Shareholders with big stick

Availability at SRI Conference

srilogo_25_wo_thJames McRitchie, the publisher of Corporate Governance and one of three retail shareowners accused in the New York Times of holding Corporate America ‘hostage,’ will be in Colorado Springs November 8th through the 12th, attending the SRI Conference on Sustainable, Responsible, Impact Investing.Shareholders with big stick

I am eager to meet with readers to discuss activist corporate governance strategies and how we can work together. Outlined below are some projects I’m working on. If you’d like to discuss any of them or other possible areas for cooperation, please contact me prior to the SRI conference. Additionally, I am always interested in guest posts. Reach out to thousands, especially our under-covered readers in Beijing and India. 

confidentialProxy Vote Disclosure

Pension funds have disclosed their proxy votes for many years. Since 2003, investment advisers and mutual funds have also been required to disclose. Unfortunately, many do not make accessing this information easy and few, if any, provide any analysis of how their votes compare with others. SRI funds have led the way. See, for example, how compares fund voting in four basic issue areas. What are best practices? Shouldn’t they include advance disclosure?  

Advance Disclosures

Funds that announce their proxy votes in advance can influence other voters, some have even argued they have a fiduciary duty to so when they could influence the outcome. I am working with academics to find evidence supporting this notion. Funds using the ISS voting platform can simply tell ISS they want to disclose like Flordia SBA. Funds using the Glass Lewis platform can say they want to disclose like CalSTRS. So far, it is mostly SRI funds disclosing in advance. How do we get more mainstream funds to do so?

Take Our SurveyFund Surveys

The 1994 3rd Restatement of Trust Lawsubdivision (c)(8), encourages trustees to consider “an asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.” Some have argued these ‘special values’ could include clean air, clean water, healthy food, disclosure of political contributions. At some pension funds, members elect some trustees. Campaigns provide an opportunity for feedback on such issues. Survey mechanisms could help educate both trustees and members concerning ‘special values’ and proxy voting policies. What are best practices?

Kalpona Akter representing James McRitchie presents Proxy Proposal

Kalpona Akter at WalMart Meeting

Volunteers Willing to Present Proxy Proposals

SEC Rule 14a-8(h)(1) requires shareholders or their representative to present their proposal at the AGM. Traveling to each meeting can become burdensome. I am building an informal network of people willing to present proposals at local meetings. Most are from SRI, union and public pension funds. A network of such volunteers would make it much easier to propose corporate governance reforms at companies around the U.S., especially at small-cap companies.


About 90% of shareholders don’t bother to vote their proxies. An even larger number probably probably don’t contact their mutual or pension funds concerning how their funds are voting proxies in the ‘best interest’ of members and investors. How do we get individuals to care about proxy voting? This seems like the most fundamental issue of all. One of the best videos on this subject that I have seen come from the now defunct I’d like to learn of additional efforts.

Client Directed Voting (CDV) Platforms

Before going out of business, MoxyVote was attempting to set up a open CDV to enable retail shareowners to implement a proxy voting policies similar to those of most institutional investors. I am eager to learn of and contribute to similar efforts using websites or phone apps. 

Innovative Proxy Proposals

I’m always looking for innovations in proxy proposals. For example, we need more diversity on many boards, so the answer is board refreshment. Many look to just pushing out directors at a certain age or after a specific number of years. However, some of the best board members may be old or long-serving. Therefore, I have proposed (first at Costco) that at least two thirds of board members serve for less than fifteen years. That would at least begin to reduce the most serious levels of board entrenchment. I’m interested in learning of examples of other strategies.

Peabody: Foxhole Award Winner 2013 for Avoiding Shareholders

Foxhole Award Winner 2013 for Avoiding Shareholders

Foxhole AGMs

I have received several examples from readers of companies trying to avoid their shareholders by holding annual meetings in remote locations or at difficult times. I will wait until after the SRI conference to make the second annual foxhole award. If you have nominations, please let me know.

Tilted Voting Rules

Does anyone else care that proxy rules don’t apply to voter information forms?

Epistemological Issues

At the foundation of society are thoughts, ideas, and constructs of the mind. Central to our current condition in corporate governance is a common thread running through concepts such as fiduciary duty, the prudent man standard, and the SEC’s need to protect the markets from individuals. That thread is our misconception of man as homo economicus.

Social networks can provide the foundation for new, more inclusive versions of democracy that integrate work, investments and civil society by recognizing people as full human beings, rather than segmented bundles or economic robots. I’m interested in theories and data that will help expand currently narrow definitions to be more holistic and in social media mechanisms that facilitate participation in corporate decision-making by shareowners.

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