Canadian National Railway Co. CNR-T is coming under fire from shareholders and governance experts for failing to nominate any executives whose first language is French to its board of directors despite the fact the company’s headquarters is in Montreal.
The country’s biggest railway is proposing 11 candidates for its board ahead of the annual shareholders meeting scheduled for May 20. None are francophones and none are from Quebec, according to the company’s management proxy circular filed on Wednesday. Three of them will join the board as new directors if they are elected: Two are American and the other is Albertan.
Questions about the use of French in the boardrooms and executive suites of corporate Quebec have multiplied since last fall, when Air Canada chief executive officer Michael Rousseau made a speech in Montreal almost entirely in English. He later told reporters he has managed to live in the city for 14 years without learning French. In Quebec City and Ottawa, elected officials denounced what some called Mr. Rousseau’s contempt for French.
Maxime Chagnon, spokesperson for pension fund giant Caisse de dépôt et placement du Québec, which holds CN shares among $420-billion in net assets, on Thursday said: “The lack of francophone representation on the board of directors of a Montreal-based company that is also subject to the Official Languages Act is simply unacceptable.”
The Caisse rarely makes such public statements against the companies in which it invests, preferring to exchange privately with their leaders on matters of concern.
“We are extremely disappointed that CN is not taking into account this important aspect of its board’s composition, even though we have spoken to them on multiple occasions to encourage them to improve the representation of their stakeholders,” Mr. Chagnon said. “It is surprising that they did not find qualified francophone candidates living in Quebec.”
In an e-mailed statement on Thursday, CN spokesperson Jonathan Abecassis said the absence of francophone directors will be resolved over the next year as two current board members reach the end of their mandates. “We will correct this situation. The board of directors is highly aware of these issues,” he said, declining to comment further.
CN is coming off a tumultuous year in 2021, during which it tried unsuccessfully to block rival Canadian Pacific Railway Ltd.’s takeover of Kansas City Southern, a prized target with a network running through Mexico’s auto-manufacturing region and to both Mexican coasts. CN then faced a possible proxy battle from activist investor Christopher Hohn, who was unhappy with CN’s failed takeover bid and poor financial results.
Mr. Hohn called for the ouster of then-CEO Jean-Jacques Ruest, a bilingual businessman who joined CN in 1996, shortly after it was privatized, as well as then-chairman Robert Pace. Mr. Ruest has since left the company, and Mr. Pace is scheduled to retire next month. The activist’s main focus was pushing for more people at CN with North American railway experience.
CN announced several leadership changes in January, and Mr. Hohn agreed to drop plans for a proxy vote. The railway named Tracy Robinson, a former executive with CP and TC Energy, as CEO. The company also appointed former Quebec premier Jean Charest as a director, Shauneen Bruder as vice-chair, and said that no later than the 2022 annual meeting, it will appoint two new independent directors with railway experience to the board.
One of these two new candidates, Robert Knight, a former Union Pacific Railway executive, was part of Mr. Hohn’s slate announced last year. The other is David Freeman, a former BNSF Railway executive.
Ms. Robinson moved to Montreal and started as CEO on Feb. 28. She said in a previous statement that she has already begun French lessons “to ensure I am able to fully embrace the experience of living in Quebec and communicate with CN’s valued employees and customers across the continent.” She is the only one of the proposed board members who will be based in Montreal, according to the proxy circular.
Until recently, the CN board had at least two other French speakers in addition to Mr. Ruest, but they have also quit. Julie Godin, a senior executive at CGI Inc., was a CN director for several years, but left the board last fall. Mr. Charest stepped down from his CN commitment this year to run for the leadership of the Conservative Party of Canada.
A spokeswoman for Simon Jolin-Barrette, Quebec’s Minister Responsible for the French language, did not respond to a request for comment. The government has stressed in the past that the language of work in Quebec is French and has pledged to reinforce that with new language legislation it expects to be adopted ahead of a fall election.
“Diversity is beyond gender. It includes linguistics and it includes geography,” said Richard Leblanc, professor of law, governance and ethics at York University. “It’s a little embarrassing when you have Quebec-based organizations and you have a CEO who is not fluent in both languages and you have a board of directors that doesn’t have adequate representation of francophone Quebeckers. The signal could be that French-speaking employees and customers are second-class citizens because they’re not represented. And the query is: Why?”
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