Canadian Pensions Championing Change?

Mark Machin, President & CEO of Canada Pension Plan Investment Board (CPP Investments) has been named a 2020 Catalyst Honours Champion for delivering a progressive workplace that advances women into leadership:
“On behalf of the Board of Directors and CPP Investments’ employees, I congratulate Mark on this important, well-deserved recognition,” said Heather Munroe-Blum, Chairperson, CPP Investments. “Under Mark’s leadership, CPP Investments has taken a prominent lead in advancing gender equity with real results, creating long-term value for the CPP Fund, and ultimately for CPP contributors and beneficiaries,” she added.

CPP Investments achieved its business goal of equal representation of women in hiring in 2019 and women now represent 46% of its global workforce. At present, 36% of the organization’s Senior Management Team and more than half of its Board members are female.

To influence the number of women on the boards of companies in which it invests, CPP Investments introduced a new Global Board Gender Diversity Voting Practice in 2019. Through this initiative, CPP Investments votes against the chair of the nominating committee at investee public companies if the board has no female directors and there are no extenuating circumstances; during the 2019 proxy season, it voted against the election of 626 directors globally.

“Attracting, developing and retaining talented women is particularly important to CPP Investments’ success as a high-performing global organization,” said Mr. Machin. “I’m honoured to receive this award from Catalyst, which is great recognition of the entire organization’s commitment to diversity. It also acknowledges the outcomes we are delivering not only within CPP Investments but also in the organizations in which we invest,” he added.

The Catalyst Honours 2020 conference, and formal recognition of champions, takes place virtually over three days beginning October 6th, 2020, in Toronto.

“We salute Mark Machin for setting the pace for investors globally who believe in the power of gender diversity as a critical contributor to superior business outcomes,” said Tanya van Biesen, Executive Director, Canada, Catalyst.

Mark Machin is one of six Canadian executives receiving the honour.
Mark Machin deserves this honor as he has done a lot to hire and promote more women at CPP Investments at all levels and to improve the representation of women on the boards of the companies they invest in.

Women now represent 46% of the global workforce and more importantly, 36% of the organization's Senior Management Team.

More than half the board members are women but I don't consider this an achievement per se because the Act that governs CPP Investments explicitly states for equal representation of men and women on the board and that will never change.

Canadian pensions have all been promoting diversity and inclusion recently:

This is just a small sample, not all of Canada's pensions have a presence on Twitter (they should) but others are posting similar messages on LinkedIn and in their annual report.

Diversity & inclusion are very hot themes this summer following the death of George Floyd and the ensuing BLM protests in the US demanding more racial equality.

On Friday, we lost John Lewis, a towering figure of the civil rights movement and a longtime US congressman. Lewis died at age 80 after a long battle with cancer.

President Obama wrote a beautiful statement to express his sorrow and admiration of Rep. Lewis:
America is a constant work in progress. What gives each new generation purpose is to take up the unfinished work of the last and carry it further — to speak out for what’s right, to challenge an unjust status quo, and to imagine a better world.

John Lewis — one of the original Freedom Riders, chairman of the Student Nonviolent Coordinating Committee, the youngest speaker at the March on Washington, leader of the march from Selma to Montgomery, Member of Congress representing the people of Georgia for 33 years — not only assumed that responsibility, he made it his life’s work. He loved this country so much that he risked his life and his blood so that it might live up to its promise. And through the decades, he not only gave all of himself to the cause of freedom and justice, but inspired generations that followed to try to live up to his example.

Considering his enormous impact on the history of this country, what always struck those who met John was his gentleness and humility. Born into modest means in the heart of the Jim Crow South, he understood that he was just one of a long line of heroes in the struggle for racial justice. Early on, he embraced the principles of nonviolent resistance and civil disobedience as the means to bring about real change in this country, understanding that such tactics had the power not only to change laws, but to change hearts and minds as well.

In so many ways, John’s life was exceptional. But he never believed that what he did was more than any citizen of this country might do. He believed that in all of us, there exists the capacity for great courage, a longing to do what’s right, a willingness to love all people, and to extend to them their God-given rights to dignity and respect. And it’s because he saw the best in all of us that he will continue, even in his passing, to serve as a beacon in that long journey towards a more perfect union.

I first met John when I was in law school, and I told him then that he was one of my heroes. Years later, when I was elected a U.S. Senator, I told him that I stood on his shoulders. When I was elected President of the United States, I hugged him on the inauguration stand before I was sworn in and told him I was only there because of the sacrifices he made. And through all those years, he never stopped providing wisdom and encouragement to me and Michelle and our family. We will miss him dearly.

It’s fitting that the last time John and I shared a public forum was at a virtual town hall with a gathering of young activists who were helping to lead this summer’s demonstrations in the wake of George Floyd’s death. Afterwards, I spoke to him privately, and he could not have been prouder of their efforts — of a new generation standing up for freedom and equality, a new generation intent on voting and protecting the right to vote, a new generation running for political office. I told him that all those young people — of every race, from every background and gender and sexual orientation — they were his children. They had learned from his example, even if they didn’t know it. They had understood through him what American citizenship requires, even if they had heard of his courage only through history books.

Not many of us get to live to see our own legacy play out in such a meaningful, remarkable way. John Lewis did. And thanks to him, we now all have our marching orders — to keep believing in the possibility of remaking this country we love until it lives up to its full promise.
What does all this have to do with pensions, diversity & inclusion?

Well, we all live in a society and those in power have important choices to make, defining choices which shape our society in profound ways.

People in power can no longer pay lip service to gender, racial and other equality, not in the age of social media, not if they want to be part of a better, more progressive future.

Sure, they can ignore social issues but I firmly believe true leaders are people who are fearless and aren't afraid to take a stance on important issues, even if it means facing harsh criticism from within the ranks.

Moreover, let there be no doubt, organizations which promote diversity & inclusion at all levels of their organization will come out ahead in more ways than we can imagine over the next decade.

Those that don't will fall behind and this represents a huge risk for pensions with a long investment horizon.

So my message in this short post isn't to criticize Canada's large pensions for not doing enough to hire and promote more women, visible minorities, LBGTQ members, aboriginals and people with disabilities at their organization.

My message is simply to remember people like John Lewis, Martin Luther King and countless other "champions of change" who have shaped our society in profound ways and remember that with great power comes great responsibility. Saying you want change isn't the same as taking action to make that change happen.

Like President Obama states, America is a constant work in progress, so are pensions and other organizations that make up the fabric of our society.

So, as we remember Congressman John Lewis, let's also remember the message he and other giants have taught us, namely, that the struggle for a more just and equal society is worth it but it's far from easy and there will be plenty of roadblocks along the way.

We should all espouse a more progressive workplace that advances women into leadership but not just women. We need to take a hard look at workplaces and ask ourselves hard questions as to why we aren't seeing a better reflection of our society at all levels of each organization.

Below, Rep. John Lewis, a Civil Rights hero, died of pancreatic cancer Friday night. A supporter of civic engagement, including the ongoing global Black Lives Matter protests, Lewis had been beaten and arrested several times during the Civil Rights Movement. Known for powerful speeches, he advocated for getting into “good trouble” all his life. He was awarded the Presidential Medal of Freedom in 2011. Watch this clip to learn more about this iconic civil rights figure.

Update: Michel Leduc, Senior Managing Director - Global Head of Public Affairs & Communications at CPP Investments, shared this with me after reading this comment:
Another insightful, timely and “au courant” blog – thank you.

Just a quick clarification. In your summary you note that the CPP Investment Board Act provides that:
“More than half the board members are women but I don't consider this an achievement per se because the Act that governs CPP Investments explicitly states for equal representation of men and women on the board and that will never change.”
However, I am not aware of such a statutory requirement.

To the best of my knowledge – in my efforts to closely be following the work of our Board of Directors – gender (and other forms of diversity) is a matter of business/governance conviction. My understanding is that the Act would in fact support a very uniform Board.

Irrespective of legislation, diversity is a deliberate, methodical choice by the Board with a view to optimal governance of a national Fund that invests in 50+ countries on behalf of one of the most diverse countries in the world. Clearly, broad perspectives from wide experiences and backgrounds is needed to oversee the organization as it works hard to deliver above-average returns in a world fraught with risk.

Narrow thinking, in our context, is tantamount to disaster.
I thank Michel for his insights and obviously stand corrected. When I worked at PSP Investments years ago, someone at the Treasury Board told me the Acts that govern CPPIB and PSP demand equal gender representation on the board of directors. I guess I was wrong about that.