Tag Archives | BlackRock

Jill Fisch: Index Funds Investors Can Switch

Jill Fisch, et al. addresses a central myth around index funds and investors in Passive Investors (June 29, 2018). Her research has implications applicable to recent analysis and recommendations by Delaware Supreme Court Chief Justice Leo E. Strine Jr., Professor Lucian Bebchuk and others.  The following is the central highlight:

Our key insight is that although index funds are locked into their investments, their investors are not. Like all mutual fund shareholders, investors in index funds can exit at any time by selling their shares and receiving the net asset value of their ownership interest. This exit option causes mutual funds – active and passive – to compete for investors both on price and performance. While the conventional view focuses on the competition between passive funds tracking the same index, our analysis suggests that passive funds also compete against active funds. Passive fund sponsors therefore have an incentive to take measures to neutralize the comparative advantage enjoyed by active funds, that is, their ability to use their investment discretion to generate alpha. Because they cannot compete by exiting underperforming companies, passive investors must compete by using “voice” to prevent asset outflow.

In the case of Strine’s concerns with political contributions, use of “voice” would be voting in favor of measures requiring shareholder approval or at least transparency of political contributions. While Strine’s paper was based on actual behavior, Fisch points to potential, if funds operate logically. The potential for “voice” to ensure competitiveness with active investors also addresses, at least in part, some of Bebchuk’s concerns.

Fisch also points out in another paper (Shareholder Collaboration) that passive investors are increasingly engaged in information production of their own, not “just as ‘reticent’ supporters of initiatives undertaken by activist hedge funds.” Because of their size, huge passive index funds often cast deciding votes. Because of their market-wide focus, they often have information the firm insiders do not have. In many cases the potential rewards for index funds can be disproportionately high, compared to their investment in time, since they typically hold a significant portion of the outstanding stock at most large firms.

Fiduciary obligations are complicated.  “Mutual funds’ fiduciary duties require them to vote in a manner that benefits their investors, not each company that they hold in their portfolio.” (Passive Investors) For example, holding both target and bidder might lead to a different vote than holding only one.

Most troubling was the following:

Delaware law provides shareholders with the right to vote their shares as they see fit and does not impose any obligation on shareholders to vote unselfishly or to further the economic interests of the corporation. [See, e.g., Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Ringling, 53 A.2d 441, 447 (Del. 1947) (“Generally speaking, a shareholder may exercise wide liberality of judgment in the matter of voting, and it is not objectionable that his motives may be for personal profit, or determined by whims or caprice, so long as he violates no duty owed his fellow shareholders.”).]

Given that funds operate within such a weak standard, it is important that individuals, the real Main Street investors in index funds, have ready access to voting records in an easily compared format. Keith L. Johnson, et al., point out the importance of fiduciaries conducting “congruity analyses of proxy votes” with public statements statements by delegated fund managers.

As an example of how such potential inconsistencies might present, BlackRock states in its Investment Stewardship 2018 Annual Report, “During our direct engagements with companies, we address the issues covered by any shareholder proposals that we believe to be material to the long-term value of that company. Where management demonstrates a willingness to address the material issues raised, and we believe progress is being made, we will generally support the company and vote against the shareholder proposal.” (Emphasis added.)

On the surface, this stated practice of voting against shareholder resolutions that have been determined to be in the best interests of the company suggests there is a preference for supporting management over the interests of clients in improving company performance as soon as practical. The resulting disconnect between value creation and proxy voting sends mixed signals to clients, the company and the marketplace. It could have the practical effect of giving companies more room to ignore or delay value enhancing actions.

Fisch argues that index fund investors can switch and some can. However, many employer sponsored 401(k) and other plans provide few choices. Main Street investors are often, as Strine notes, “forced capitalists.” If their 401(k) plan administrators take little or no initiative to investigate potential conflicts or breaches of fiduciary duty, how would they know? Like index funds themselves, the only tool “forced capitalists” might have is “voice.” However, like index funds, they need information before they can voice concerns.

Under the current system, proxy votes only need to be disclosed once a year and can be in a format that makes sorting and analysis difficult. More frequent, transparent and user friendly proxy voting records would make it easier for employees to argue for investment options better aligned with value creation. Such information would also make it more difficult for employers to ignore their fiduciary duties.

Real-time, or close to real-time, proxy voting disclosures using an internet window into each fund’s existing proxy voting platform would facilitate the ability of Main Street investors, the beneficial owners, to hold companies accountable through the complex chain of ownership. Several public pension and “socially responsibe” mutual funds have made such disclosures for many years. (See an incomplete list in our Shareowner Action Handbook.)

I will address more of the rationale and benefits of “real-time” disclosure in an upcoming post. Check back or subscribe to email notifications.

   

Continue Reading · 0

Big Three Index Funds: Bebchuk, Hirst and More

Lucian Bebchuk has given more thought to the issues surrounding the Big Three Index Funds than other researchers. He and Scott Hirst recently provide a “comprehensive theoretical, empirical, and policy analysis of index fund stewardship.” Reference also Strine: Big 4 Responsible to “Forced Capitalists,” as well as The Untenable Case for Keeping Investors in the Dark by Bebchuk, et al. as we examine further strategies to make large investors work more effectively for those who use their services.  Continue Reading →

Continue Reading · 4

Frozen Charters: Major CorpGov Issue

Thanks to Scott Hirst‘s articles and papers on the subject, I can borrow his catchy label for one of biggest current problems in corporate governance. Frozen charters are supermajority provisions that are impossible to repeal. He appears to attribute that to the 2012 change by the New York Stock Exchange (NYSE), which changed its policies to prohibit brokers from voting uninstructed shares on corporate governance proposals. I would lay a larger share of the blame on founders who wrote the frozen charters to forever retain a large degree of control. Regardless of who is to blame, frozen charters are a problem that needs fixed.  Managers, boards, shareholders, Republicans and Democrats should all be able agree on a solution. Continue Reading →

Continue Reading · 0

Listing Standards Requested by CII

Listing standards change sought by the Council of Institutional Investors (CII). CII filed petitions with the New York Stock Exchange (NYSE) and the NASDAQ, asking both to limit listings of companies with dual-class share structures. They have taken the right approach to address a growing problem. I hope it ends a worldwide race to the bottom for listing standards. Alternatively, adoption of the suggested listing standards could reestablish that US based companies are more democratic and accountable than counterparts based elsewhere. Continue Reading →

Continue Reading ·

Main Street Investors: Battle Coming

The battle over Main Street Investors could determine the future of the American economy for decades to come. According to Cydney Posner of Cooley PubCo, on one side are those who believe investors must focus on maximizing financial return and management knows best. On the other side are those who want to broaden the focus of investors to include environmental, social and governance (ESG) issues, with everyone participating in the debate. Continue Reading →

Continue Reading ·

Shareholder Collaboration

Shareholder Collaboration is a new ECGI working paper by Jill Fisch and Simone M. Sepe. Fisch is one of my favorite researchers, being insightful and less predictable than many of those in the primary academic hubs of corporate governance (Harvard, Stanford, and Delaware). In Shareholder Collaboration, the authors discuss the growing importance of a collaborative model, in contrast to models based on management power or shareholder power. (download paper in pdf) Continue Reading →

Continue Reading ·

NAM: Stop Supporting ‘Main Street Investors’ Coalition Say Real Investors

NAM Board Targeted

Investors led by Walden Asset Management, New York Common and the California State Teachers’ Retirement System (CalSTRS) called on 45 companies sitting on the Executive Committee and Board of the National Association of Manufacturers (NAM) to end the trade association’s attacks on shareholders.

The investors’ letter asks the companies to distance themselves from NAM’s recent attempts to discredit shareholder engagement, particularly on climate change. These efforts have been undertaken primarily through NAM’s membership in the Main Street Investors Coalition (MSIC) and through a report NAM funded and distributed that wrongly asserts that shareholder resolutions diminish company value. MSIC represents no investors. In my opinion, it is a front group for corporate managers attempting to generate fake news, stirring public opinion against investor rights.

Quotables on NAM

“The irony is that many companies on the NAM board are active business leaders on climate change,” said Timothy Smith, Director of ESG Shareowner Engagement at Walden Asset Management.

They understand the very real risk to our environment and have active forward-looking policies and programs on climate. Yet their dues to NAM are funding an aggressive attack against the very investors they meet with regularly to address climate change. We are appealing to these companies to clearly state their opposition to these positions taken by NAM and Main Street Investors Coalition. It is important to do so to protect their company reputations and integrity.

“Environmental risk consideration is part of the evolution of investing. Whether a retail or institutional investor, assessing the risks of investments is a standard practice,” said CalSTRS Portfolio Manager in Corporate Governance Aeisha Mastagni.

NAM appears out of touch with its own constituents. Over the last decade more than 75 percent of the environmental-related proposals CalSTRS filed were withdrawn because the companies were willing to negotiate a mutually agreeable outcome.

The Letter’s Key Paragraph

The MSIC perpetuates the myth that incorporating environmental, social and governance (“ESG”) factors inherently conflicts with protecting and advancing shareholder value. However, the 1,200 members of the United Nations-backed Principles for Responsible Investment – including Fidelity, BlackRock, Vanguard and State Street – with over $70 trillion in assets under management, have committed to consider ESG issues in the investment decision-making process since these factors may affect shareholder value. There is ample evidence that incorporating ESG issues into investment decisions is part of responsible management as a fiduciary. Moreover, hundreds of global companies demonstrate leadership and transparency on sustainability issues. These companies’ action are not guided by “political and social interests” but by what is good for their investors and stakeholders over the long term.

NAM Background

NAM is a trade organization that represents and advocates for manufacturers across industrial sectors. Many NAM members are taking active steps on climate issues as a result of shareholder engagement. Nevertheless, NAM has established significant ties to MSIC, which purports to speak for investors, but which instead appears to be engaged in an attempt to undermine shareholders’ rights by denouncing ESG-related shareholder proposals and by suggesting shareholders’ concerns are politically motivated.

Why NAM is Attacking Shareholders Now

The investor letter noted that, “The emergence of MSIC and the release of this report come at a time when investor support for shareholder proposals is growing” because the “business case behind them is clear and convincing.” The signatories requested that the companies explain their views on MSIC’s public attempts to discredit investor engagement and shareholder proposals.

Over 80 institutional investors, including state and city pension funds, investor trade associations, investment firms and mutual funds, foundations and religious investors added their organization’s names in support of the letter.

Investors are actively engaging companies in their portfolios as concerns over climate risk grow. Most recently, investors representing approximately $30 trillion urged some 150 companies to reduce their greenhouse gas emissions, disclose their assessment of climate risks, and explain what actions they plan in response to climate risk.

Investors like BlackRock, Vanguard and State Street have made it clear that they want the companies in which they own shares to address climate risk.

“It is extremely bad timing for NAM and by implication the members of its board to be attacking investors addressing climate change at a moment when we desperately need to work together,” said Smith.

Historical Perspective

Since I am older than most of my readers, I offer the following historical perspective. The investor letter sent to the Executive Committee and Board NAM is correct in assuming that shareholder rights are under attack because their proposals are winning. The current fight on climate change and social issues reminds me of an older one on proxy access. In 1977 the SEC held a number of hearings to address corporate scandals. At that time, the Business Roundtable (BRT) recommended amendments to Rule 14a-8 that would allow access proposals, noting such amendments

… would do no more than allow the establishment of machinery to enable shareholders to exercise rights acknowledged to exist under state law.

The right to pursue proxy access at any given company was uncontroversial. In 1980 Unicare Services included a proposal to allow any three shareowners to nominate and place candidates on the proxy. Shareowners at Mobil proposed a “reasonable number,” while those at Union Oil proposed a threshold of “500 or more shareholders” to place nominees on corporate proxies.

One company argued that placing a minimum threshold on access would discriminate “in favor of large stockholders and to the detriment of small stockholders,” violating equal treatment principles. CalPERS participated in the movement, submitting a proposal in 1988 but withdrawing it when Texaco agreed to include their nominee.

Early attempts to win proxy access through shareowner resolutions met with the same fate as most resolutions in those days – they failed. But the tides of change turned. A 1987 proposal by Lewis Gilbert to allow shareowners to ratify the choice of auditors won a majority vote at Chock Full of O’Nuts Corporation and in 1988 Richard Foley’s proposal to redeem a poison pill won a majority vote at the Santa Fe Southern Pacific Corporation.

In 1990, without public discussion or a rule change, the SEC began issuing a series of no-action letters on proxy access proposals. The SEC’s about-face was prompted by fear that “private ordering,” through shareowner proposals was about to begin in earnest. It took more than 20 years of struggle to win back the right to file proxy access proposals.

Conclusion

Let’s hope the current attack on shareholder rights by NAM and the fake Main Street Investors Coalition does not set investor rights back by another 20 years.

    
 
 

Continue Reading ·

Tesla Proxy Access: Item 4 Presentation

Tesla Proxy Access, item #4

Tesla shareholders meet Tuesday, June 5, 2018, at 2:30 p.m. Pacific Time, at the Computer History Museum located at 1401 N. Shoreline Blvd., Mountain View, CA 94043.   In the interest of more accurate press coverage of Tesla Proxy Access, item #4, I (James McRitchie) am posting the text of my draft presentation on Tesla Proxy Access in advance. Continue Reading →

Continue Reading ·

Culture Impact: Directors Forum 2018

The Culture Impact: Values, Attitudes & Strategic Directions

Culture impact in corporate governance got a big boost with NACD Blue Ribbon Commission report Culture as a Corporate Asset. A brave panel tackled the topic, The Culture Impact: Values, Attitudes & Strategic Directions, at the Corporate Directors Forums I attended in San Diego. Like all Corporate Directors Forums, this one operated under the Chatham House Rule, so you will not find any direct quotes below. These are my notes on The Culture Impact. As such, they include my opinions as well observations made by speakers, panelists and others in attendance at the Forum. This is certainly not a transcript. However, I hope even those who attended the Forum will find the post useful, especially my attempt to provide additional context through links and commentary.

To learn more about the 13th annual Directors Forum: Directors, Management & Shareholders in Dialogue conference, click on the following: @corpdirforum on Twitter, tweets from  that often link to other posts,   website, and Linkedin.

The Culture Impact: Panelists

  • Moderator: Michael Berthelot, Director, Fresh Del Monte Produce Company, CEO, Cito Capital Corp; and Managing Principal, Corporate Governance Advisors, Inc.
  • Stephen L. Brown, Senior Advisor, KPMG Board Leadership Center
  • Joann Lublin, Pulitzer-Prize Winning Journalist & Management News Editor, The Wall Street Journal; Author, Earning It
  • Bryan Cornwall, Founder & Principal, Cornwall Bioengineering & Communications
  • Hanna Grene, Policy Director, Center for Sustainable Energy

The Culture Impact: My Notes

Paper forthcoming on Wells Fargo and Uber by Hanna Grene and Bryan Cornwall to be published on Equilar website. I will be waiting with anticipation. How would we react? What tools do we have available? It seems to me, the problems were an open “secret,” not unlike Harvey Weinstein.  The basics of the Wells Fargo scandal were reported in the LA Times in 2013. Los Angeles sued in 2015. The Board didn’t issue their own internal study until April 2017. Too little, too late with Federal Reserve placing the first firmwide limit on a bank as Chair Janet Yellen stepped down. Wells Fargo announced concurrently that it would replace 4 board members, three by April. Wells Fargo will be included in case studies on culture impact for years to come.

Similarly, Uber’s “hard charging” workplace environment was hardly a secret and had adverse corporate culture. Culture was key. Uber was (is?) aggressive and overbearing. Whereas founder Travis Kalanick’s motto might have been something like, “get it done,” the new CEO Dara Khosrowshahi has adopted ‘We do the right thing. Period.’ Media impact was huge reason for change. We see the influence of media, especially social media, even more after the latest mass shooting. (Mass shootings have made gun stocks toxic assets on Wall Street)

The Culture Impact: Public Opinion Sidebar

Renee Aggarwal, Isil Erel and Laura T. Starks, Influence of Public Opinion on Investor Voting and Proxy Advisors (August 6, 2014, Georgetown McDonough School of Business Research Paper No. 2447012; available at SSRN) found that investors have been “voting less with the recommendations of management or proxy advisors.” In contrast,

public opinion on corporate governance issues, as reflected in media coverage and surveys, is strongly associated with investor voting, particularly mutual fund voting. In addition, even proxy advisor’s recommendations are associated with public opinion… media coverage captures the attention of proxy advisors, institutional investors and individual investors, and is thus reflected in recommendations and votes.

The researchers looked at each proxy proposal for each firm in the Russell 3000 Index for the period January 2004 through November 2010. They looked not only at voting records and ISS recommendations but also media coverage of executive compensation, as well as Gallup surveys of public opinion.

A few highlights from their research are as follows:

  • Mean support for shareholder proposals increased from 23.6% in 2004 to 31.8% in 2010, after peaking at 37% in 2009.
  • Institutions voted with management on shareholder proposals 74% of the time in 2004 but only 54% of the time by 2010.
  • Investor agreement with ISS advice went from 78.4% in 2004 to 57.5% in 2010.
  • In 2004, 60% of investors followed ISS opposition to proposals but only 20% did so by 2010.
  • The proportion of shareholder proposals opposed by ISS declined from 156.4% in 2010 to 30.5% by 2010.
  • Support for shareholder proposals increases by 3.15%-2.69% if there is a one standard deviation increase in media coverage.

They conclude:

Our results suggest that public opinion, as measure through either Gallop Poll survey or media coverage at the aggregate and firm level, influences shareholder voting. The implications of these results are that financial intermediaries, such as mutual funds, pay attention to the shareholders’ preferences regarding corporate governance. These results hold even after controlling for the recommendations of the proxy advisor.

The Culture Impact: Back to Conference Notes

Executives sometimes make it known they did not want negative feedback. How do directors make changes before a negative story appears on the upper fold of a major newspaper?

If you are a high performer, culture impact may be nonexistent for a while; you can do anything you want. But the buck stops at the board, not the CEO. The board needs to be willing to second guess. The board needs to wonder about what you do not know. The board should insure it has independent sources of information. Some argue they have their own independent staff. Activists often do, and they often turn out to be good board members in part because of those additional resources.  Every board member should have a responsibility to visit branches, have many experiences as a customer or user. Uber board members seem to have been blind-sided with rapid growth. They waited to long to go after the CEO. Mandatory unconscious bias training might have helped.

The NACD Blue Ribbon report has many tools. Regulatory or the courts; markets or self-reflection. Unfortunately, too often boards seem to be wearing blinders. We are unlikely to see regulatory reform on culture impact. Pressure seems more likely from major shareholders like BlackRock’ announcement to gunmakers. Shareholders have the ability to push back. They have the right to vote boards off the island. Larry Fink’s letter this year said companies must have “a sense of purpose.” Companies have culture impact.

Furthermore, the board is essential to helping a company articulate and pursue its purpose, as well as respond to the questions that are increasingly important to its investors, its consumers, and the communities in which it operates. In the current environment, these stakeholders are demanding that companies exercise leadership on a broader range of issues. And they are right to: a company’s ability to manage environmental, social, and governance matters demonstrates the leadership and good governance that is so essential to sustainable growth, which is why we are increasingly integrating these issues into our investment process.

Your vote is really important. At Wells Fargo and Uber we saw a failures of courage. Uber had frat boy culture. Culture, character and courage… that is what it takes. Wells Fargo seems to have had a culture of, ‘cheat and you can stay; don’t cheat and you are fired.’ Boards need to be more transparent around reports and actions taken, not just to reduce potential liabilities but also to help your company live up to its purpose.

Investigations must be reported up. HR should number and track complaints so they do not get lost. Boards should get routine reports to assess culture impact — to see trends and outliers. Boards should seek the right answers. Non-financial measures should be to be tied to compensation. In an M&A, which culture will prevail? Which culture to keep.

The role of HR. Is it to protect the company or to protect and develop employees? Heads of HR should address boards more frequently. Directors have to spot the data anomalies. Culture is important and is part of their fiduciary duty.

The Culture Impact: Recent Related Posts

   

Continue Reading ·

CII: Climate Competency & Risk

Shifting Investor Perspectives on Climate Risk & Board Climate Competency

These notes on climate competency are my last post from the Council of Institutional Investors Fall 2017 conference.  Find more at .  As a member of the press, I was excluded from the policy-making meetings. Still, it was a great opportunity to touch base with members of CII and to learn of recent developments and where we may be headed.

The panel discussion on climate risk and board competency hosted by the 50/50 Climate Project and the New York City Comptroller’s Office. From the program: Continue Reading →

Continue Reading ·

Climate Risk – Walden Moves BlackRock

Walden Moves BlackRock: Background

A number of investors, led by Walden moves BlackRock on climate Risk. Walden Asset Management and the Center for Community Change, along with the City of Seattle Employees’ Retirement System and First Affirmative Financial Network, filed a shareholder resolution requesting a review of BlackRock’s proxy voting process and record on climate change.

Following extensive engagement and constructive dialogue between BlackRock, Walden and a number of investors, the shareholder resolution was withdrawn. As a result of the dialogue, BlackRock has updated its website to provide fresh insights into the ways it believes climate change creates risks and opportunities for companies. BlackRock also noted that climate risk will be a priority for their engagement with companies and boards throughout 2017 and 2018. Continue Reading →

Continue Reading ·

Investor Stewardship Group: 1 Share, 1 Vote

Investor Stewardship Group logoInvestor Stewardship Group Launches Stewardship Framework for 2018

The Investor Stewardship Group (link), a collective of some of the largest U.S.-based institutional investors and global asset managers, along with several of their international counterparts, announced the launch of the Framework for U.S. Stewardship and Governance, a historic, sustained initiative to establish a framework of basic standards of investment stewardship and corporate governance for U.S. institutional investor and boardroom conduct.one share one vote

My own impression is that this group has been carefully constructed, probably stemming from many discussions at ICGN and CII. They have certainly started with an impressive group. Although most of the principles are relatively ‘safe,’ I am delighted to see their position that “shareholders should be entitled to voting rights in proportion to their economic interest.” That one recommendation alone is huge. I hope they continue to build on their initial consensus items.

Internet Roadblock

Of course, the internet changes everything. Companies used to go public to raise money for factories, staff, etc. Now, they raise funds from private equity funds and scale all the way because they can build out through the internet with coding and algorithms. They go public only when founders and initial supporters want to cash out a portion of their investment. Continue Reading →

Continue Reading ·

Climate Competency Needed in Boardrooms

Rich Ferlauto on Climate Competency

Rich Ferlauto on Climate Competency

Large institutional investors, concerned about portfolio risks stemming from the effects of global warming, are calling for climate-competent boards and directors as part of their fiduciary responsibility to preserve and enhance the long-term value of their investment assets.

Despite the anticipated rollback of climate related governmental policies such as the Environmental Protection Agency’s Clean Power Plan and limits on methane emissions by the Trump administration, investors still need to understand the risks that climate change poses to their portfolios. Unequivocal disclosures and boards equipped to manage and govern climate risk will be more important than ever. Now, however, it appears investors will not able to rely on federal regulatory standards or policy interventions to manage climate risk related to greenhouse gas emissions and the emphasis on fossil fuel production. They will be left to their devices to understand the very real financial impacts that climate issues could have on their portfolios. Continue Reading →

Continue Reading ·

Commonsense Principles: Ground Floor

Commonsense Principles of Corporate Governance. JPMorgan Chase CEO Jamie Dimon and a group of influential leaders in business and finance have joined to develop a set of "commonsense" principles that institutional investors and governance advisers are mostly applauding. (Photo by Mark Wilson/Getty Images and used by Washington Post)

JPMorgan Chase CEO Jamie Dimon and a group of influential leaders in business and finance have joined to develop a set of “commonsense” principles that institutional investors and governance advisers are mostly applauding. (Photo by Mark Wilson/Getty Images and used by Washington Post)

The so-called Commonsense Principles of Corporate Governance are posted here mostly for my future reference, since I don’t know how long others will keep them on the internet. The authors are no radicals, but are a group of 13 executives from the country’s largest public companies and institutional investors… very much mainstream CEOs. Almost half hold both CEO and chair positions, a practice many investors consider bad corporate governance. The Commonsense Principles are supposed to “provide a basic framework for sound, long-term oriented governance” at public companies. Continue Reading →

Continue Reading ·

Reeds Delivered a Corrected Proxy for Christmas

Reeds Delivered a Corrected Proxy for Christmas

Reeds Delivered a Corrected Proxy for Christmas

There it was under my tree, Reeds delivered a corrected proxy for Christmas!

Santa has finally been good to Reeds (REED) shareholders.

I’m tacking notification of the corrected proxy as a sign that Founder/CEO, Christopher Reed might be at the start of a new attitude toward  SEC rules and corporate gReed's Mugovernance, I changed my vote. I voted for Mr. Reed, the auditors, my own proposal to require a majority vote to elect directors and against the rest of the board and the “incentive” stock option plan. The incentive plan lack specificity.

Of course, my proxy didn’t magically appear under my Christmas tree. Reeds Inc. had to pay to have the link to their revised proxy sent out by Broadridge to brokers and banks all over the country. After being reminded several times, Reeds finally did the right thing. Unfortunately, their reluctance and delay necessitated postponing their annual meeting for more than a week but, despite the additional cost to company and shareholders (including me), it is good to see our company now following the law. Continue Reading →

Continue Reading ·

BlackRock: Proxy Score 65

BlackRockBlackRock, Inc. (NYSE:BLK), one of the stocks in my portfolio, provides investment management, risk management and advisory services for institutional and retail clients worldwide. Their annual meeting is coming up on 5/28/2015. ProxyDemocracy.org had the votes of one fund when I checked on 5/19/2015. I voted with Board recommendations 65% of the time.

View Proxy Statement. Read Warnings below. What follows are my recommendations on how to vote the BlackRock 2015 proxy to enhance corporate governance and long-term value.  Continue Reading →

Continue Reading ·

Excluding Fossil Fuels Gets Easier

FTSEFTSE Group (“FTSE”), the global index provider, announced the launch of the FTSE Developed ex Fossil Fuels Index Series, an innovative set of benchmark indices that excludes companies linked to exploration, ownership or extraction of (carbon reserves) fossil fuels. This ground-breaking launch is leading the way to implementation of a total exclusion model for fossil fuel-linked stocks, so that excluded enterprises are removed entirely from the Index Series. Continue Reading →

Continue Reading ·

My Notes from Ceres Conference 2013

Let’s just label these notes as “for entertainment purposes only.” Attending the conference was a real pleasure. Unfortunately, I was too busy catching up with people to take more than impressionistic notes at a few of the discussions. Prepare to be frightened about global climate change and our irresponsibly slow pace addressing the catastrophic consequences we are already beginning to see all around us. Save April 30 and May 1 for Ceres Conference 2014 in Boston. Continue Reading →

Continue Reading ·

Opportunity for Comment: Sustainability Listing Standards Proposed for Global Stock Exchanges

Yesterday, a group of investors announced a Consultation Paper with recommendations for integrating sustainability disclosure requirements into listing rules for U.S. and global stock exchanges.

The draft recommendations were developed by nearly a dozen investors who are part of the Ceres-led Investor Network on Climate Risk (INCR). BlackRock, British Columbia Investment Management Corporation, and the AFL-CIO Office of Investment are among those who participated on the INCR Listing Standards Drafting Committee. Continue Reading →

Continue Reading ·

AFL-CIO Key Votes Survey Results for 2012

Vanguard, Northern Trust, BlackRock and Fidelity scored the lowest among researched funds in supporting AFL-CIO endorsed proxy issues in 2012, according to their 2012 Key Votes Survey. Calvert, Amalgamated Bank, McMorgan and Bridgeway scored the highest.

On proxy-voting issues at 32 companies the AFL-CIO considers representative of a “worker-owner view of value that emphasizes management accountability and good corporate governance,” Vanguard voted against all 32 proposals; Northern Trust, 28 out of 29; BlackRock, 30 out of 32; and Fidelity, 28 out of 30. Continue Reading →

Continue Reading ·

UNFI: How I Voted – Proxy Score 17%

United Natural Foods ($UNFI) is one of the stocks in my portfolio. Their annual meeting is coming up on 12/12/2012. ProxyDemocracy.org had collected the votes of three funds when I voted on 12/5/2012.  I voted with management only 17% of the time.  View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank will be voted in favor of management’s recommendations. (See Don’t Let Companies Change Shareholders’ Blank Votes) Continue Reading →

Continue Reading ·

Shareholder Activism: Stanford Rock Center for Corporate Governance Series – Part 3 of 3

Evan, Abe, Mason

This was the last of a three part overview of shareholder activism, beginning with the history and an overview of the key players in the space; continuing with a behind-the-scenes look at non-contentious shareholder engagement and how its impacting companies and the market; and ending with this session on Contested Situations: Proxy Fights, PR wars and activist defense. Continue Reading →

Continue Reading ·

Powered by WordPress. Designed by WooThemes