Tag Archives | resolutions

Shareholder Society Better Chamber Mantra

A shareholder society appears to have no place in the U.S. Chamber of Commerce Center for Capital Markets Competitiveness (CCMC) severely flawed paper on shareholder proposal reform. The paper is intended to contain a “set of recommendations for the SEC on fixing the broken Rule 14a-8 system in order to protect investors and make the public company model more attractive.”

However, the report attempts to solve our economic woes by eliminating shareholder rights. I criticized their report in my post Shareholder Proposal Reform Rebutted. Instead of seeking to amend Rule 14a-8 to create an essentially democratic-free zone for entrenched managers and boards, the Chamber should focus on creating a prosperous shareholder society where all Americans have a stake in our future. Continue Reading →

Continue Reading ·

Interfaith Center on Corporate Responsibility: CHOICE Act

Interfaith Center on Corporate ResponsibilityThe Interfaith Center on Corporate Responsibility, a coalition of institutional investors representing $200 billion in invested capital that engage corporations on the environmental and social impacts of their operations, sent a letter yesterday to all U.S. Senators urging them not to pass the Financial CHOICE Act.

The proposed legislation, which passed the House and is currently pending in the Senate, would not only eviscerate critical financial reforms instituted in response to the 2008 financial crash, but would also eliminate the long-standing right of shareholders to exercise their voice regarding the governance of the companies they own. Continue Reading →

Continue Reading ·

Investor Letter to BRT (Business Roundtable)

Publisher’s Note: The following guest post from Timothy Smith reproduces a recent investor letter to the BRT (Business Roundtable) concerning the importance of shareholder resolutions. I added title, graphics, changed some of the formatting and added a note about the BRT for background. See also previous posts: Financial CHOICE Act: From too big to fail, to too big to listen and Financial CHOICE Act: Take Action. Download the original letter via pdf.

Walden Asset Management





July 6, 2017
Mr. Joshua Bolton
President and CEO
The Business Roundtable
300 New Jersey Avenue, Suite 800
Washington, DC 20001

Dear Mr. Bolton:

We are writing to express the deep concerns of numerous investors regarding the Business Roundtable’s active campaign to effectively end the ability of most investors to file shareholder resolutions for a vote at corporate annual general meetings. Continue Reading →

Continue Reading ·

Investors Seek Disclosure of Corporate Lobbying Expenses

Citizens United and Pay 2 PlayResolutions Filed at 53 Companies

Disclosure of corporate lobbying expenses remain top shareholder proposal topics for 2015, as more than 60 investors have filed proposals with more than 50 companies asking for reports that include federal and state lobbying payments, political contributions and/or payments to trade associations used for lobbying and payments to any tax-exempt organization that writes and endorses model legislation.

In 2014, resolutions relating to corporate political and lobbying expenses of a company were among the most common shareholder proposal put forth during the proxy season for the fourth consecutive year, and it is expected that these will be among the most popular shareholder proposal topics for 2015 proxy season. The bulk of political spending resolutions fall under two categories, either requesting disclosure of lobbying expenditures or seeking disclosure of political contributions. Continue Reading →

Continue Reading ·

Push for Increased Gender Diversity in the Boardroom

thirty percent coalitionThe Thirty Percent Coalition’s Institutional Investors continued their active “Adopt a Company” campaign following a series of letters sent to approximately 160 companies in the S&P 500 and Russell 1000 with no women on their boards. The third letter writing campaign to increase gender diversity in the boardroom in the fall of 2014 was supported by representatives of investors representing $3 trillion in assets under management, signed by pensions, state officials, mutual funds, investment managers, foundations, religious institutions, and women’s organizations across the US.  Continue Reading →

Continue Reading ·

Shareholder Proposal: Best Response is Not a Lawsuit

HarvardCorpGovAmy L. Goodman and John F. Olson, both of Gibson, Dunn & Crutcher LLP posted Shareholder Proposal Developments During the 2014 Proxy Season on the Harvard Law School Forum on Corporate Governance and Financial Regulation yesterday. It included some good information and analysis but seemed a bit too much like the response to a shareholder proposal should be a lawsuit — an advertisement for Gibson Dunn to this, admittedly biased, eye.


David Bogoslaw, Editor of the Corporate Secretary sent out an email in response that was more balanced with regard to shareholder proposals and lawsuits. I was heading out to Ottawa yesterday, so only had time for a brief response. The following is my open email to Mr. Bogoslaw. Continue Reading →

Continue Reading ·

India Proxy Season 2013 Analysis From InGovern

InGovernA recent report by InGovern Research Services analyzes patterns in the resolutions proposed by Indian listed companies in the just concluded 2013 proxy voting season. The data has been collated and analyzed from a coverage universe of 585 companies forming part of the S&P 500 and BSE 500 indices, which represent over 95% of the market capitalization of Indian listed companies. Management and shareholder resolutions passed in the Annual General Meetings (AGMs) held in 2013 for these companies have been analyzed. Continue Reading →
Continue Reading ·

The AGM Votes are in and the Winner is ….

Steve Viederman

Guest Post from Stephen Viederman, Fellow, Governance & Accountability Institute, reposted here with the permission of Viederman and Accountability-Central.com. James McRitchie, Publisher of Corporate Governance reformatted the original to bring the footnotes up, hide urls and generated those wonderful ads. 

The Spring madness of annual corporate meetings (referred to as AGMs) is upon us. Continue Reading →

Continue Reading ·

Shareholders Can End Political Ad Secrecy

This month marks the first anniversary of the landmark Supreme Court Citizens United decision striking down restrictions on independent political spending by corporations and unions. But heated national debate continues. Major controversy has erupted over independent or third party organizations channeling secret donations into the elections. President Obama strongly criticized the decision, stating that it would “open the floodgates for special interests, including foreign corporations, to spend without limit in our elections.”

Polls showed that 80 percent of Americans opposed the decision.

In reaction, the House passed disclosure legislation but it failed in the Senate. As a result, millions of dollars in undisclosed donations poured into the 2010 elections. The Chamber of Commerce alone spent a reported $75 million to unseat primarily Democratic members of Congress who opposed Chamber policies.

With government stalled, it will be up to private citizens to take action. Some groups have called for companies to disclose their donations. But since the largest share of these secret donations goes to buy expensive TV ads, the focus should be on the major broadcast and cable TV companies. There is another way to end donor secrecy:

Shareholders should file resolutions requesting television companies to refuse ads from groups which don’t provide full disclosure of donors.

Ironically, the concentration of TV ownership makes this approach practical. A handful of publicly traded companies dominate the US media landscape. These include GE/Comcast (NBC), Disney (ABC), CBS, News Corp (Fox),and Time Warner

People assume that stations must run these ads since the Communications Act of 1934 requires that broadcasters grant “reasonable access” to airwaves for political speech. However, that rule has typically been applied to candidates for political office, not independent groups. Regulations governing direct candidate advertising don’t apply. The FCC has no rule prohibiting stations from refusing such ads.

Stations frequently do refuse political ads. In a case involving anti-war ads, the Supreme Court ruled that “the Communications Act…does not require broadcasters to accept editorial advertisements.” Indeed, during 2008, some TV network affiliates refused to run anti-Obama ads.

Further, since stations have the discretion to refuse the ad, they are no longer shielded from liability for the accuracy of the ads, just as with a commercial product.  In a Congressional race, a Denver TV station stopped running a third party ad stating that the sponsor failed to substantiate its claims.

Given this legal liability risk, shareholders must weigh the possible financial impact to their company of running such ads without full transparency. Currently, third party ads only have to disclose the sponsor’s name, contact information and key officers.

A second issue for shareholders is that the station’s association with ads funded by secret donations could harm the company’s reputation and potential profits. This happened to the Target Corporation, which became the object of a boycott after disclosure of a donation to an organization running ads supporting an anti-gay marriage candidate.

Finally, public distaste for secrecy, combined with the potential for foreign influence over US elections, is more reason for the media to adopt disclosure policies. Without full disclosure, shareholders can clearly claim that there is no way for companies to eliminate legal and financial risk. This shareholder claim is expressly affirmed in the proposed Congressional DISCLOSE ACT,

The American people have a compelling interest in knowing who is funding independent expenditures …to influence Federal elections… (D)isclosure of the funding sources… can provide shareholders, voters, and citizens with the information needed to evaluate the actions by special interests seeking influence over the democratic process. (emphasis added.)

It is time for shareholders to stake their claim AND FILE shareholder resolutions.

© Copyright Ron Freund  January 2011. Ron Freund is Director of Corporate Responsibility for the Social Equity Group, a California socially responsible investment firm.

Continue Reading ·

Huge Votes for First Time Resolutions on Hydraulic Fracturing

Shareowners at Cabot Oil and Gas Corporation (COG) and EOG Resources, Inc. (EOG) cast about a third of their votes in support of resolutions urging the companies to better disclose the environmental hazards of natural gas production and policies to minimize risks. Of shareowners voting for or against, the 36 percent vote at Cabot Oil & Gas on April 27th and the 31 percent vote at EOG Resources on April 28th demonstrate unusually high support for these resolutions presented for the very first time at corporate meetings. The Securities and Exchange Commission had rejected efforts by both companies to keep the resolutions off their proxy ballots.

Additional resolutions are expected to be voted on in May and June at Chesapeake Energy, ExxonMobil, Williams Companies, Inc. and Ultra Petroleum.

Production from traditional reserves of natural gas has been dwindling, and an increasing number of new wells can  currently only be developed using hydraulic fracturing—a process where water, chemicals and particles such as sand are injected into the ground under extremely high pressure—to unlock vast reserves previously unavailable.  It has been estimated that 60 to 80 percent of new wells will require hydraulic fracturing; investors are concerned that this process carries potentially serious financial and environmental risks.

As use of this process has increased, a catalog of harmful environmental and community impacts allegedly linked to fracturing has emerged, with the potential contamination of water resources being a central concern. Shareowner proposals are asking companies to increase transparency regarding the environmental impact of their operations and encourage companies to mitigate risks by switching to less toxic fracturing fluids and adopting best practices for drilling and managing wastes.

“Investors are requesting increased transparency because we are concerned that shareholder value may be undermined by company actions that fall behind public and regulatory expectations for environmental protection,” said Larisa Ruoff, Director of Shareholder Advocacy for Green Century Capital Management.  “In the absence of meaningful disclosure, investors have no way of fully assessing the risks and rewards from investing in various companies in the energy sector,” she continued. Along with the Green Century Equity Fund, the proposal at EOG was co-filed by the Benedictine Sisters of Mount St. Scholastica, Catholic Health East, MMA Praxis Core Stock Fund, the Sustainability Group at Loring, Wolcott and Coolidge and Trinity Health.

New York State Comptroller Thomas DiNapoli, as Trustee for the New York State Common Retirement Fund, was lead filer of the resolution at Cabot Oil & Gas, and Catholic Healthcare West was co-filer. According to Richard Liroff, Executive Director of the Investor Environmental Health Network:

Hydraulic fracturing operations have been linked to significant environmental concerns that could have financial implications for the companies involved and are leading to increased regulatory scrutiny.  As a result, all companies that employ the process face substantial business risks. These can be reduced through adoption of precautionary best management practices.

As the use of hydraulic fracturing skyrockets, communities, regulators and investors are growing increasingly concerned about the environmental impacts of this process. Regulation at the state or federal level could have dramatic implications for all companies engaged in hydraulic fracturing by subjecting them to EPA oversight, potentially restricting areas in which hydraulic fracturing may be performed, limiting materials that may be used, or otherwise increasing costs.   Consequently, investors are seeking more information about company policies that, by minimizing environmental and associated business risks, will reduce uncertainties associated with possible regulatory changes.

In an effort to learn more about environmental and related business risks faced by companies using hydraulic fracturing for natural gas development, investors and investor advisors including As You Sow, Catholic Health East, Catholic Healthcare West, First Affirmative Financial Network, Green Century Capital Management, MMA Praxis Mutual Funds, the Mercy Investment Program, Miller/Howard Investments, the New York State Common Retirement Fund, Pax World Management, the Shareholder Association for Research & Education, the Sisters of St. Francis of Philadelphia, the Sustainability Group, and Trillium Asset Management have engaged approximately 20 natural gas companies through letters, phone calls, and meetings. Investor engagement has been organized by Green Century Capital Management and the Investor Environmental Health Network.

Now, if we can find out what’s in the oil dispersants being used in the Gulf.

Continue Reading ·

Turned Down at WFMI Again: Still, There is Progress

John Chevedden helped me draft and defend a resolution at Whole Foods Markets that requests the Board to adopt a policy establishing an engagement process with proponents of shareowner proposals supported by a majority of the votes cast, excluding abstentions and broker non-votes, at any annual meeting. It seemed like a rather straight-forward and simple request to me.

If shareowners vote in favor of a proposal and the board doesn’t implement it, such as the simple majority-voting proposal which won our 57%-support at our 2009 annual meeting, Whole Foods would set up an independent board committee, schedule a telephone meeting with the proposal proponent, and would present the proposal with the committee’s recommendation to the full Board.

Well, I guess this type of proposal is a little new or maybe I’m viewed as a bomb-throwing radical by some for proposing that a company at least discuss a shareowner proposal with the proponent before deciding not to implement it after it is passed by a majority of votes cast. The proposal only got 39% of the vote.

Another simple-majority voting proposal this year from John Chevedden won 58% this year. Will they ignore it again?

The proposal for CEO succession planning from the Central Laborers’ Pension Fund fared worse, only got 30% of the vote. Even living on a diet of whole foods, Mackey won’t be forever. Isn’t it good to plan ahead?

In addition to passing a second simple-majority proposal, shareowners also approved a resolution from Amalgamated Bank’s LongView Funds would roll back a bylaw change that Whole Foods directors put in place a few months after the SEC closed an investigation into the online chat activities of  John Mackey in April 2008. The proposal would permit sharewners to remove a director either “with or without cause.”

When they lowered their standards to with cause only, the board redefined “cause” narrowly as covering only a criminal indictment or a judicial finding that a director had breached his or her fiduciary duties to the Company or was not capable of performing a director’s responsibility.

I’m glad to see this proposal won 53% support. “We are pleased that investors have supported this call for the Board to reinstate fundamental shareholder rights,” said Scott Zdrazil, Director of Corporate Governance for Amalgamated Bank. “We encourage the Board of Whole Foods to be responsive to shareholders and to take the necessary steps to implement the proposal.”

All the proposals were reasonable and deserve full consideration by the board.

When Mackey was pretending to be someone else in the Yahoo! chat room, he said shareowner proposals turn annual meetings into “a circus.” Yet, I understand, it was Whole Foods employees who applauded management and heckled at least one shareowner for speaking during the Q&A portion of the meeting. Did Canadians suddenly become less polite after the Olympics (the meeting was held in Vancouver) or were these imported Americans, specially trained by Mackey in how to misbehave?

In part, I’m teasing but I also believe shareowners should be treated with respect. Discussing the issues should be a major portion of any annual meeting, especially one like WFMI, which has chosen to ignore the expressed will of the owners.

Continue Reading ·

Powered by WordPress. Designed by WooThemes