Colette Murphy is the Executive Director of the Atkinson Foundation. She made these remarks as a participant in the Canadian Capital Stewardship Network’s webinar on the power of proxy voting. You can find a recording of the webinar here.
I really appreciate this invitation from the Canadian Capital Stewardship Network to participate in this conversation. Thank you, Shannon and the rest of the SHARE team, for organizing it. And thanks to all of you for making it a priority today. What we have in common is a commitment to investing workers’ capital in ways that uphold their rights and the interests of their families and their communities.
I don’t need to tell you why this mission is important. Even more important in the midst of a pandemic than it was when the network was launched in February. You know that workers, their families and all of our communities are experiencing unimaginable pressure. Our economy is in a “medically-induced coma.” At least that’s what the Armine Yalnizyan calls it. She’s an economist and the Atkinson Fellow on the Future of Workers. Everyone must ask themselves what power they have to help the planet move from an acute situation to one we can manage over time.
Shareholders like you and me are in a position to keep workers at the centre of the corporate calculus. And to make sure that workers are not the biggest casualties of an economy in a terribly painful transition.
As an investor, Atkinson is concerned with corporate transparency. We want to see how the companies in our portfolio treat workers. We also want to know how they perform relative to their competitors. In this way, our money is aligned with our philanthropic mission to challenge inequality by creating more decent work and a fair economy.
I’ve been asked to tell you about a shareholder action we took last year with SHARE’s help. It was focused on the rights of Tim Horton’s workers. Let me start with a short clip from an American late-night TV show from a couple of months ago.
In this clip, Trevor Noah, host of the American news satire program The Daily Show, pokes fun at how upset people were on social that Prime Minister Trudeau bought ‘elitist’ donuts from an independent bakery in Winnipeg instead of going to the local Tim Hortons for a more economical option. Trevor emphasizes that far from being “local”, Tim Hortons is a giant corporation.
Comedic exaggerations aside, Trevor Noah shows us how the economy works — and how it could work differently.
It’s true that Tim Hortons’ parent company Restaurant Brands International — or RBI as it’s known — is majority owned by a Brazilian hedge fund, 3G Capital.
But it’s also true that many franchises are owned by Canadians and many Canadians hold RBI stock — including the Atkinson Foundation.
A year before the Doughnut-Gate scandal broke in Winnipeg — almost to the day — I put forward Atkinson’s shareholder proposal at the RBI AGM. We asked the company to disclose how it creates work that is decent and dignifying across its 26,000 franchises.
We invited a staff member with the Workers’ Action Centre to come with us. WAC is a long-time partner of ours and a relentless decent work activist. They’ve been organizing alongside Tim Horton’s workers for better workplace practices/ — such as paid breaks, benefits and an end to short-term shift scheduling.
Now, you should know that this was the first time I had ever attended a corporate AGM let alone spoken at one. You can usually find me engaging elected officials /and public servants to advance workers’ rights through the public policy development process. At Atkinson, we use our power as active citizens daily in countless ways, but have opted to give our proxy to SHARE instead of making proposals directly in the past.
I really didn’t expect to win the vote when we walked into the meeting that day. But I did expect to light a fire under complacent executives. When the votes were tallied, 66% of independent shareholders voted in favour of our proposal. This outcome could not go unnoticed or be dismissed. It was a clear sign that decent work matters to Canadians who own shares in companies. To Canadians who operate businesses. And to Canadians who are employed by them.
As you might imagine, RBI recommended shareholders vote against the proposal. The majority shareholder, 3G Capital, voted against us resulting in an overall vote of 25.8 percent. This result sets the stage for our next proposal.
Since the vote in 2019, the company hasn’t yet provided any of the information requested in the proposal. Nor have they made a commitment to address these issues. It’s unusual for a company to not respond to majority votes of independent shareholders.
We don’t know why they haven’t responded. We can imagine that they simply don’t know how to engage such a reasonable proposal. What we know for sure is that we’re not going away even if that’s their preferred outcome. We’re ready to add fuel to the fire and to encourage more shareholders to give oxygen to it.
Atkinson had a very different experience when we filed our first-ever shareholder proposal a couple of months earlier. Before going to a vote, the bank RBC signalled a willingness to respond directly to the workforce issues we raised — so, we withdrew the proposal.
With SHARE’s support, Atkinson is taking two more steps on the RBI file in spring 2020.
First, we have refiled the same proposal asking RBI to disclose how it ensures minimum standards for decent work in its franchises. We’re shooting for an even higher vote among independent shareholders.
Second, we will recommend that shareholders withhold their votes for the Chair of the Nominating and Corporate Governance committee. This vote is an opportunity to send a clear signal that shareholders will not accept the Board’s failure to respond to shareholders’ concerns.
There’s no question RBI continues to feel intense heat these days from all sides — not only its shareholders. At the start of the COVID-19 lockdown, Tim Horton’s was called out in the national media for requiring sick notes from employees. They quickly reversed this policy and announced a $40 million relief fund for their workers. They also offered up to two weeks of scheduled pay for hourly staff.
These are moves in the right direction but far short of the comprehensive plan they should have in place — especially as we move through this difficult transition to a more inclusive,/ sustainable/ and productive economy post-pandemic. Shareholders like us have to continue to use our power to make sure we get to this outcome.