Restaurant Brands International Inc. | Independent board chair at Restaurant Brands

Status
22.54% votes in favour
AGM date
Previous AGM date
Proposal number
11
Resolution details
Company ticker
QSR
Lead filer
The Accountability Board
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
Canada
Resolved clause
RESOLVED: Shareholders ask the Board to adopt a policy, and amend the bylaws as necessary, to require the Board Chair to be an independent director. The policy may provide that (i) if a Chair at any time ceases to be independent, the Board shall replace the Chair with a new, independent, Chair; (ii) compliance with this policy is waived if no independent director is available and willing to serve as Chair; and (iii) that the policy shall apply prospectively so as not to violate any contractual obligation existing at its adoption.
Supporting statement
SUPPORTING STATEMENT: Dear fellow shareholders,

J. Patrick Doyle is not an independent director, yet chairs RBI’s Board.

By contrast, many RBI competitors—including McDonald’s, Wendy’s and Yum! Brands—have independent Chairs. And indeed, having a non-independent Chair can weaken a corporation’s governance, harm shareholder value, and has been increasingly falling out of practice.

According to the 2022 Canada Spencer Stuart Board Index (CSSBI): Over three-quarters (79) of the CSSBI 100 board chairs in 2022 were serving as non-executives (distinct and separate from the CEO and/or executive chair roles), “following a long-standing governance practice of Canada’s large public companies.” And most (85%) of the non-executive board chairs were independent in 2022.

The shift toward board Chair independence makes sense, considering that management’s most important role is to effectively run the company and the board’s is to effectively provide oversight of management, so a lack of checks and balances may arise when the board is chaired by executive management.

As RBC says: “It is a matter of good governance practice that an independent director be appointed to the position of chair of the board of directors” and “[a]n independent chair is one of the primary mechanisms by which board independence is maintained.”

Similarly, “The chair of the board should ideally be an independent director,” reports Institutional Shareholder Services (ISS), “to help provide appropriate counterbalance to executive management.”

And reports Glass Lewis: “Glass Lewis’ view is that shareholders are better served when the board is led by an independent chair, a role which we believe is better able to oversee the executives of the Company and set a pro-shareholder agenda without the management conflicts that exist when a CEO or other executive also serves as chair. This, in turn, leads to a more proactive and effective board of directors.”

“We believe that the presence of an independent chair fosters the creation of a thoughtful and dynamic board not dominated by the views of senior management,” concludes Glass Lewis.

We agree—and think that to modernize the company’s corporate governance structure moving forward, it ought to be chaired by an independent director.

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