BCI Raises Expectations on Board Diversity and Addressing Climate Change Risk in New Proxy Voting Guidelines

February 9, 2021

Victoria, British Columbia – Today, BCI published new Proxy Voting Guidelines detailing our evolving expectations regarding the governance practices of the publicly-traded companies in which we invest. The new guidelines raise our expectations on increasing board diversity, addressing climate change risk, and reviewing executive compensation in the context of COVID-19 and its impact on human capital.

BCI updates the guidelines every two years. They reflect ongoing research of corporate governance best practices and BCI’s understanding of evolving risks facing publicly-traded companies as represented in shareholder proposals.

Significant changes made to the guidelines include:

Diversity and Inclusion: BCI advocates for the 30% Club’s target of 30 per cent women on all boards and c-suites globally, including at all S&P/TSX composite index companies by 2022, where 110 of 224 companies still do not meet that threshold.

    • BCI now expects that women directors will comprise at least 30 per cent of a company’s board of directors.

“Boards and executive management have an important role to play in promoting and fostering diversity and inclusion,” said Jennifer Coulson, vice president, ESG, public markets.

“We expect boards to adopt and disclose a formal diversity policy that includes targets and timelines to increase levels of diversity at the board and senior management level.”

Events of the past year have further reinforced the need for companies to also focus on diversity among other underrepresented groups. BCI will consider diversity more broadly as disclosures permit.

Climate Change: BCI believes companies that do not carefully consider issues of environmental and social responsibility risk failing to create shareholder value. There is also increasing regulatory and investor pressure on companies to provide climate-related disclosure.

    • BCI will consider supporting more prescriptive shareholder proposals on climate change to publicly signal our expectation that companies must act immediately.
    • BCI will escalate the targeting of directors for weak responses to climate change risk.

“We expect directors to oversee management’s efforts to manage climate change-related risk,” said Coulson

“BCI will consider supporting more prescriptive proposals, including those asking companies to align emission reduction targets with best practices such as net-zero by 2050.”

Executive Compensation: BCI believes pay decisions are one of the most direct and visible ways for shareholders to assess the performance of the board of directors. Compensation plans must align with pay for performance and be sensitive to the broader workforce and societal context.

    • BCI will escalate votes against company directors for poor compensation practices as part of a more holistic review of compensation considering the impact of the COVID-19 pandemic.

“While we have seen progress in compensation plan design, we remain concerned that total pay continues to increase rapidly, especially in the U.S. market,” said Coulson.

“COVID-19 presents additional concerns about employee safety, layoffs, and capital allocation decisions relating to dividends and share buybacks.”

BCI expects that implementing these guidelines will assist and encourage boards to remain focused on building shareholder value while holding them accountable for actions taken.

A searchable database on our website provides an account of all our proxy voting, including the rationale for when we vote against a management proposal and all shareholder proposals.

You can read our complete Proxy Voting Guidelines here.


Ben O’Hara-Byrne, Senior Manager, External Stakeholder Engagement.

778-410-7310, communication@bci.ca