Investors recently announced filing of shareowner resolutions at several corporations with board members who also sit on the Board of the U.S. Chamber of Commerce, challenging these corporate boards to review their policies and oversight of political expenditures, especially through trade associations. The first filings are at Accenture, IBM, Pepsi and Pfizer.
The filers believe each of these companies has strong corporate governance records and is understandably proud of its leadership in corporate responsibility. In addition, IBM, Pfizer and Pepsi have strong vendor standards policies holding their suppliers to high standards of conduct through audits and engagement. However, according to Timothy Smith, Senior Vice President of Walden Asset Management and one of the lead sponsors of the resolutions:
Yet as Board members and major corporate contributors to the U.S. Chamber of Commerce they play a passive and compliant role, remaining silent while the Chamber reportedly poured $75 million into the 2010 election while working to unseat any member of the U.S. Congress who voted in favor of healthcare reform. The Chamber also works vigorously against legislation and regulation on climate change and financial reform. Ironically, the Chamber works to undercut the very leadership these companies demonstrate on sustainability.
Adam Kanzer, General Counsel at Domini Social Investments and a filer of the resolution at IBM, said:
The Chamber of Commerce is an aggressively partisan organization that is standing in the way of solutions to our nation’s most pressing problems, from health care to climate change. We are asking why these companies would lend their good names—and their implicit endorsement— to the Chamber’s agenda, which often runs contrary to their own, stated policies and practices. We are simply asking them to do what directors are supposed to do – ask hard questions and exercise meaningful oversight.
The resolution sponsors argue that a company serving on the Chamber’s Board can be widely perceived as supporting and promoting its policies and programs, which can have a negative impact on a company with a strong reputation for good governance and corporate responsibility, since the Chamber’s own website says:
Directors determine the U.S. Chamber’s policy positions on business issues and advise the U.S. Chamber on appropriate strategies to pursue. Through their participation in meetings and activities held across the nation, directors help implement and promote U.S. Chamber policies and objectives.
The resolution is also expected to be filed with several other companies on the Chamber’s Board, which has over 100 members including, AT&T, Caremark, Caterpillar, Deere & Company, Dow Chemical, FedEx, JPMorgan Chase & Co., UPS, and Xerox. Stephen Viederman of the Christopher Reynolds Foundation, one of the sponsors of the Pfizer resolution said,
As Chamber Board members these companies need to stand up and be counted; clarifying which side they are on. If they differ with the political positions of the Chamber, they need to speak out and make their positions clear.
Controversy about the Chamber’s role in thwarting environmental and climate change legislation led Nike to withdraw from the Board; and PG&E, Exelon, Apple and Levi Strauss to withdraw their Chamber memberships in 2009. In addition, several local Chambers of Commerce have withdrawn their national affiliation.
To date, the 25 filers of these resolutions include a broad range of investors, including Walden Asset Management, Domini Social Investment, the Christopher Reynolds Foundation, Catholic Health East, Catholic Healthcare West, Green Century Balanced Fund, the Funding Exchange, the Needmor Fund, Missionary Oblates of Mary Immaculate, Sisters of Notre Dame Toledo Province, Catholic Healthcare East, the Tides Foundation, Boston Common Asset Management, Zevin Asset Management as well as several individual investors. The list of filers is expected to expand as the proxy season progresses.
I encourage readers to support these resolutions and consider filing their own wherever there are gaps, following the example of the SIF members mentioned above, Shareowner Resolution. Not sure how to file? Sign up for a free class with USPX.
Ron Freund, of the Social Equity Group, wonders if similar resolutions should be placed at major TV owners requesting policies which prohibit political ads from non-disclosed donations.