Gender diversity is a critical attribute of a well-functioning board and a measure of sound corporate governance. Competing in a global marketplace requires companies to promote and select individuals for leadership positions who will bring diverse perspectives to the decision-making process. Research has demonstrated that companies that have women on the Board of Directors have outperformed their peers that do not.
Recognizing the benefits of gender diversity on corporate boards the Ontario Securities Commission recently made amendments to National Instrument 58-101. These amendments follow a “comply or explain” model and require issuers to make disclosures regarding the number of women on the board and in executive officer positions.
Many of Restaurant Brands International’s (RBI) competitors such as McDonalds, Starbucks, Dunkin’ Brands and Wendy’s have at least two women directors on their boards. As long-term shareholders, we believe that RBI will benefit from expanding its recruitment pool and promoting a more diverse board.
In its 2016 Management Information Circular RBI noted that it does not have a formal written policy relating to the identification and nomination of women directors nor does it have a formal written diversity policy. However, in response to a shareholder proposal filed for its 2016 Annual General Meeting, RBI made changes to the Charter of the Nominating and Corporate Governance [NCG] Committee “to consider diverse candidates in terms of race, gender, geography, thought, viewpoints, backgrounds, skills, experience, and expertise.” It said that “any search firm retained to assist the NCG Committee in seeking new director candidates for the board will be instructed to seek to include diverse candidates who possess these qualifications and criteria.”
Following the 2016 Meeting, the company also expanded its board and appointed one female Director. However the new Director is the daughter of current RBI Director and 3G Capital founder Carlos Sicupira and sits on multiple corporate boards alongside him, which suggests that the new appointment does not truly address shareholders’ concerns about diversity and independence on the board.
Nor do these changes address in any meaningful way the company’s plans, timelines and activities for increasing gender diversity on the board and senior management, or identify effective processes and indicators for developing and advancing women candidates for the board and senior management.
We therefore believe that the Board needs to adopt a more formal and systematic approach to improving diversity in its ranks.
Shareholders request that the Board of Directors:
- Adopt and publish a formal, written Board diversity policy by December 2017; and
- Provide to shareholders a report by December 2017, at reasonable cost and omitting proprietary information, which outlines the Board’s plans, timelines, process and activities for increasing gender diversity on the Board of Directors and amongst senior management. We propose that the requested report should also address the number of women in the candidate pool for the most recent recruiting period.