Enhancing board diversity and board chair independence at a Canadian software company
We began engaging with a Canada-based US$29 billion information technology company in 2020. The company acquires, builds, and manages vertical market software businesses specialized for client needs. As women are generally underrepresented in computing, we were concerned with the company’s ability to attract talent given only two of eleven directors were women.
The company also combined the role of CEO and board chair, which our equity investment team believed could impair the board's ability to effectively oversee management.
The equity team engaged with the issuer in the fall of 2020 to express support for the 30% Club Canada initiative and to encourage the board to recruit more women as a top-down approach to improving gender diversity in the software industry.
The equity team also expressed the desire to see the roles of CEO and board chair separated to achieve a best practice in corporate governance that would indicate to the market strong board oversight of management.
Since engagement, the company appointed four new women to the board and also began reporting employee gender statistics by region.
The company split out the roles of CEO and board chair to provide more robust oversight of management by the independent board.
As a result of these changes, one of our sustainable research vendors upgraded the issuer from a B to a BBB grade.
The case studies shown here are for illustrative purposes only; do not represent all of the investments made, sold, or recommended for client accounts; and should not be considered an indication of the ESG integration, performance, or characteristics of any current or future Manulife Investment Management product or investment strategy.
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