Stewardship in the Context of Geopolitical Risk

Benjamin Colton is Global Head of Asset Stewardship, Voting & Engagement, Holly Fetter is Vice President of Asset Stewardship, and Ryan Nowicki is Assistant Vice President of Asset Stewardship at State Street Global Advisors. This post is based on their SSgA memorandum.

As asset stewards, we are aware of the financial risks associated with unexpected conflict between or among nations, and, where appropriate, we may seek to mitigate relevant risks through engagements and proxy voting. On a case-by-case basis, the Asset Stewardship team will assess whether a situation constitutes a conflict that is material to our portfolio, considering indicators including whether the conflict:

  • Causes a material market disruption;
  • Disrupts the information flow such that we cannot make informed decisions;
  • Introduces reputational or headline risk to our clients; and/or
  • Results in government sanctions.

We view impacted companies as those with exposure to conflict-affected areas, meaning that they may, for example:

  • Be domiciled [1] in markets involved in conflict;
  • Generate significant revenue from local customers;
  • Employ local workforces;
  • Engage in local joint ventures and partnerships; and/or
  • Operate subsidiaries in the region.

We will implement the following framework in such instances in an effort to protect shareholder value.

Our Expectations for Impacted Companies

We expect our holdings that may be impacted by global conflicts to:

  • Manage and mitigate risks related to operating in impacted markets, which may include financial, sanctions, regulatory, and/or reputational risks, among others;
  • Strengthen board oversight of these efforts; and
  • Describe these efforts in public disclosures.

In addition to these conflict-specific expectations, our existing Guidance on Human Rights Disclosures & Practices  applies to all companies in our portfolio.


Leveraging the criteria outlined above, we may request engagements with a targeted list of holdings that have exposure to impacted markets. Our objective will be to understand how companies are disclosing and managing relevant sanctions, regulatory, reputational, human rights-related, and financial risks (e.g., disruptions to operations, supply chain, human capital management strategies), and to encourage alignment with our expectations.

Proxy Voting

We will monitor impacted companies and consider using our proxy vote to hold boards accountable for insufficient oversight of relevant risks, in line with our existing expectations for directors.

The Asset Stewardship Team will work closely with State Street’s Legal and Compliance teams to ensure that any proxy voting and other stewardship activities in impacted markets are permissible and not prohibited by any relevant global sanctions and regulations. If voting is permissible in a given market, we will decide how to vote at these shareholder meetings. Where appropriate, we may elect to submit “Do Not Vote” instructions for all meetings in an impacted market where we do not have access to sufficient information or to protect our clients from reputational risk.


This framework is an example of the Asset Stewardship Team’s commitment to proactively managing risks to our portfolio in order to enhance long-term value for our clients.


1 As defined by either the market, country of risk or country of incorporation from our proxy voting and research providers.(go back)

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