State Street Corporation and the Department of Labor reached a settlement on October 6, whereby State Street Corporation agreed to pay $4.5 million in back pay and $500,000 in interest to a settlement fund for underpaid female executives. The financial services company State Street is best known for having funded the production and placement of the Fearless Girl statue.
The Fearless Girl was hailed as an icon of modern feminism when it first appeared, signaling that women were finally gaining ground in positions of authority. That answer was planned. This year, the statue was placed to compete with Arturo Di Modica’s Charging Bull statue in New York’s Bowling Green the day before International Women’s Day. It appeared to be a reaction to systemic misogyny, or if you prefer, to the Trump administration’s assault on women’s reproductive rights. In a time when threats against women were regularly reported in the news, it served as a hazy symbol of female resistance.
State Street Settles Discrimination Suit
State Street spent months refining the design using mood boards before commissioning Kristen Visbal, who has a long history in corporate art. The plaque on the statue reads: “Recognize the influence of women in leadership. She has a positive impact.” State Street’s NASDAQ ticker symbol is SHE. Fearless Girl wasn’t a favorite of everyone. For State Street, it doesn’t really matter whether it was criticized as corporate feminism or a phony marketing stunt. Fearless Girl, whether favorable or unfavorable, delivered State Street an estimated $7.4 million in advertising, according to Apex Marketing.
By settling with the Department of Labor, State Street can avoid admitting guilt. DOL investigators say that female executives were paid less in bonuses, base pay, and total compensation as compared to men in the same or similar roles. They also found evidence of pay discrimination against black employees of all genders. State Street of course disagrees with these findings – and per the terms of the settlement they’re free to do so – but they eventually decided that paying out approximately $5 million to end the potential PR crisis was well worth it. Commissioning Fearless Girl cost them only a fraction of that $5 million figure and it earned them far more. And neither of those costs nor benefits come close to the $64 million State Street paid out in 2016 to settle fraud charges related to “unwarranted commissions.”
Corporate philanthropy and sponsorship can do a lot of social good. In addition to sponsoring “public” art, State Street’s foundation offers grants to nonprofits working in education, job-readiness, college success, credentials, work experience and employment, and it prioritizes organizations working to end or reduce employment discrimination and inequality. It’s designed to dovetail with the firm’s diversity goals. State Street also founded the Boston Workforce Investment Network, a partner organization for Boston-area nonprofits working to “prepare youth for the workforce.”
State Street is a good corporate citizen and an important contributor to the areas in which it does business based solely on the basis of their corporate donations. However, the corporation and its humanitarian and community-building initiatives take on a very different appearance when wage discrimination and fraud are taken into account. To be honest, I find it darkly humorous that the organization that sponsored Fearless Girl settled a DOL discrimination case, but I also believe it serves as an important reminder of just how clever some businesses can be when it comes to corporate giving. Even when a company behaves badly, a community may be unable to afford to sever ties because they have contributed excessively and become indispensable.
When we talk about aligning corporate giving with your organization’s values, it shouldn’t just mean finding initiatives that fit, in some way, with your corporate brand: giving to mental health organizations because you want your company to be associated with fostering relationships; supporting marathons and other sporting events because you want to appear active; launching a diversity hiring initiative to match your support of diversity hiring nonprofits. Your charitable activities shouldn’t serve as a defense. They ought to serve as a guide for your internal behavior and a representation of the kind of business you wish to create.