Shareholders being heard on corporate gender diversity

By May 2, 2017News

By: Delaney Greig, Engagement Analyst & Norah Murphy, Communications Coordinator

As the names of each board member and senior executive were read out at the Canfor Corporation and Constellation Software annual meetings last week, the need for a plan to increase gender diversity came into sharp focus.

SHARE attended both AGMs alongside clients who filed shareholder proposals asking each company to adopt and publish a plan aimed at improving gender diversity at the Board and executive level. Neither Canfor nor Constellation Software currently has any women on its Boards of Directors or among executive officers. The proposals prompted both companies to make commitments to take meaningful action to address the issue.

At the Canfor AGM on April 26, the Canadian Labour Congress Staff Pension Plan presented their shareholder resolution which received 32% support from shareholders. Lori Mayhew, Secretary-Treasurer of MoveUP was on hand to represent the Plan at the meeting. As Canfor is a controlled company, the resolution was not expected to pass but rather to communicate the importance of this issue among independent shareholders. When asked about their future plans to improve gender diversity in the boardroom Canfor committed to working to develop a gender diversity policy by the end of the year and later reiterated this commitment on social media.

On April 28, 42% of shareholders at Constellation Software voted in favour of a board diversity proposal filed by The Fonds de Solidarité des Travailleurs du Québec, prompting Constellation President Mark Leonard to vow to address the issue in a “meaningful way”. SHARE will be following up with Constellation Software to support those efforts.

The positive commitments made by these two companies indicate that shareholder voices are finally being heard on this issue. This is encouraging for investors who believe better diversity leads to better companies. It seems every quarter a new report comes out showing that companies with a critical mass of women on their boards and companies with policies that promote gender equality and the advancement of women attract more talented employees of both genders and consistently out-perform the overall market.  Gender diversity is a win-win-win for companies, shareholders, and gender equality.[1]

But if we hope to improve the gender gap across corporate Canada, we need to continue to engage with companies until we see real change. That’s why SHARE and OceanRock Investments Ltd. worked together again this year to file a diversity proposal at Restaurant Brands International (RBI), the parent company of Tim Horton’s. Although RBI added one woman to its board after OceanRock’s diversity proposal received majority support from independent shareholders last year, she is the daughter of another director who is a founder of the hedge fund that is RBI’s primary shareholder.

This suggests that the new appointment does not truly address shareholders’ concerns about increasing diversity and independence on the board. OceanRock has filed a shareholder proposal with RBI once more, asking for a comprehensive plan to address diversity across the entire company. The proposal will go to a vote on June 5th.

SHARE welcomes the commitments from Canfor and Constellation Software to address gender diversity in its leadership and we look forward to engaging with both companies as they develop their approach. These are important first steps in the right direction, but there remains much work to be done on gender equality at the top echelons of Canadian companies and throughout the workforce.

[1] Ontario Ministry of Labour, “Closing the Gender Wage Gap: A Background Paper”, (2015): https://www.labour.gov.on.ca/english/about/pdf/gwg_background.pdf.