A double-double message from RBI shareholders: Act now on decent work

By June 18, 2020News

By Sarah Couturier-Tanoh and Anthony Schein

In April, we wrote on the SHARE blog about why the Atkinson Foundation with SHARE’s support had re-filed a shareholder proposal regarding decent work practices at Restaurant Brands International (RBI), which operates Tim Hortons, Popeyes, and Burger King.

Last week, the proposal, along with our recommendation to withhold votes for the re-election of the board chair, Alexandre Behring, was put to shareholders. On both votes, the results were overwhelming – a double-double message from shareholders: the company needs to take action on decent work oversight across its operations, including franchises.

More than 40 percent of the company shares are controlled by its majority shareholder – 3G Capital – which is closely aligned with management. Among the remaining – independent – shareholders, 83 percent voted in favour of the proposal. That’s 37 percent of all shareholders. The same proposal received 66 percent support from independent shareholders in 2019.

Twenty percent of independent shareholders also withheld votes from the board chair – a strong signal that investors are frustrated with the company’s inaction.

In her remarks at the shareholder meeting on June 10, Atkinson Foundation Executive Director Colette Murphy spoke to why oversight of decent work matters to the Foundation’s mission, and to the company’s success:

The values and objectives of our philanthropic work are aligned with our investment portfolio. And we want to see the companies we own succeed.  A responsible approach to human capital management – including board-level oversight – is critical to the success of a company like RBI – to any company… The success and reputation of RBI’s business depends on a highly-engaged workforce and strong franchisee relationships.

Effective workforce management is a primary source of value for many public companies. A large body of research shows the connection between human capital management, company performance and risk mitigation.

SHARE has arranged to meet with the company to discuss the proposal. We are hopeful that RBI management will come prepared to address concrete steps that can be taken to address shareholder concerns.

At the end of 2019, SHARE identified more than two dozen companies that require improvements to their policies and practices related to decent work and human rights. This includes several like RBI where our goal was to embed board accountability for decent work. While boards of directors have not typically had oversight responsibility for workforce management, it’s now abundantly clear that how frontline workers are treated cannot be an afterthought. It has to be central to how corporate boards think about a company’s success. You can read more about SHARE’s approach to decent work here.

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