BOSTON, March 28 (Reuters) - State Street is

spelling out criteria its portfolio companies must use to

explain their directors' service on multiple boards, the asset

manager's top stewardship executive said in an interview.

Director service on too many boards, known as "overboarding"

has drawn scrutiny from many investors and helped drive down the

share of board members of Russell 3000 index companies

who serve on more than one board to 17.2% at the end of 2023

from 19% in 2018, according to researcher Equilar.

With $4.1 trillion under management as of Dec. 31, State

Street is an influential investor whose proxy votes shape the

corporate governance policies of many large companies.

Among S&P 500 companies whose shares it holds, State

Street now expects company boards to specify how they evaluate

their directors' time commitments and their limits for how many

different boards directors may serve on.

Companies that do not comply risk votes against the

chair of their nominating committee, State Street said.

The expectation is part of a new proxy voting approach the

Boston-based asset manager announced last year, when it said it

would stop using numeric limits on the number of boards where

directors serve.

Ben Colton, State Street's global head of asset stewardship,

said the new details were meant to help boards to make their own

judgments.

"We're basically trusting the nominations and governance

committees," Colton said in an interview on Wednesday.

Colton said State Street's other governance guidelines were

largely unchanged. Among top index fund managers, State Street

has continued to vote for the highest share of shareholder

resolutions related to environmental, social and governance

(ESG) concerns, according to a recent report by Morningstar.

Like executives at other companies, Colton said State

Street's overall support for ESG resolutions has declined as

they have become more prescriptive and as companies disclose

more details.

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