Calling on Canadian Trustees to ask their managers to support shareholder resolutions and vote recommendations at Chartwell, Amazon and Dollarama
On April 28 every year, the “Day of Mourning” honours workers who have been killed, injured, or suffered illness on the job. As waves of COVID-19 spread across Canada, this year’s “Day of Mourning” has brought the inadequate protections for frontline, low-wage, precarious – and often racialized – workers sharply into focus.
For institutional investors broadly, the past year has cemented an understanding that even vastly diversified equity portfolios are not insulated against a crisis of deepening inequality, leading to a proliferation of discussions on how to manage the systemic risks arising from the root causes of inequality.
Recognizing these risks, large asset managers such as BlackRock and State Street Global Advisors, who together manage over USD $12 trillion in assets, have emphasized that they will be looking for improvements from portfolio companies in areas such as labour standards and racial justice.
The challenge facing asset owners is how to take meaningful action to address systemic social risks within the confines of fund governance and investment oversight. One of the most immediate and accessible ways that trustees and investment committee members can do this is through their oversight of proxy voting.
Voting for the protection of workers
This proxy season, investors have an opportunity to support resolutions and vote recommendations that target the underlying reasons why so many frontline workers face significant health and safety risks from COVID-19. The resolutions profiled here address aspects of an interrelated set of factors: poor health and safety standards, precarious working conditions, and racial discrimination in the workplace.
Chartwell Retirement Residences
Nursing homes have been at the epicenter of the COVID-19 crisis in Canada, raising profound questions about the privatized for-profit model behind the essential work of caring for our elders. The pandemic provides clear evidence of the operational and reputational risks associated with poor working conditions and their link to the quality of resident care, with surveys showing that public confidence in for-profit long term care at an all-time low.
Chartwell, a for-profit nursing home, has seen over 50 facilities impacted by the virus and a death rate of 4.64 per 100 beds in Ontario as of December 2020 – well over the province’s average of 2.8 in non profit homes and 1.35 in municipal homes. Nonetheless, the company paid its top executives bigger bonuses than they received in 2019.
The Shareholder Association for Research and Education (SHARE) is asking Chartwell investors to take two actions in executing their proxy votes that target board oversight of workforce practices at the company’s AGM on May 20th.
First, SHARE is asking investors to vote for the shareholder proposal asking for greater transparency on human capital management (Unitholder Proposal No.1). The goal of the proposal is to allow investors access to information on Chartwell’s management of workforce-related risks and challenges, which would help assess the effectiveness of key workforce policies, and the robustness of its board oversight.
Second, SHARE is asking investors to withhold votes for Michael D. Harris as director. The reasoning is two-fold: Accountability for the company’s performance during the pandemic sits with the board of directors and Mr. Harris, chair of the board, has been a member of the board since 2004 – a tenure that makes it impossible to be considered an independent chair. Importantly, while shareholder resolutions are non-binding, a director that is not elected by a majority of the votes cast must resign, which sends a clear message to the board.
The logistics sector, which provides the infrastructure for online shopping, has become synonymous with the hardships endured by workers during COVID-19. Amazon has been under fire for its treatment of workers through the pandemic. The company responded to a recent union election at a warehouse in Bessemer, Alabama with a massive and expensive anti-union campaign, raising questions about how it views workers’ voice and interests in the context of the pandemic and uprisings against systemic racism.
The Canadian Capital Stewardship Network (CCSN) recommends investors vote in favour of Item 6 on the agenda for Amazon’s AGM on May 26 – a resolution co-filed by the New York State Common Retirement Fund and SHARE on behalf of the Catherine Donnelly Foundation. It asks Amazon to conduct a racial equity audit analyzing the company’s impacts on civil rights, equity, diversity and inclusion, and the impacts of these issues on its business. The resolution gets to the heart of the discrepancy between the company’s statements in support of racial justice and its actions, products and services.
A number of other shareholder resolutions, including one calling for the inclusion of an employee on the corporate board (item 10) and another requesting a report on risks related to anticompetitive practices (item 11), may be of interest to investors voting for a just pandemic recovery.
Sometimes called the “Amazon of the north,” Dollarama is Canada’s leading low-cost value retailer. The company reports that the majority of its warehouse and distribution staffing needs are outsourced to temporary placement agencies.
On a webinar CCSN organized in April 2021, former Dollarama worker Gaurav Sharma spoke about the dangerous conditions and lack of recourse that temporary agency workers face in the distribution centres. Mostafa Henaway from the Immigrant Workers’ Centre spoke about how using temporary agencies allows the company to outsource worker protections as well – all of which was exacerbated during the pandemic.
The CCSN invites investors to vote for a resolution requesting that Dollarama prepare a report outlining how it assesses and mitigates the human rights risks arising out of its use of third-party staffing agencies for its warehouse and distribution centre staffing needs. The resolution is being filed by BC Government and Service Employees’ Union (BC GEU) and the company’s AGM is expected to be held in June, 2021.
At the beginning of the pandemic, author Arundhati Roy wrote in the Financial Times: “Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next.” The past year has certainly illuminated the deep injustices and inequalities that permeate and edify global capital markets. Transforming the financial system is a herculean task, but proxy voting is a relatively simple yet powerful step along the way.
Summary of Vote Recommendations
Amazon.com, Inc. (AMZN)
- AGM: May 26 , 2021
- Vote FOR item 6: Shareholders of Amazon.com, Inc. (“Amazon”) request that the Board of Directors commission a racial equity audit analyzing Amazon’s impacts on civil rights, equity, diversity and inclusion, and the impacts of those issues on Amazon’s business.
Chartwell Retirement Residences (CSH.UN)
- AGM: May 20, 2021
- Vote FOR the shareholder proposal (proposal No. 1) on board oversight of the workforce.
- Withhold (vote AGAINST) the chair of the Board, Michael D. Harris.
Dollarama, Inc. (DOL)
- AGM: (Expected) June, 2021
- Vote FOR a resolution requesting that Dollarama prepare a report outlining how it assesses and mitigates the human rights risks arising out of its use of third-party staffing agencies for its warehouse and distribution centre staffing needs.
Coming soon: CCSN Proxy Preview Bulletin
To view the webinar Proxy Power: Voting for a Just Recovery, click here.