Why we are recommending shareholders withhold their vote for the co-chair of the board at RBI

By April 21, 2020News

By Sarah Couturier-Tanoh, Shareholder Engagement and Policy Analyst & Anthony Schein, Director of Shareholder Advocacy

The COVID-19 pandemic has shone a spotlight on decent work issues, as we have all seen just how reliant we are on front line, often low wage and precarious workers. As shareholder advocates, and as an organization fundamentally concerned with human rights, the crisis has amplified the need for high level accountability – both on corporate boards, and among policy makers. Whether it is providing appropriate protective equipment and fair wages to personal support workers, making sure that suppliers aren’t left holding the bag for cancelled orders, or paid sick leave for restaurant employees, leadership and accountability need to come from the top.

At the end of 2019, before the pandemic, we identified more than two dozen companies where shareholders should seek improvements to company performance related to Decent Work and Human Rights, including several where our goal was to embed board accountability for decent work. While boards of directors have not typically held responsibility for workforce issues, 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.

We filed formal shareholder proposals at four companies for the 2020 proxy season to support this objective and have continued engagement with others. Related proposals were filed at McDonald’s, Dollarama, Brookfield Asset Management, and Restaurant Brands International (RBI).

This winter, we had positive discussions with McDonalds, and the company agreed to amend the charter of its board public policy and strategy committee to assign responsibility for oversight of workplace health and safety, respectful workplace environments, and diversity and inclusion. After meeting with Dollarama, the company agreed to similar language in its own board charter. Thomson Reuters, where we held similar discussions last year, just published its own revised board committee charter adopting SHARE’s proposed changes.

Unfortunately, Restaurant Brands International has continued to rebuff shareholder concerns. Last year SHARE, on behalf of the Atkinson Charitable Foundation, filed a proposal asking the company for a report on decent work practices across all operations, which received a large majority of independent shareholder support. When the company failed to act, we re-filed the proposal this year on behalf of Atkinson.

While shareholder proposals are advisory in nature, companies need to respect the rights of shareholders and make a meaningful effort to engage on issues they identify. Ignoring last year’s majority vote of independent shareholders on our proposal is not acceptable.

That’s why we’ll also be taking the further step this year of recommending shareholders withhold their vote from Alexandre Behring, chair of RBI’s nominating and corporate governance committee.

An ‘exempt solicitation’ is a process of filing a notice to the regulators (in this case, the Securities and Exchange Commission) to notify other company shareholders that it is exempt from conventional solicitation rules. It is a mechanism that allows a shareholder to inform others of its position and to recommend a vote on a proxy matter. This process allows shareholders to communicate with one another without triggering proxy rules requiring communication to be sent to all shareholders through a proxy circular. Exempt solicitations are filed with regulators and are widely available to all investors. We will not be seeking proxies from other shareholders on this vote, but SHARE will be recommending the vote to its own clients and filing an exempt solicitation with the Securities and Exchange Commission making the case for all RBI shareholders to use their vote to uphold their rights – and those of workers on the front lines.

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