Influence

Through engagement and advocacy, BCI applies its influence on companies in which we invest, our partners, and other participants in capital markets. We do this to increase transparency surrounding ESG risks, improve companies’ long-term performance, and promote the stability and integrity of capital markets.

Case Study: Advocating for Changes to the Canada Business Corporations Act

Beginning in 2014, BCI actively participated in the consultations by the Government of Canada on modernizing the Canada Business Corporations Act (CBCA). It included a mandatory advisory vote on executive compensation, adoption of diversity policies and targets, enhancing shareholder rights by improving the proxy voting system, as well as other governance-related issues.These consultations culminated in changes to the CBCA in 2019, and diversity requirements became effective in 2020. Companies formed under the CBCA, including about half of Canada’s largest publicly traded companies, will now align with and go beyond Canadian securities laws. It requires issuers to disclose details on policies, targets, and statistics for diversity1 in the boardroom and senior management and publish them in the annual shareholder meeting notice or proxy circular. If companies do not have such policies, targets, and statistics, they will need to comply or explain why not, and there are no quotas in the regulations.

The disclosure requirements now go beyond the TSX Composite Index of large companies encompassing smaller issuers under the CBCA that are on the TSX Venture and Canadian Securities Exchange.

1 Diversity is defined as including women, aboriginal peoples, persons with disabilities, and members of visible minorities.

Decrease in TSX Composite Index companies with all-male boards of directors

Source: Institutional Shareholder Services Inc.

Increase in TSX Composite Index company boards with at least 30 per cent female representation

Source: Institutional Shareholder Services Inc.

Increase in TSX Composite Index company boards with a gender diversity target

Source: Institutional Shareholder Services Inc.

Proxy Voting

As a shareholder in public companies, BCI has the right to vote on various issues at company meetings.

Our voting guidelines help direct our decisions and serve to advise our investee companies of our expectations related to ESG matters. Our voting decisions are published in advance.

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Direct and Collaborative Engagements

BCI seek to directly engage with companies in constructive dialogue to encourage improvements, depending on our level of control and influence, where we identify an ESG risk that should be managed. We collaborate with like-minded investors to increase our capacity to influence companies and learn about best practices across industries. Through our asset management activities in private companies, where we hold board seats or otherwise have material shareholder influence, BCI uses its influence to ensure management teams are monitoring and managing ESG risks.

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Policy Advocacy

BCI selectively seeks opportunities to engage at the policy or market level. We use our influence to advocate or show support for public policy and regulatory changes that make ESG principles part of the regulatory framework and improve the investment environment for our clients.
Either directly or through the organizations that we participate in, we can apply influence to address systemic risks, such as climate change, with the expectation that it will lead to greater stability and integrity within the capital markets.

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