Shareholders made their voices heard at Restaurant Brands International’s (RBI) annual general meeting on June 9th as they voted on a proposal requesting the company to adopt a formal board diversity policy.
The resolution, filed by OceanRock Investments Inc. in partnership with SHARE, won 16.5%[*] of the overall vote, leading media reports to focus on the rejection of the proposal by RBI shareholders.
But a closer look at the results shows that the rejection was not so clear cut.
Restaurant Brands International is a controlled company. Pershing Square, Berkshire Hathaway and 3G Capital directly and indirectly own 62% of the shares and voting rights in Restaurant Brands, and four partners of 3G Capital sit on its board.
Assuming that all three controlling shareholders voted against the OceanRock/SHARE proposal, support for the resolution amongst the non-controlling shareholders was a majority, at 55%.
The result points to a large number of minority shareholders calling for a clearer plan of action when it comes to diversity in the boardroom. 2016 marks two years since the Ontario Securities Commission and most of the members of the Canadian Securities Administrators adopted a “comply or explain” rule on gender diversity for listed companies. The rule requires companies to disclose how many women directors and executives they have and their policies on gender diversity, or to explain why they are not doing these things.
If the picture of gender diversity in the boardroom is going to change, companies need to adopt both a policy and a plan. While this proposal did not achieve a majority of the total vote, the strong show of support from independent shareholders is an encouraging step forward. SHARE is committed to engaging with companies to enhance the case for a wider variety of perspectives in decision-making and will continue to encourage Canada’s corporate boardrooms to embrace diversity.
[*] All of the percentages shown here were calculated using a total of 440298251 votes regarding the shareholder proposal. This total excludes the broker non-votes.