My dad Vikram Gandhi leads a case at Harvard Business School about the economic value of investing in senior female leadership:
Conversation recorded September 6, 2017. Edited for length and clarity.
Brian Kenny: On March 7, 2017, the day before International Women’s Day, a statue was unveiled in New York’s financial district directly opposite the iconic “Charging Bull” that has become the de facto symbol of Wall Street. “Fearless Girl,” as the work was called, features a girl, hands on hips, chin up, confident in every way. At just 50 inches tall she courageously stares down the 11-foot-high “Charging Bull.” Within hours of its installation, “Fearless Girl” was trending on Twitter and Instagram as women of all ages posted selfies with this new icon of feminism. New York City Public Advocate Leticia James said, “’Fearless Girl’ stands as a powerful beacon showing women young and old that no dream is too big, and no ceiling is too high.”
Once it became widely known that “Fearless Girl” was commissioned by State Street Global Advisory Services (SSGA) to celebrate the first anniversary of their gender diversity index fund, critics mounted an effort to remove the statue, calling it an advertising stunt and questioning the firm’s commitment to feminism. So why would a financial services firm wade into such a controversial social issue in the first place? Today we’ll hear from Senior Lecturer Vikram Gandhi about his case “State Street–The Development and Growth of SHE.” I’m your host Brian Kenny, and you’re listening to Cold Call. (Editor’s note: The case is not currently available for download.)
Kenny: Vikram Gandhi teaches in the MBA and Executive Education programs at Harvard Business School, and he’s the founder of ASHA Impact, an impact investing platform. He also spent 23 years in investment banking, so I guess you know a little bit about investment banking as well. Welcome.
Gandhi: Thank you, Brian.
Kenny: I really enjoyed this case as a marketing person. I watched the unveiling of the statue with great interest. I was a big fan of it, but I understand the controversy around it, too. Can you set up the case for us. Who is the protagonist and what is on her mind?
Gandhi: The protagonist here is Sonya Park, who is a senior sales person, an executive in State Street Global Advisors, which is one of the divisions of State Street. She is based on the West Coast and covers large institutional clients. The other protagonist is Chris McKnett, who is the head of ESG Investing (Environmental, Social and Governance) for State Street. Essentially, they had been approached by one of their large pension plan clients in California that wanted them to create an ETF, an exchange-traded fund, or an index rather than an ETF based on that index.
It … had a filter in it, which essentially brought in companies that had more diverse leadership in terms of gender leadership. This was a demand that this client had. Sonya’s team then went about creating it. It was very complicated to create. This pension plan was the key investor in this ETF. The point, really, is how to expand the acceptability of this product with other institutional investors and perhaps retail investors. The whole case is really about that decision point … How do we market and expand it? Because ultimately, State Street is in the business of creating more assets under management.
Kenny: How did you find out about this case and what led you to write about it?
Gandhi: We are launching a new course at HBS, Investing for Impact. As a result, we have to create a lot of new teaching material because this course hasn’t been offered before and in fact the whole area of investing for impact is a relatively new area. We’ve tried to put together a variety of cases, which cover the whole gamut of investing. From large institutions to small private equity, from family offices as well as the whole spectrum of public market investing, private investing, and venture capital. State Street, in my investment banking days, was a large client of mine. Through some mutual connections I got to know about their ESG effort and got to know Chris McKnett. We got talking about the fact that having a case about a large financial institution catering to another large financial institution—the pension plan focused on a particular social issue—would be a very interesting case to write. They were very open to it, which I was thrilled about, and that’s how it came about.
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