Corporations lag investors on diversity
Gender diversity will be front and centre at the annual conference of the Responsible Investment Association, an organization that touts that “the integration of environmental, social and governance factors into the selection and management of investments can provide superior risk- adjusted returns and positive societal impact.”
The delegates for the Vancouver conference, which takes place Thursday and Friday, will be armed with results from a poll of more than a thousand i nvestors, which indicate equity owners are ahead of corporations when it comes to their belief in the value of gender diversity.
The online s ur vey — which has a margin of error of plus or minus three percentage points — showed that 82 per cent of investors believe that “women should be better represented on corporate boards in Canada.”
Recent numbers show that the bulk of corporate boards are filled with people who fit the pale, male and stale label. Last September, t he Canadian Securities Administrators published a staff review of women on boards and in executive officer positions. The numbers have shown a slight increase, with the largest gain being in the larger issuers. ( The banks, which are among the early adopters of diversity initiatives, are not included.)
Among the 218 TSX-listed companies with a market cap of at least $ 1 billion, 18 per cent of board seats are held by women, versus 16 per cent in the previous analysis.
For the 42 companies with a market cap of at least $ 10 billion, women make up 23 per cent of the directors, compared with 21 per cent previously. Overall, women make up 12 per cent of the board seats, with 55 per cent of issuers having at least one woman on the board.
RIA plans to put action behind its words: Next Monday, RIA member and Vancouver- based OceanRock Investments Inc. plans to ask Restaurants Brand International — the parent of Burger King and Tim Hortons — to improve gender diversity. RBI has one female director.
The survey done for the conference also found that 92 per cent of investors “believe that ‘ women and men should receive equal pay for equal work,’ ” with 55 per cent of investors being willing to sell their investments if they learned that a company they are invested in does not pay men and women equally for their work.
More than three- quarters believe companies “should be required to disclose how much they pay women compared to men.”
However, the survey also shows that there is more work to be done when it comes to educating investors. While 77 per cent of respondents said they are interested in responsible investing, a “staggering 73 per cent know very little or nothing about it.”
The i ndustry group is home to a mixed bag of mutual fund companies, financial institutions, asset management firms, advisers, consultants, investment research firms and individual investors.
“These findings indicate that advisers could add significant value to client relationships by informing their clients about suitable RI options and educating them about the long- term financial benefits of incorporating ESG factors into investment decisions,” noted the report.
Institutional investors, particularly the large pensions, have been some of the early adopters of responsible investing. They have done that by employing social, environmental and governance screens for some of their investments. Some asset managers also offer sustainable investment funds, with one, Genus Capital Management, offering a slew of fossil- free options. Genus’s view is that an investor doesn’t need to own fossil fuel companies to produce excellent performance.