Peter MacKay: Pale, Male and Stale

Peter MacKay’s recently revealed Mother’s Day and Father’s Day greetings to his staff clearly demonstrate the extent of institutionalized gender stereotyping by decision makers in Canada.

Here’s what he had to say to mothers, “By the time many of you have arrived at the office in the morning, you’ve already changed diapers, packed lunches, run after school buses, dropped kids off at daycare, taken care of an aging loved one and maybe even thought about dinner.”

And fathers? “I wish to take this opportunity to recognize our colleagues who are not only dedicated Department of Justice employees, but are also dedicated fathers, shaping the minds and futures of the next generation of leaders.”

(Read the full text of both messages here.)       

Gender diversity on boards and in the C suite is an important issue for socially responsible investors. We have been working tirelessly, engaging management and sometimes bringing resolutions in an attempt to increase the number of women on corporate boards, and in senior management, in Canada.

In an article discussing Britain’s efforts to get more women on Boards, Jacey Graham, co-author of The Female FTSE Board Report 2014, comments on equality, ‘It will not be easy, for while there is a "lot less outright sexism, there's still a huge amount of unconscious bias".’

 

The idea that systemic biases exist, or that there is an ’old boys network’ that prevents women from moving onto boards is frequently dismissed. However humiliating this most recent episode is for Mr. MacKay, he has added immeasurably to the debate by bringing this latent sexism into the open.

 

Often, when quotas or results based legislation is discussed, the response is either that there are not enough qualified women available, or that we are moving in the right direction and it is only a matter of time before we achieve gender parity.

A Globe and Mail editorial discussing the OSC ‘s new rules on board diversity lauds the voluntary guidelines stating “unlike quotas, it’s a reasonable step”. However, that purported reasonableness is undercut by the fact that “Women make up just 12 per cent of directors on the boards of major publicly traded companies in Canada, a number that has climbed painfully slowly from about 9 per cent a decade ago.“

Discussing gender quotas, The Economist suggests they are becoming more popular due to both the “glacial pace of voluntary change” and that Norway’s quota law (requiring 40% of directors be women)  “has not been the disaster some predicted.”  

“The average number of women on Canadian boards is about 14 percent, which reflects a complete failure to draw on the deep female talent pool that is out there.” Peter Dey, Canadian Director as quoted in Women on Boards: A Conversation with Male Directors.

Quotas. It’s time.

SRI fundcos take active ownership role

Mutual funds with a responsible investment mandate are taking an active ownership role, opposing management resolutions far more often than non-RI fund groups, and supporting ESG shareholder resolutions. That’s the conclusion of the Canadian Mutual Fund Proxy Voting Survey, released this week by the Responsible Investment Association. 

The survey covers the 2013 proxy voting season, examining the voting patterns of 25 Canadian mutual fund families.

The three SRI-branded fund families (NEI, Meritas and Inhance) voted against compensation-related (say on pay) resolutions put forward by management 92% of the time at Canadian companies and 97% at U.S. companies, compared to 13% at both Canadian and U.S. companies by their mainstream counterparts.

On resolutions concerning executive stock incentive compensation plans, the RI funds voted against management 84% of the time, as opposed to 26% of the time by mainstream funds.

The RI fund groups were also more likely to support climate-related shareholder resolutions, voting in their favour 92% of the time versus 39% by non-RI fund groups.

"Voting against management recommendations is of course not limited to the RI funds -- a number of the non-RI fund groups surveyed supported multiple ESG issues and appear to be ready to take a long-term view," the study says.

Along with NEI, Meritas and Inhance, Desjardins, PH&N and CIBC were highlighted as  being the most critical of the status quo and most vigilant with their proxy voting.

Overall, the survey found that Canadian mutual funds side with management on the vast majority of resolutions brought to vote at TSX companies -- around 95% of the time, in most cases. In contrast, the three RI-branded funds voted with management on their resolutions only 56% of the time, and virtually none of the time in the case of "say on pay" resolutions.

"Not all mutual funds accept the status quo," the study concludes. "There are a handful of fund families, specifically those with an orientation towards responsible investment, who take a more active stance in challenging management recommendations. They tend to oppose more management-sponsored resolutions and support more ESG-related shareholder resolutions than their mainstream counterparts."