On Feb. 28, State Street Global Advisors (SSGA) released its 2025 proxy voting and engagement policies.¹ Because the document discusses SSGA’s approach to engaging with issuers, the revisions were heavily influenced by recent SEC guidance on Schedule 13D-G beneficial ownership reporting.² The new guidance lays out when engagement discussions by a holder of over 5% of the stock constitute “influencing control” of the company and thereby require reporting on a long-form Schedule D.

SSGA explained that rather than incorporate specific potential voting outcomes, its 2025 policy document sets forth what it believes are best practices for good governance at its portfolio companies and includes its viewpoints on what can protect and promote the long-term economic value of its clients’ investments.³

The 2025 guidelines essentially purge all explicit references as to when SSGA will vote against management proposals–director elections, compensation plans, mergers and acquisitions, auditor ratification, articles amendments and anti-takeover provisions—and replace wording throughout such as “we encourage” and “we support” with “we believe.” However, SSGA has largely maintained its transparency on when it will support or oppose shareholder advisory proposals. The upshot is that it will be harder for issuers to forecast how SSGA will cast its votes on proxy ballot items.

One notable change is an overhaul of SSGA’s board composition policy. It has removed its diversity requirement that there be a specific number or percentage of women and underrepresented groups on the board. SSGA has also done away with numerical limits for an individual director’s board memberships.

Key revisions to SSGA’s 2025 voting and engagement policies are discussed below.

Board Oversight

• Majority independent board: SSGA has added a new section codifying its view that a sufficiently independent board is key to effectively monitor management, maintain appropriate governance practices, and perform oversight functions to protect shareholder interests.
• Separation of Chair/CEO: SSGA believes boards are best positioned to choose their appropriate leadership structure. It has deleted its policy of voting against the chair or members of the nominating committee of S&P 500 and STOXX Europe 600 companies that have a combined Chair/CEO and no lead director.
• Refreshment and tenure: SSGA believes that a company’s average board tenure should generally align with the length of the business cycle of its industry. In assessing excessive board tenure, it will continue to examine the preponderance of long-tenured directors, board refreshment practices and classified board structures. It has deleted its policy of voting against directors if average board tenure is excessive. It has also removed its policy of voting against age and term limits.
• Director time commitments: SSGA believes the nominating committee is best suited to determine appropriate time commitments for directors. It will continue to examine if a company publicly discloses a director overboarding policy and the annual review process undertaken to evaluate director time commitments. SSGA has eliminated its policy of voting against the nominating committee chair of S&P 500 firms that do not disclose an overboarding policy. It has also removed its numerical board seat limits for non-S&P 500 firms.
• Board composition: SSGA has deleted its discussion of board diversity and its policy of voting against the chair or members of the nominating committee chair or the board leader if the company does not have at least one female director (or 30% gender diversity if in the Russell 3000 or other major index) and at least one director from an underrepresented group (if in the S&P 500 or FTSE 100). SSGA believes nominating committees are best placed for determining the most effective board composition to ensure there is a diverse range of backgrounds, experiences and perspectives, which may include skill sets, gender, race, ethnicity and age.

Board Accountability

• Oversight of strategy and risk: SSGA has deleted its policy of voting against responsible directors for a failure to demonstrate effective oversight in the areas of governance, climate risk management and human capital management. SSGA is maintaining the existing factors it considers when evaluating effective board oversight of risks and opportunities, which include the company’s long-term strategy, the oversight process, management accountability, and the disclosure of material information.
• Compliance with corporate governance principles: SSGA added a new section indicating that it will review governance practices at companies in selected indices for their adherence to market governance codes and/or stewardship principles.
• Proxy contests: When evaluating dissident nominees, SSGA has included as an additional factor the expertise of board members with respect to the company’s industry and strategy.
• Compensation and remuneration: SSGA has retained its discussion of the factors it considers when evaluating remuneration reports. It has deleted its policy of opposing remuneration reports where pay seems misaligned with shareholders’ interests, as well as its consideration of executive compensation practices when re-electing compensation committee members.
• Board meeting attendance: SSGA expects directors to attend at least 75% of their board meetings or provide an appropriate explanation for missing meetings. The policy no longer states that SSGA will vote against directors with poor attendance.
• Board responsiveness to advisory votes: SSGA has eliminated its discussion of board responsiveness to shareholder advisory votes. Previously, SSGA would vote against directors who were unresponsive to a majority-supported shareholder proposal in the previous year. It would also vote against the chair or members of the compensation committee if the company was unresponsive to shareholder concerns about compensation practices or if there was a high level of shareholder dissent against a management proposal on executive pay.

Disclosure

• Board composition: SSGA has removed its discussion of board composition disclosure, including its policy of voting against the chair of the nominating committee at Russell 1000 or FTSE 350 companies that do not disclose the gender, racial and ethnic composition of the board.
• Financial statements: SSGA has deleted its policy of voting against approval of a company’s financial statements if they have not been disclosed or audited, if the auditor opinion is qualified/adverse or includes a disclaimer, or if the auditor opinion is not disclosed.
• Sustainability and climate-related disclosures: SSGA has added a new section indicating that it looks to companies to provide disclosure on sustainability-related risks and opportunities relevant to their businesses in line with applicable local regulatory requirements and any voluntary standards and frameworks adopted by the company. It has removed its expectation that companies follow the Taskforce on Climate-related Financial Disclosures (TCFD) framework for climate-related disclosures. SSGA has also deleted its policy of voting against directors of firms in major indices, such as the S&P 500, if they fail to provide sufficient disclosure regarding board oversight of climate-related risks and opportunities, Scope 1 and 2 emissions, and climate-related targets, in accordance with the TFCD.
• Board and workforce demographics: SSGA expects companies to disclose the composition of the board and workforce. It has removed its policy of voting against the compensation committee chair of S&P 500 companies that do not disclose their EEO-1 reports.

Shareholder Protection

• Reorganizations, mergers, and acquisitions: SSGA has retained the factors it considers in evaluating mergers and structural reorganizations. It no longer singles out the factors that may trigger a vote against the transaction.

Shareholder Rights

• Virtual/hybrid shareholder meetings: SSGA has deleted its policy of voting against the nominating committee chair if the company does not adhere to certain virtual meeting best practices.
• Article amendments: SSGA has removed all references to how it casts votes with respect to unilaterally adopted/amended bylaws, supermajority voting provisions, and board size changes. It now states:
  • Bylaw amendments that may negatively impact shareholder rights should be put to a shareholder vote.
  • A majority voting standard is generally appropriate.
  • Companies should have a fixed board size or designate a range for the board size.
• Anti-takeover issues: SSGA has eliminated details related to how it may vote on poison pills and other anti-takeover measures. It now states that shareholders should have the right to vote on reasonable offers.
• Accounting and audit-related issues: SSGA has deleted its policy of opposing auditor ratification or the audit committee members if it has concerns with audit-related issues or if non-audit fees exceed 50% of audit fees. It has also deleted its consideration of auditor tenure when evaluating the audit process.

Shareholder Proposals

SSGA has retained its discussion regarding when it will support shareholder proposals, which include:

• If the request is focused on enhanced disclosure of the company’s governance and/or risk oversight,
• If the adoption of the request would protect the interests of SSGA clients as minority shareholders, or
• If the request satisfies SSGA’s assessment criteria for common disclosure topics.

In evaluating the shareholder proposal against SSGA’s assessment criteria, SSGA now states that it will review the company’s relevant disclosures against industry and market practice, including peer disclosures, relevant frameworks, and relevant industry guidance.

Other than companies receiving shareholder proposals related to political contributions, lobbying or trade association alignment, SSGA will no longer apply its disclosure assessment criteria to all companies or companies in certain sectors (such as oil and gas). Instead, its disclosure requirements will be based on whether the company has identified the issue underlying the shareholder proposal—climate; methane emissions; nature; human capital; diversity, equity and inclusion (DEI); pay equity; civil rights or human rights—as a material risk or opportunity to its business.

Additional changes to SSGA’s disclosure assessments include the following:

• Climate disclosure criteria: SSGA has deleted its expectation that all companies, including those in carbon intensive industries, provide public disclosures in line with the TCFD framework. In the case of high emitters, SSGA will continue to consider whether the company discloses any scenario planning, its plans to achieve any stated climate-related targets and timelines, and its incorporation of relevant climate considerations into its financial planning and/or capital allocation decisions. It no longer expects them to disclose Scope 1, 2 and relevant categories of Scope 3 emissions.
• Say-on-climate criteria: This section has been deleted.
• Human capital management disclosure criteria: SSGA is no longer including company efforts to advance DEI as a disclosure requirement. Instead, it expects disclosure of the board’s role in overseeing workforce demographics efforts.
• DEI disclosure criteria: SSGA has removed references to any company DEI-related goals and measures of board and workforce diversity based on gender, race, and ethnicity. Instead, its disclosure criteria include the demographics of the company’s board and global employee base (where permitted) and the extent that a diversity of skills, backgrounds, experiences, and perspectives factors into the board’s nominating process.

Engagement

SSGA now states that it does not seek to change or influence control of any portfolio company through engagement. It has also removed its discussion of using its “R-Factor” scoring system, which is based on the Sustainability Accounting Standards Board (SASB) Materiality Framework, to prioritize engagements. SSGA has additionally revised its criteria for engaging with investors who are running proxy contests, putting forth vote-no campaigns, or submitting shareholder proposals. Previously, SSGA limited discussions with a proponent to one, unless a follow-up was needed, and it welcomed the opportunity to review any proponent materials sent in advance of the discussion. SSGA now states that it will conduct such discussions at its discretion, which will be limited to investors who have filed necessary documentation with regulators.

¹ See SSGA’s executive summary and full 2025 voting and engagement guidelines at https://www.ssga.com/library-content/assets/pdf/global/asset-stewardship/summary-material-changes-ssga-proxy-voting-and-engagement.pdf and https://www.ssga.com/library-content/assets/pdf/global/asset-stewardship/proxy-voting-and-engagement-policy.pdf.

²See the SEC’s new Compliance and Disclosure Interpretations at https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/exchange-act-sections-13d-13g-regulation-13d-g-beneficial-ownership-reporting#103.11.

³See SSGA’s “Introduction to the 2025 Proxy Season” at https://www.ssga.com/library-content/assets/pdf/global/asset-stewardship/introduction-to-2025-proxy-season.pdf.