On April 26 SHARE presented a shareholder proposal about board gender diversity at the Annual General meeting of Constellation Software on behalf of the Fonds de Solidarité des Travailleurs du Québec.
The proposal received 49.16% of the shareholder vote; the highest vote for a gender diversity proposal ever in Canada.
Through the proposal we asked the Board to adopt and publish a formal, written Board diversity policy and to report to shareholders on the Board’s plans for increasing gender balance on the Board of Directors and in senior management.
Normally we are able to address such issues through dialogue with the company leading to withdrawal of the proposal. In this case, we have had to go to vote two years in a row.
When it was first presented last year, the proposal received 42% of the shareholder vote.
In the months following, Constellation Software added to the mandate of the Compensation, Nomination and Human Resources Committee the duty to “identify highly qualified women and highly qualified individuals from minority groups to include in the pool of candidates” for consideration in the event of a board vacancy. But the company did not provide any concrete plan or process to address the absence of women from the company’s senior ranks.
After the Fonds refiled the proposal this year, Constellation appointed the first woman ever to its board, moving on from its status as the only company on the TSX 60 with an all male board of directors. Constellation Software’s executive meanwhile remains all male.
The over 49% support for this year’s proposal signals two things for us: First, Constellation Software’s shareholders are not satisfied that the board has addressed their concerns. Second, investors understand that gender diversity in corporate leadership is not achieved by adding one woman to a board. For the time being, at least, it requires clearly defined plan with processes to identify and advance women to the board and senior management, measures to overcome hidden or systemic bias within company culture, and targets and metrics for accountability along the way.
We are optimistic that this year Constellation Software will listen to its shareholders and put in place such a plan before the next annual meeting. Regardless, we will continue to push Canadian companies to catch up with other sectors of society by including both women and men on their leadership teams.