A proposal to create a formal diversity policy at the parent company of Tim Hortons and Burger King has been rejected. The proposal aimed to increase the number of women on its all-male board of directors.
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Oceanrock Investments Inc. and the Shareholder Association for Research and Education asked the company to write a formal diversity policy and inform shareholders how and when it intends to increase the number of women on its board of directors and in senior management positions.
Oceanrock Investments, which says it owns nearly 19,000 RBI shares, acted on behalf of the Meritas Jantzi Social Index Fund.
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Before Tim Hortons and Burger King merged and became RBI in late 2014, a quarter of the Tim Hortons board was comprised of women, according to the shareholder proposal. But now, RBI’s 11-person board of directors is all male.
So the proposal asked RBI to complete the policy and update shareholders by December 2016.
While there are many benefits to increasing gender diversity on corporate boards, including the potential for better shareholder returns, that wasn’t the sole reason for the proposal, said Fred Pinto, OceanRock Investment’s CEO, while presenting the proposal at RBI’s annual general meeting on Thursday.
“We did this quite simply because it’s the right thing to do,” he said. Still, shareholders voted to reject the proposal.
The result wasn’t unexpected, Pinto said in an interview following the vote. The group will now wait to see how many independent shareholders supported their proposal as more detailed results are released in the next few days.
The board had declined to make a recommendation on how shareholders should vote, but did amend its new director nomination process to consider diverse candidates in response to the proposal.
These are more general steps, Pinto said, and he would like to see RBI take more specific action, including presenting a timeline for gender diversity inclusion—gender diversity on corporate boards in Canada has become a source of tension between shareholders and companies.
BCE Inc.’s shareholders voted down a similar proposal at their annual general meeting in April of this year. That proposal came from a shareholder and member of Mouvement d’education et de defense des actionnaires (MEDAC) on behalf of the group, which aims to give shareholders better representation before corporate boards.
A news release from April 28 stated a preliminary count at the general meeting indicated 86% of the votes were against the proposal. The release also said BCE’s board of directors had advised shareholders to vote against the proposal in its 2016 proxy circular; the company argued that while it values diversity, considerations such as setting targets shouldn’t override the promotion of people with the appropriate skills, experience and leadership abilities
Also, a Dollarama shareholder brought up concerns over the lack of women in leadership positions at that company’s meeting earlier this week.
Pinto plans to take a wait-and-see approach before determining whether to reintroduce the issue at next year’s RBI annual general meeting.