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State Street Global Advisors Limited

STATEMENT OF COMPLIANCE WITH S172(1) OF THE COMPANIES ACT 2006


The following disclosure describes how the directors have had regard to the matters set out in section 172(1) (a) to (f) and forms the directors’ statement required under section 414CZA of The Companies Act 2006

Clients

The Company’s principal activities are the provision of financial and investment advice, and fund management to its clients. The Company needs to engage with clients to ensure continued provision of relevant services and products, supporting the long-term success of the organisation.

The Company holds various client events and conferences covering a range of topics and through the normal course of business the Company has regular client engagement, having meetings with clients as appropriate. As a result of the disruption caused by the COVID-19, pandemic meetings have been moved to online / virtual environments and the level of client engagement has not been disrupted. See “How stakeholder interests have influenced decision making”.

During the period one of the key areas of focus have been the ability of the Company to support clients post Brexit, and whilst some client contracts had previously novated to SSGA Ireland Ltd others remained with the company given the change in Brexit timings.

The Company engages with clients with regards to existing and new capabilities and discussions have included environmental, social and governance (“ESG”) investing, fixed income and liability driven investment resulting in the further development of our ESG capabilities, the launch of ESG funds and development of cashflow driven investing funds.

Shareholder

As a wholly-owned subsidiary it is important for SSGAL to maintain alignment with the parent’s strategy whilst maintaining appropriate governance at the Company level.

The Company has engaged with the shareholder through Group committees and regular communication and reporting, including reporting to the parent of the Company’s capital position and material items.

Engagement involved plans for the distribution of surplus cash and capital resulting in the payment of a dividend distribution, see “How stakeholder interests have influenced decision making”.

Workforce

The Company is reliant on its workforce for the provision of services to clients and the continued engagement of the workforce is essential to meet changing client demands, regulatory requirements and effective risk management.

Senior management and executive directors hold regular townhalls, additionally staff are invited to skip level meetings with senior management allowing a two way dialogue. In the year these meetings continued online and were supplemented by regular all staff calls to provide COVID-19 updates.

The Company also participates in the global State Street employee engagement survey and in 2019 a full employee engagement survey was completed covering areas including engagement, alignment and cultural traits. The results of the survey were received towards the end of 2019 and management have met to review and actions have been proposed and presented to the Board. Several snapshot surveys have also been used in the year to collect employee feedback on working from home, the workplace of the future and to gain insight on current levels of engagement, see “How stakeholder interests have influenced decision making”.
The Board is to consider wider culture and conduct responsibilities, and is working with senior management to determine how these are fulfilled.

Regulator

The Board recognises the importance of open and continuous dialogue with its regulator, the FCA. The regulator undertakes routine Supervisory Review and Evaluation Process (SREP) visits as well as having regular updates with management. Management engages with the regulator on material issues as they arise.

In the period, interactions with the regulator have been focussed on operational resilience, Brexit preparedness, sustainability and Covid-19, see “How stakeholder interests have influenced decision making”.
The Board agreed a number of actions to address the points raised by the regulator in the firm evaluation letter, and receives regular progress updates from management.

Group companies

As part of a wider group, the Company is both reliant on the group for provision of certain services and is a provider of services to other group companies. The Company has in place a Board-approved outsourced arrangement oversight framework and the Board receives updates from relevant group functions at board meetings, and results from performance reviews.

Areas covered by the Board in the period have been business continuity planning, IT and cybersecurity and outsourcing arrangements. There has been increased scrutiny of IT and cybersecurity, resulting in more focussed updates from Group IT on issues, as they relate to the Company, and their resolution.

Suppliers

The State Street Group is committed to managing the wider social, environmental and economic impacts of its operations. The Board recognises its own obligations and challenges the Company’s own ESG position, given its focus on ESG initiatives for clients.

Community and Environment

The State Street Group is committed to managing the wider social, environmental and economic impacts of its operations. The Board recognises its own obligations, and received training on Modern Slavery and adopted related policies. The Board also challenged the Company’s own Environmental, Social and Governance (ESG) position, given its focus on ESG initiatives for clients.

How stakeholder interests have influenced decision making

We define principal decisions as both those that are material to the group, but also those that are significant to any of our key stakeholder groups.
In making the following principal decisions the Board considered the outcome from its stakeholder engagement as well as the need to maintain a reputation for high standards of business conduct and the need to act fairly between the members of the Company.


1 : Dividend

The Board reviewed the high level of cash and capital held by the Company in relation to its regulatory capital requirement, capital management policy and liquidity risk management framework as well as future requirements and potential risks identified in the ICAAP. After due consideration, the directors decided to exercise their discretion declared and paid interim dividends of £35 million (2019: £105.9 million). After payment of the dividends the Company retains sufficient capital and liquidity to meet its requirements, plus a buffer in line with its risk appetite.

The Company’s Pillar 3 disclosure allows the Company’s stakeholders and other market participants to understand the Company’s capital and liquidity adequacy, particular risk exposures and risk management process.

2 : COVID-19

Regular business continuity planning meetings were held to ensure uninterrupted provision of services and communications to clients, regulators and group companies and to protect the well-being of employees.

The company implemented work from home arrangements for all staff in March 2020 and moved internal and external meetings online. Return to office planning has considered changes to future operational set-up and workplace requirements as a result of employee and client feedback.

By order of the board,

Date 20 April 2021

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