Business People Meeting Discussion in a boardroom concept

The Canada Pension Plan Investment Board (CPPIB) will push harder for gender diversity on corporate boards around the world with its new global gender diversity voting practice, the investment-management organization announced Friday.

“Effective immediately, CPPIB will establish a policy to vote against the chair of the board committee responsible for director nominations at its investee public companies if the board has no women directors,” it says in a news release.

CPPIB will also accompany the new practice with increased effort at board engagement on the issue of board diversity.

“We believe that companies with gender-diverse boards are more likely to achieve superior financial performance over the long-term. For that reason, engaging with companies to drive better corporate behaviours is a key part of CPPIB’s mandate,” says Mark Machin, president and CEO of the CPPIB. “We have been addressing board-effectiveness issues in our portfolio for many years and hope more institutional investors will join us in advocating for diverse boards.”

The investment manager has been using a similar approach in Canada for a couple of years, and has produced some positive results, CPPIB says.

“In 2017, CPPIB cast votes at the shareholder meetings of 45 Canadian companies with no women directors and undertook efforts to engage with these companies. A year later, nearly half of those companies had appointed a woman director,” it says.