Investors for Paris Compliance cited two separate independent assessments by Transition Pathway Initiative and BloombergNEF that allege Toronto-Dominion is not on track to meet its net-zero commitment.Andrew Lahodynskyj/The Canadian Press
A shareholder advocacy group is calling on Toronto-Dominion Bank TD-T to launch an independent review of its board of directors after an investigation by U.S. regulators and law enforcement found it guilty of conspiracy to commit money laundering.
Investors for Paris Compliance, which aims to hold companies to account on climate action, filed a shareholder proposal Friday requesting TD to do an impartial investigation into its board governance policies and director-selection criteria. Shareholders are concerned the governance issues that contributed to the bank’s compliance failures are systemic, and could allow for other gaps that extend beyond money laundering, according to the group.
“In light of the bank’s recently exposed governance failures, we are looking for board accountability and renewal, including that new board members are properly qualified to manage major risks and opportunities,” Kyra Bell-Pasht, the group’s director of research and policy, said in an e-mailed statement.
Last month, TD pleaded guilty to conspiracy to commit money laundering and agreed to pay a penalty of more than US$3-billion to U.S. regulators and the Department of Justice. The Federal Reserve Board required TD to conduct an independent review of the bank’s board of directors and management.
TD said that it already intends to conduct a review.
“We are committed to sound corporate governance and regularly review our practices and policies to align with legal and regulatory expectations and industry best practices,” TD spokesperson Lisa Hodgins said in an e-mailed statement.
“As part of our recent resolution with the Federal Reserve Board regarding our U.S. AML program, we will conduct an independent third-party review of our corporate governance program. Plans are underway to fulfil this requirement and we will carefully consider any insights received as part of this review.”
The Investors for Paris Compliance proposal cited a BNN Bloomberg interview with Office of the Superintendent of Financial Institutions head Peter Routledge. In the interview, Mr. Routledge responded to a question about accountability on TD’s anti-money laundering failings by pointing to an opinion column in The Globe that said “TD board members have earned a black mark.”
The group’s proposal said the bank’s guidelines on corporate governance – which outline how the board operates – are unclear on how committee members are held accountable, and do not include consequences for underperformance.
Investors for Paris Compliance, which co-filed the proposal with Boston-based Green Century Capital Management, cited two separate independent assessments by Transition Pathway Initiative and BloombergNEF that allege TD is not on track to meet its net-zero commitment.
“Because it is difficult for a board to assess itself, shareholders request an external review of TD’s board governance policies and director selection criteria with a view to improving director accountability and competency for existing risks and emerging priorities like net zero,” the groups said in the proposal.