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Tabatha Bull, president of the Canadian Council of Aboriginal Business, stands in a schoolyard near her home in Toronto on April 1, 2021.

Galit Rodan/The Globe and Mail

TMX Group Ltd. is heeding the call of an investor to take a stand on Indigenous inclusion – a move that will spark change across this country’s capital markets.

Canada’s largest stock exchange operator is endorsing the most recent version of the Atkinson Foundation’s shareholder proposal on Indigenous inclusion, and is advising its other investors to vote for the resolution at its annual meeting next week. TMX’s decision comes after it held talks with the Shareholder Association for Research and Education (SHARE), which represented the Atkinson Foundation on the matter. The charitable foundation focuses on social and economic justice.

TMX’s progressive position will create a ripple effect in capital markets. Not only is it rare for publicly traded companies to recommend that investors ratify shareholder proposals, but the move is believed to be the first time that a North American corporate board of directors is urging investors to support an investor resolution about Indigenous inclusion. Since the company runs both the TSX and the TSX Venture Exchange, its stand will put much-needed pressure on other publicly traded companies to follow suit.

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By advocating for the current proposal, TMX is agreeing to develop internal programs and polices that foster equity and inclusion for Indigenous employees and govern its relationships with Indigenous communities. It is also committing to review its procurement from Indigenous-owned businesses (along with those owned by members of other underrepresented groups) and engage with Indigenous organizations and other external groups to show shareholders it is meeting its commitments.

The resolution will be put to a shareholder vote on May 12, but TMX says it will follow through on the proposal no matter the result and is already talking to the Canadian Council for Aboriginal Business (CCAB) about its goals.

If you’re skeptical of corporate diversity efforts, you’re hardly alone. But in this case, it would be wrong to underestimate the significance of TMX’s decision and its influence on capital markets. If TMX leads, other financial services companies will follow and so will public companies in other sectors.

TMX chief executive officer John McKenzie is adamant this is the floor, not the ceiling, of the company’s commitment to Indigenous inclusion.

“Our ambition is to do better,” Mr. McKenzie said in an interview.

”It’s a good example of when shareholders and companies can actually have the opportunity to work together on their common interests. You can actually get to a better outcome,” he later added.

Although there is recognition that investors value more than just financial returns, public companies often get stuck on issues such as this because of misconceptions about their ability to deliver on such goals. “I think that’s what sometimes makes it a challenge,” Mr. McKenzie said.

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Companies shouldn’t be floundering on Indigenous inclusion. The Truth and Reconciliation Commission’s call to action No. 92 provides a practical starting point. It takes less than a minute to read. Even so, progress has been slow.

Procrastination is no longer an option. Companies that stall risk chasing away top talent and investment, because both employees and shareholders expect measurable goals.

“It’s no longer enough to say good things in an annual report. You’ve got to start showing that you’re making progress and actually giving us numbers, getting independently certified, being audited – whatever it may take to demonstrate that this is for real and it is not just PR,” SHARE CEO Kevin Thomas said.

“When the owner of the Toronto Stock Exchange supports a proposal like this, that does send a signal to Canadian capital markets as a whole that we can all work to improve Indigenous inclusion.”

SHARE is also engaging with other financial services companies about Indigenous inclusion. It plans discussions with CI Financial Corp., and recently withdrew a shareholder proposal at Sun Life Financial Inc. after the insurer agreed to join the CCAB’s Progressive Aboriginal Relations program.

That certification program, known as PAR for short, offers a phased process that helps companies build a comprehensive Indigenous-relations strategy. Its roster of gold level companies includes Bank of Montreal , Bank of Nova Scotia , Suncor and Cameco . It also offers a program for small business.

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“People are afraid to ask the question or afraid to take that first step for fear of doing the wrong thing or saying the wrong thing,” CCAB president and CEO Tabatha Bull said. “That fear stalls all of our conversations and progress as a country.”

Beyond the issue of conscious and unconscious bias, many in Corporate Canada simply fail to grasp potential opportunities in the Indigenous economy.

Are our business leaders really that incurious about their own country?

As Ms. Bull points out, Indigenous people are the country’s fastest growing demographic and create businesses at nine times the rate of the average non-Indigenous Canadian.

For its part, TMX plans to seize on that opportunity by helping Indigenous businesses scale up and raise money, Mr. McKenzie said.

Ms. Bull, though, has a suggestion of her own for TMX and other market operators. She would love to see stock exchanges display the PAR certification level of every listed company so people have an easy way to make informed investing decisions.

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That’s a brilliant idea. Let’s hope TMX decides to take it up.

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