Tag Archives | P&I

Letter to P&I Re Fiduciary Duty Editorial

P&I-proxy-voters-cartoon Below is an email I sent to Pensions & Investments (P&I) editorial chief Barry Burr praising their editorial enhancing fiduciary duty and opining on how it may speed the arrival of the time when retail investors will vote their values with the simple push of a button or two on their cell phones. I will follow this tomorrow with some additional remarks regarding the advent of open client directed voting, assisted by this expanded fiduciary duty.

Dear Editor:

Thank you for your important editorial, Winning Over Proxy Voters, which argues that institutional investors have a fiduciary duty to announce their proxy votes in advance of annual meetings, if doing so is likely to influence voters.

Votes are assets. Announcing votes in advance of meetings puts the value of those assets to their full use; announcing votes after the meeting does not. Continue Reading →

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Corporate Tax Strategies Threaten Wealth Creation: Fiduciaries Must Consider the Impact on Society

Adam Kanzer

Adam Kanzer

Guest Post by Adam M. Kanzer, managing director and general counsel of Domini Social Investments LLC, New York. His responsibilities include directing Domini’s shareholder advocacy department, where for more than ten years he has led numerous dialogues with corporations on a wide range of social and environmental issues. The following originally appeared under the same title in the May 14, 2014 edition of Pensions & Investment. I added a few additional links.

Google Inc. shareholders May 14 rejected by a 93% vote a proposal sponsored by my firm, seeking the adoption of a responsible code of conduct to guide the company’s global tax strategies. I suspect this proposal prompted a quizzical reaction from many investors who assume that minimizing corporate tax payments is good for shareholders. An April 28 Pensions & Investments editorial, Tax exempt but tax conscious, wrestled with this issue, ultimately concluding fiduciaries could not ask companies to pay more. Continue Reading →

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Fiduciary Duty to Announce Votes (Part 3): Take Action

PD-CkMutualVotingRecord

Take Action: Ask your mutual fund, pension fund, and/or endowment to:

  1. Send you a copy of their proxy voting policies and their proxy voting record.
  2. Report their votes in advance of annual shareholder meetings to ProxyDemocracy.org.  
  3. Make a small donation (not tax deductible) to ProxyDemocracy.org to keep that valuable service going or contact Andy Eggers to make a tax-deductible contribution through their 501(3) affiliate. I’ll match donations up to $2,000 until the end of June.

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Fiduciary Duty to Announce Votes (Part 1): Editorial Calls For Advanced Disclosure

P&I-proxy-voters-cartoon
A recent editorial in Pensions & Investments (P&I), Winning over proxy voters, essentially argues that pensions have a fiduciary duty to announce their proxy votes in advance of the annual general meeting (AGM) if doing so is likely to influence the vote. This minor extension of current practice could have a profound impact and should also apply it to mutual funds and investment advisors, as well as other institutional investors, such as endowments.
The editorial discusses Warren Buffett’s recent reluctance to vote against the pay package at Coca-Cola.

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Corporate Governance: Stepping Back in Time

MrPeabodysWayBackMachineFive years ago in Corporate Governance

Publisher’s Note: Yes, you’ll find many broken links. After 5, 10 and 15 years, the internet moves on. Many of the organization’s linked have since gone under. We’re just glad to still be here, offering our readers a sense of the history we have shared. 

Since 2005, KLD has studied the S&P 100’s sustainability reporting practices for the Sustainable Investment Research Analyst Network, a working group of the Social Investment Forum. The 2008 Sustainability Report Comparison reveals encouraging news. Of the 100 largest U.S. publicly-traded companies, 86 maintain corporate sustainability websites and 49 produced sustainability reports in 2007. Continue Reading →

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Risk Lessons from BP

According to an article in Pensions & Investments, the BP disaster will cause managers and investors to become more aware of how ESG-related risks can be material to a company’s performance, experts say. This will drive managers and investors to pay closer attention to ESG risks and to push for changes in areas such as corporate disclosure that might help investors better understand ESG risks.

At the heart of the problem is that stock analysis never assumes anything will go wrong, said Ran Fuchs, global head of ESG analytics at RiskMetrics Group: “It is something missing from analysis — not just ESG analysis. In the past few years, a lot of bad things have gone wrong, and we still ignore it in our analysis.”

Most of the best-in-class products labeled ESG had BP in the portfolio (before the disaster), yet there seems to have been plenty of warning signals in hindsight. According to ABC News:

  • In 2007, a BP pipeline spilled 200,000 gallons of crude into the Alaskan wilderness and BP got fined $16 million.
  • Then the Justice Department required the company to pay approximately $353 million as part of an agreement to defer prosecution on charges that the company conspired to manipulate the propane gas market.
  • In two separate disasters prior to Deepwater Horizon, 30 BP workers were killed and more than 200 have been seriously injured.
  • According to the Center for Public Integrity, in the last three years, BP refineries in Ohio and Texas have accounted for 97 percent of the “egregious, willful” violations handed out by OSHA.
  • OSHA statistics show BP ran up 760 “egregious, willful” safety violations, while Sunoco and Conoco-Phillips each had eight, Citgo had two and Exxon had one comparable citation. (BP’s Horrible Safety Record: It’s Got 760 OSHA Fines, Exxon Has Just 1, Business Insider, 6/2/10)

The P&I article says we’ve learned four key things from the BP spill:

  • the importance of inherent sector risks;
  • the potential of politics affecting how a company manages a disaster;
  • media response will be much swifter and more international than ever before; and
  • companies must take responsibility for their suppliers and contractors publicly from the start of the disaster. (Managers learn from the BP catastrophe, 6/28/10)(

As early as 1993, ICCR members filed six resolutions to more closely regulate subprime mortgages. (Two Overlooked Lessons From the Financial Crisis, 12/31/10) We need to pay more attention to signals of excessive risk.

Maybe it’s time for index funds to weight stocks based on risk. David R. Koenig, recently launched The Governance Fund, LLC, a private investment management firm that uses a proprietary model of corporate governance based on several data-sets to capitalize on what he terms “the value gap” between well-governed and poorly governed companies. Hopefully, we’ll see more attention to strategies that eventually may reduce overall risks to our environment. Kenneth Rogoff even speculates the BP spill may rekindle interest in a carbon tax? (Can Good Emerge From the BP Oil Spill?, Project Syndicate, 7/2/10)

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