- Canadian investor calls for female directors, citing Trudeau
- More than 80% of competitors have at least one woman on board
The brash bro culture of Burger King that plays to young male consumers craving fiery chicken fries isn’t so welcome in the boardroom, especially in Canada.
Burger King’s parent needs to add women to its all-male board, says a Vancouver-based investor who became a shareholder when the company took over the Canadian doughnut chain Tim Hortons in 2014. Fred Pinto, head of OceanRock Investments Inc., wants fellow shareholders at Thursday’s annual meeting to vote in favor of his proposal to adopt a clear plan for more female directors. The Tim Hortons board had three female members, but they didn’t join the combined company’s slate.
Restaurant Brands International Inc.’s decision to base the merged company in Canada instead of Burger King’s former home in Miami makes the lack of female board members especially unwise, Pinto said. He contrasted it to newly elected Prime Minister Justin Trudeau’s pledge to ensure that half his cabinet members are women.
“It’s an odd position to take in Canada, because certainly board diversity and targeting an appropriate number of women representatives is a hot-button issue,” Pinto said in an interview. “They fairly and legitimately took over Tim Hortons, but why would you not continue with the policy Tim Hortons had in place?”
The slow progress toward gender parity in the boardroom this year has been criticized roundly by everyone from the United Nations to the U.S. Government Accounting Office. The World Economic Forum estimated during its conference in Davos, Switzerland, this year that at the current rate it may take 80 years for women to reach parity in leadership in the world’s companies.
For its part, Restaurant Brands said it has already modified its guidelines to make diversity considerations more apparent. Making a specific pledge to add women might hamper the flexibility to select the best candidates, the company said in an April proxy filing in response to Pinto’s measure.
“The supply of women who are well prepared to be candidates on corporation boards is as good as the supply from the male side” said Irene Chang Britt, a director at Dunkin’ Brands Group Inc., TerraVia Holdings Inc. and Tailored Brands Inc. “You look at the quality of women out there and I can’t believe that people can still be saying that.”
Dunkin’ Brands, which owns Dunkin’ Donuts and Baskin-Robbins, counts two women, including Britt, on its board. Companies with three or more female directors perform better than average, according to a study from Catalyst Inc.
Corporate-governance adviser Institutional Shareholder Services, which supports Pinto’s proposal, says 81 percent of Restaurant Brands’ peers have at least one woman on the board. McDonald’s Corp. has three female directors, while Wendy’s Co. has two. There are three women on the Starbucks Corp. board.
“It’s a sound business issue that can give a competitive advantage if you are inclusive on diversity,” said Bill Ide, partner and head of corporate governance at the law firm Dentons US LLP in Atlanta. “Some people just sort of brush this aside.”
The pressure won’t end with Thursday’s vote in Oakville, Ontario. The group 2020 Women on Boards, which seeks to have women represent 20 percent of directors at the largest companies, will target the Burger King owner on June 20 as part of a campaign to pressure companies with all-male boards, said Malli Gero, co-founder of the group.
Among companies the group has targeted, and which later added women, are Facebook Inc., Urban Outfitters Inc. and Monster Beverage Corp., she said.
But similar shareholder proposals haven’t fared well in Canada, said Ben Magarik, head of Canadian business development at ISS Corporate Solutions, an ISS subsidiary that advises companies on governance. There have been nine such votes at companies in the Standard & Poor’s TSX Composite Index since the beginning of 2014. None has come close to passing, he said.
What does seem to be working is broader push by Canadian regulators to make it easier to compare board diversity, Magarik said. For example, for companies in the Calgary area, there are now an average of about 1.5 female directors per board versus an average of less than one woman in 2014, he said.
The Canadian Parliament has given initial approval to a plan to take out gender-specific words in the the national anthem, “O Canada.” The province of Ontario said this week that women should make up 40 percent of appointments to provincial boards and agencies by 2019. And Ontario is encouraging businesses there to set a three- to five-year goal of 30 percent women on their corporate boards by the end of next year.
Whether consumers will care will depend on how much attention the campaign receives. Very few of Burger King or Tim Hortons customers will ever think about the composition of the board unless it becomes a bigger issue, said Dennis Lombardi, president of Insight Dynamics LLC, a restaurant adviser.
“As a rule, adverse publicity doesn’t do a brand well,” Lombardi said.