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Study by Responsible Investment Association finds companies have a financial incentive to make fair room for women

A new report from the Responsible Investment Association has found that four in five investors want to see women better represented on corporate boards in Canada, with even more hoping the companies they invest in pay women equal wages as men for the same work.

Both issues fall into the association's definition of responsible investment, which broadly takes into account environmental, social and governance factors in investment selection and management. The findings expand upon the obvious benefits of pay equity and inclusive corporate governance: when a company makes fair room for women, the RIA suggests, it could entice more investment.

"Progressive and well-managed companies seek to attract and retain the best employees and many of them are women. To be competitive, companies need fair employment policies," said Deb Abbey, the RIA's chief executive. "While Canadian companies are laggards in this regard, we're seeing more and more pressure on companies to pay equitable living wages to all of their employees."

The RIA's latest investor opinion survey, commissioned by responsible investment manager OceanRock Investments Inc., had 1,084 Canadian investors respond online over a week this past March, with a focus this year on gender diversity. Its release Thursday morning comes in tandem with an announcement that OceanRock will propose a resolution at next week's Restaurant Brands International Inc. annual meeting to adopt a policy to improve gender diversity on its executive and board.

Chief executive Fred Pinto said the move is in line with OceanRock's principles: to ensure that boards "have a diverse number of viewpoints to prevent groupthink and prevent undue management influence."

OceanRock, a shareholder of the corporate parent of Tim Hortons and Burger King restaurants, put forward a similar proposal last year. While it was rejected, RBI later added a woman to its previously all-male board: Cecilia Sicupira, a veteran of several South American boards. She is, however, also the daughter of Carlos Sicupira, co-owner of 3G Capital, RBI's largest shareholder – prompting observers such as Mr. Pinto to question her independence.

The RIA study, Mr. Pinto said, should offer proof to corporations such as RBI that adding more women to leadership roles is worth it. "We have to go beyond talk, and try to have some concrete action and plans," he said.

While the Ontario Securities Commission and other Canadian regulatory authorities enforce a "comply or explain" model for companies to disclose how many women are on their boards or executive, the RIA study suggests investors want businesses to go further. It found that three-quarters of investors believe companies should disclose how much women make versus men – and that 55 per cent would go so far as to sell their shares in a company if they discovered pay inequity.

There is, however, a hitch: while 77 per cent of respondents said they were interested in responsible investments, 73 per cent admitted to knowing little or nothing about them. This "awareness gap," said Dustyn Lanz, the association's chief operating officer, "points to a tremendous opportunity for financial professionals to educate themselves and their clients about responsible investing."

Mr. Lanz suggests the survey's results are a sign of growing public interest in socially responsible investing – especially in conjunction with other recent developments, such as the OSC's recent announcement that it was reviewing the state of climate-change-risk disclosures in Canada.

"Corporations could get ahead of the curve by enhancing reporting of information related to [environmental, social and governance] issues such as climate change, water scarcity, gender diversity, human rights and the supply chain," Mr. Lanz said. "These things can have financial implications, which means they're material factors for investors to consider."

Michael Babad and Jacqueline Nelson discuss women and corporate culture

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