One topic has arisen in this year’s proxy statements that causes me a considerable amount of distress. In a way, we’ve kind of moved from shareholder democracy to what I now call institutional autocracy. We got people making binary decisions on the qualifications of certain directors in publicly traded companies. One great example is in a widely held and perhaps the most successful Canadian public company of all time, a female was being proposed on the board of directors to enhance the representation of females on that board. She was also nominated to be the chairman of the HR committee and the governance committee, but was rejected because there weren’t enough women on the board.

So you reject a female candidate from the board because she chairs a committee that didn’t create enough female positions on the board, and some 28% of the votes were withheld from that candidate in this director election. I cannot understand that. And to make matters worse, no one phoned the company to have a chat with anybody, the corporate Secretary, the Chair, the CEO, the director involved. These are decisions made by these organizations who measure on a binary scale: Yes – No.

As a person being in the position for more than twelve years, if yes, vote against them. If they’ve been older than 75 years old, vote against them. We should be able to go beyond this kind of binary bifurcation. Yes – No. To understand the more subtle nuances of creating a board of directors, as I said before, this company is probably the most successful, publicly traded company in the last 25 years.

And to have that kind of institutional autocracy just voting against people because of some rule they have established is, to me, simply not acceptable.

David Beatty is an adjunct professor and Conway chair of the Clarkson Centre for Business Ethics and Board Effectiveness at the Rotman School of Management. Over his career, he has served on more than 39 boards of directors and been chair of nine publicly traded companies. He was the founding managing director of the Canadian Coalition for Good Governance (2003 to 2008). A version of this article will also appear in the Winter 2017 edition of Rotman Management, published by the University of Toronto’s Rotman School of Management.