Beedie hosts panel event on role of investors in addressing inequalityMar 03, 2017
The widening gap between rich and poor is a global phenomenon affecting both developed and developing economies, and has been identified by the World Economic Forum as the single most important risk facing the world over the next decade in its annual Global Risks Report. But how can we reverse this trend, and to what extent can – or should – investors be responsible for instigating that change? This question was at the heart of a lively panel debate at Shared Prosperity: The Role of Investors in Addressing Inequality, an event hosted by the Beedie School of Business on February 23, 2017.
The event, organized by the SFU Centre for Corporate Governance and Sustainability, SHARE (Shareholders Association for Research & Education), and the United Nations-supported Principles for Responsible Investment (PRI), brought together an international panel of experts at the Segal Graduate School in Vancouver to examine inequality and our response to it.
Stephanie Bertels, Director of Beedie’s Centre for Corporate Governance and Sustainability, moderated the event, and first invited panel members to present opening remarks on the subject. The first speaker, Katherine Ng, Head of Academic Research at Principles for Responsible Investment (PRI), presented data quantifying the increasing disparity of wealth and income between rich and poor globally. She also showed that high levels of economic inequality inhibit growth, providing a motivation for investors to address the problem – while noting that it is not an issue that can be fixed by investors alone.
Shannon Rohan, Director of Responsible Investment with Shareholder Association for Research and Education (SHARE), explained how her organization is working with investors to help them hold companies in which they invest accountable and encourage better employment practices. According to Rohan, actions shareholders can take include seeking better disclosure on workplace practices, demanding improvements, and including workplace practice metrics in investment decisions.
The lack of data and disclosure around employment practices was also identified as a significant barrier to progress by Lisa Nathan, Campaigns Manager with the UK’s Shareaction organization. One of Shareaction’s programs is trying to tackle this issue by campaigning for publicly traded businesses on the London Stock Exchange’s FTSE100 index of its largest companies to sign up to a voluntary standard on living wages and, with over 30 companies now accredited, the movement is now entering the mainstream. Nathan also stressed the common interest that investors share with society at large in tackling inequality, which limits overall growth and leaves all but a very few worse off.
Providing an investor’s perspective on the issue was Jason Milne, Vice President, Corporate Governance & Responsible Investment with RBC Global Asset Management. For Milne, employee practices only become part of an investment decision when they affect share prices or highlight wider failures of company management – and inequality is simply not a material issue for most investments. While recognizing the importance of the problem, Milne sees government action through regulation as the most effective way to address inequality.
The final panel member, Damon A. Silvers, Director of Policy and Special Counsel with AFL-CIO, drew on his experience as a pension fund trustee and a senior advisor to US governmental committees in the aftermath of corporate failures of Executive Life, Enron and WorldCom, and the global financial crisis of 2008. These experiences taught him that “workers are the losers when anything goes,” and he shared fascinating insights and examples of the damage that inequality causes, not only to those at the bottom, but in destroying value and limiting growth for all.
After a spirited debate the event concluded with audience questions, and the opportunity for continued networking and discussions.
Click here to see photographs from the event.