ISS Backs Parkland's Governance Overhaul Amid Simpson's Control Struggle

In a high-stakes corporate governance battle, Institutional Shareholder Services (ISS) has thrown its weight behind a partial overhaul of Parkland Corporation’s board while raising red flags about Simpson Oil’s aggressive control efforts. The proxy advisory firm’s recommendations, issued in early 2025, underscore a deepening divide between Parkland’s entrenched leadership and Simpson’s minority stakeholder, which seeks to replace the incumbent directors entirely.

ISS’s Split Stance: Balancing Accountability and Control

ISS’s formal recommendations urge Parkland shareholders to vote for six of Simpson Oil’s nine director nominees on the GOLD proxy card, including figures like Monty Baker (former PwC partner) and Karen Stuckey (ex-Walmart executive). However, ISS explicitly rejects Simpson’s demand for full control, warning against the risks of a board dominated by nominees with direct ties to Simpson’s interests or conflicts of interest. The advisory firm also opposes retaining legacy directors like James Neate, stating their continued presence would perpetuate governance failures.

ISS’s rationale hinges on Parkland’s systemic mismanagement:
- A “troubling pattern of decision-making” by the current board, including tactics to disenfranchise shareholders (e.g., accelerated AGM timing, refusal to adopt universal proxy rules).
- Poor financial performance, with Parkland’s total shareholder return underperforming peers by 85.7% since 2019.
- CEO succession failures, such as the board’s inability to evaluate external candidates during a period of underperformance.

Governance Failures at Parkland: ISS’s Key Criticisms

ISS paints a damning picture of Parkland’s governance culture:
1. Entrenchment Over Accountability:
The board’s focus on retaining control—such as excluding Simpson’s nominees from critical discussions—has eroded trust. ISS cites Chair Michael Jennings and Governance Committee members Nora Duke and Richard Hookway as complicit in these failures.

1. Strategic and Operational Stumbles:
   Parkland’s Burnaby Refinery shutdowns and weak U.S. operations have exacerbated financial struggles. ISS notes that leadership’s reactive approach to these challenges (e.g., launching a strategic review only after activist pressure) underscores a lack of foresight.

2. Lack of Independent Oversight:
   While Parkland claims a “supermajority of independent directors,” ISS argues that only a boardroom overhaul—not incremental changes—will address governance gaps. The advisory firm stresses that retaining Simpson’s nominees while maintaining a majority of Parkland’s slate would “preserve entrenchment” and fail to unlock shareholder value.

Simpson’s Nominees Under Scrutiny

Simpson’s slate faces skepticism over qualifications and independence:
- Conflicts of interest: Two nominees work for the Simpson Group, and one is a banker from Parkland’s lead bank.
- Limited public-company experience: Candidates like Marc Halley (Simpson Group investment manager) and Jackie Doak (Dart Enterprises director) lack expertise in Parkland’s complex global operations.
- Past governance breaches: Simpson’s prior nominees bypassed proper processes to privately solicit bids, undermining fair negotiations for all shareholders.

ISS’s partial endorsement of Simpson’s nominees reflects a middle ground: shareholders should demand accountability but avoid handing control to a group with a “narrow financial agenda”—as Simpson has been accused of prioritizing tax benefits and personal gains over long-term value.

Shareholder Voting Dynamics: A Crossroads for Parkland

The May 6, 2025 AGM will decide Parkland’s fate. ISS and Glass Lewis urge shareholders to:
- Vote GOLD for Simpson’s six nominees to inject fresh leadership.
- Reject Simpson’s full slate due to conflicts and lack of independence.
- Oppose Parkland’s incumbent nominees who have failed to address governance flaws.

Parkland’s management, meanwhile, pushes for a 13-member board with three Simpson representatives—Gibson, Stuckey, and Christiansen—to balance continuity and change. This compromise, however, faces ISS’s criticism that it “concedes the need for reform but underdelivers”, leaving systemic issues unresolved.

Strategic Implications: Value Creation or Value Destruction?

The outcome of this proxy fight will determine whether Parkland can pivot from underperformance to growth. Key considerations:
- Independent oversight: A refreshed board with expertise in energy, M&A, and governance is critical to executing Parkland’s Strategic Review—a process currently led by an independent Special Committee.
- Shareholder alignment: ISS warns that Simpson’s control without a premium would “disenfranchise minority investors”, as the group’s 19.8% stake lacks majority backing.
- Long-term viability: Parkland’s 26-country operations and $40B revenue base require leadership capable of balancing global risks and opportunities—qualities ISS argues are lacking in both slates unless a majority refresh occurs.

Conclusion: A Vote for Accountability, Not Control

ISS’s recommendations crystallize a pivotal moment for Parkland shareholders. By voting for Simpson’s six most qualified nominees while rejecting full control, investors can push for governance reforms without empowering a faction with “a narrow financial agenda”. Data underscores the urgency: Parkland’s stock has lagged peers by nearly 85% since 2019, and its Burnaby Refinery struggles highlight operational missteps that demand accountability.

While Parkland’s management claims its board is “experienced and independent”, ISS’s detailed analysis reveals a pattern of entrenchment that only a majority board refresh can address. The May 6 AGM is a chance to realign leadership with shareholder interests—a choice between incremental change and meaningful accountability. The latter, supported by ISS and Glass Lewis, offers the best path to unlocking Parkland’s potential.

Data queries and visualizations can be generated via financial platforms like Bloomberg, Reuters, or Parkland’s investor relations site.