The Shareholder Association for Research and Education (SHARE) is stepping up its efforts to push for corporate action on diversity amid concerns about a lack of progress in the effort to improve the gender diversity of corporate boards.
The Vancouver-based institutional shareholder advisory group announced on Tuesday that its clients — which include institutional investors such as pension funds, mutual funds and other asset managers — are filing shareholder proposals that call on Canadian companies without any female directors to develop clear plans to change that situation.
In addition, SHARE says that when the organization is voting on behalf of its clients, “SHARE will vote against the entire nominating committee of the board of directors if a company’s board has zero women and does not disclose a clear policy aimed at increasing that number.”
The move, which comes on the eve of International Women’s Day, stems from concerns that the progress on improving gender diversity within corporate Canada is too slow. Citing data from the Canadian Securities Administrators (CSA), SHARE notes that women occupy only 12% of Canadian board seats and that just 8% of executives at the 100 largest companies are female.
“The slow progress on gender equality is raising red flags for our clients,” says Delaney Greig, engagement analyst at SHARE, in s statement. “Gender diversity is a critical attribute of a well-functioning board and a measure of sound corporate governance. Research shows that companies with policies that promote gender wage equality and the advancement of women into management attract more talented employees of both genders and consistently out-perform the overall market.”
SHARE reports that last year it worked with its client, OceanRock Investments, to file a diversity proposal at Restaurant Brands International (RBI). Although RBI has since added a woman to its board, “this year OceanRock is asking for a comprehensive plan to address diversity across the entire company.”
In addition, OceanRock has filed three other shareholder proposals on behalf of its clients that seek to address diversity concerns. Furthermore, the firm is also asking boards to include indigenous heritage as a diversity consideration.
“At the end of the day, investors know that better diversity leads to better companies,” says Greig. “Equal gender opportunities and wages create conditions for strong financial returns and a strong economy as a whole.”
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