Proxy advisory firm Institutional Shareholder Services Inc. (ISS) is proposing to expand its gender diversity policy in the upcoming proxy season to cover more Canadian companies, the company announced Thursday.
ISS is launching a consultation on it benchmark voting policies for a number of countries
Specifically for Canada, ISS proposes to begin applying its Canadian board gender diversity policy for “widely held” publicly traded companies beyond those that are already included on the S&P/TSX composite index.
As Canadian regulators have pushed for greater disclosure from companies about their approach to gender diversity, shareholders have become increasingly impatient with companies, ISS notes.
“Canadian institutional investors have begun to voice their frustration with the slow pace of boosting boardroom gender diversity levels through their voting policies,” ISS states in its draft policy.
In fact, 43% of companies that are not part of S&P/TSX composite index covered by ISS still don’t have any female directors. This “could potentially result in withhold recommendations if no formal gender diversity policy is disclosed,” the draft policy states.
ISS introduced a board diversity policy in the 2018 proxy season, and an expanded policy would come into effect for shareholder meetings after Feb. 1, 2019, ISS says.
The proposed expansion of its policy “aligns with ISS client expectations and recommended best market practices with respect to board gender diversity,” the firm says.
ISS is also seeking feedback on its draft compensation policy assessing pay for performance at Canadian and U.S. companies.
Comments on the proposed policies are due by Nov. 1.