governance Forum

LEA 06. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take following your collaborative engagements.

06.3. Indicate whether your organisation defines milestones and goals related to engagement activities carried out via collaborations.

06.4. Indicate if you do any of the following to monitor and evaluate the progress of your collaborative engagement activities.

06.5. Additional information. [Optional]

General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

09.2. Additional information. [Optional]

SSGA's Asset Stewardship Team works closely with representatives from SSGA’s investment teams includings members from our Passive Equity, Active Fundamental Equity Team, and Fixed Income teams . Together we conduct joint engagements with companies and, from time-to-time, the Asset Stewardship Team provides insights gleaned from collaborative and individual engagements to portfolio managers and to members on SSGA’s Investment Committee, a group that oversees all investment decisions in the organization.

Furthermore, the Asset Stewardship Team shares insights it gain through engagement and proxy voting  on macro and industry trends with members of SSGA’s investment teams. This includes but is not limited to topics such as the governance trends in emerging markets.

In 2016, the Asset Stewardship Team co-published a paper Navigating Conglomerate Governance: Through the Lens of the Korean Chaebol with a portfolio manager from the active fundamental team.  This paper highlight the corporate governance challenges of investing in Korean Chaebols and provides guidance on evaluating conglomerate governance. 

LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of engagements your organisation participates in.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

10.2. Additional information. [OPTIONAL]

SSGA's Asset Stewardship Team maintains a comprehensive database of all engagements conducted during the year. This database contains detailed notes on the engagements, key issues that were discussed in the engagements and issues identified during the engagement, and any follow-up if required. Information captured in the database goes back a number of years and provides a historical perspective of engagement with a particular company, including our vote history and reasons for vote decisions on key ESG issues.

Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort (Private)

LEA 12. Engagement methods (Private)

LEA 13. Engagements on E, S and/or G issues (Not Applicable)

LEA 14. Companies changing practices / behaviour following engagement (Private)

LEA 15. Examples of ESG engagements (Private)