Tag Archives | Timothy Smith

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 →

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Virtual-Only Meetings: The Nuclear Option

Virtual-Only Meetings Growth

Virtual-Only and Hybrid Meetings Data Reported by Broadridge in the FT

Virtual-Only Meetings are quickly being adopted by entrenched boards who fear both adverse publicity and any attempt by shareholders, especially retail shareholders, to hold them accountable. Broadridge Financial Solutions ($BR) has a direct financial incentive to push companies toward virtual-only meetings. Although many funds and organizations oppose such meetings, no one in the opposition has a such a direct financial incentive to oppose them. 

Take Action: Vote against any all all directors serving on governance or similar committees at companies that hold virtual-only meetings.  Continue Reading →

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Tim Smith Honored by ICCR

Tim Smith (a few years back)

Tim Smith (a few years back)

On September 29, 2016 Tim Smith, Walden Asset Management’s director of ESG Shareowner Engagement, will be honored at the annual event of the Interfaith Center for Corporate Responsibility (ICCR) for his decades-long, indefatigable leadership shaping the landscape of shareholder advocacy for more just and environmentally sound business policies and practices.

Tim is the first secular recipient of the ICCR Legacy Award, a recognition of his nearly quarter-century history at the helm of ICCR as well as 16 years at Walden where he continues to demonstrate daily how shareholder leverage can be an effective vehicle for positive change.

ICCR describes Tim as having had a profound impact on the field of sustainable and responsible investing, noting:

Tim plays a valuable role in virtually every ICCR program area but has been an especially effective leader of investor engagements on climate change and on governance topics including lobbying and political spending, executive compensation and separate Chair/CEO, as well as board diversity.

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Lobbying Disclosure: Companies Respond

lobbyingShareholders have been urging companies to fully disclose the lobbying they do directly and through trade associations and third parties for six years now. This year 66 investors joined in filing resolutions with 50 companies seeking expanded lobbying transparency. Twinned with calls for disclosure of political spending aimed at affecting elections, this effort has had a steady positive effect. For example, this year companies including Raytheon, CenterPoint and DuPont came to agreements with investors to expand their lobbying disclosure.

We also find that many companies, even if they do not want to fully disclose, have expanded their reporting on items like Board oversight, priority issues they lobbied on, whether and when they did grassroots lobbying, making it easier to access their quarterly Senate reports or disclosing specific dollar amounts spent on federal lobbying. Continue Reading →

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Preliminary Proxy: Illinois Tool Works and Huntington Ingalls Industries

Huntington Ingalls Industries (HII)Illinois Tool Works - ITWMissing from the preliminary proxy statements of Illinois Tool Works $ITW and Huntington Ingalls Industries $HII are special meeting proposals from William Steiner, even though the SEC months ago withdrew no-action letters previously issued to the companies. (Illinois Tool Works and Huntington Ingalls Industries)  Shareowners of these companies might want to inquire as to why the proposals were left off preliminary proxy statements. (see ITW and HII statements) Continue Reading →

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Walden’s BNY Mellon Proposal Seeks Review of Proxy Voting Policies

Walden Asset ManagementHere’s one of the most interesting proxy proposals I have seen so far during this new season. I wasn’t aware of similar resolutions filed by Zevin until recently notified by Timothy Smith. If BNY Mellon is a PRI signatory, why are they consistently voting against what PRI stands for? Let’s see more proposals like this. It is like calling out green-washers for polluting.  Continue Reading →

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Déjà vu: Shareholder Rights Under Attack

WaldenAssetManagement

Timothy Smith

Timothy Smith

The following on shareholder rights by Timothy SmithDirector of ESG Shareowner Engagement at Walden Asset Management, originally appeared in the Summer 2014 Edition of Walden’s Values Newsletter, which included the usual disclaimer at the bottom.

I’ve added the links and have tacked on some additional reformatted comments from Timothy Smith regarding the role of individual investors in prompting reform. 

Every once in a long while a group of companies, usually led by the U.S. Chamber of Commerce, launches a campaign to change the rules allowing investors to file shareholder resolutions. Welcome to the latest iteration. Continue Reading →

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Take Action: Comments on SEC Pay Ratio Rule Due 12/2/2013

The deadline for submitting comments on the SEC’s proposed pay ratio disclosure is coming up quickly on December 2, 2013. SEC general comment instructionsSubmit Comments on S7-07-13 Pay Ratio Disclosure. Get your comments in soon, before Thanksgiving. Another advantage to earlier submittal is that those who wait for the deadline are likely to borrow from previous submission. The earlier you submit, the more likely you are to influence others. For example, I am impressed by comments from the following: Continue Reading →

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Investors Press for Disclosure of Political Spending: Please Vote for Resolutions

Last week, investors announced  filing shareholder resolutions at more than 50 corporations as part of a 2013 proxy season initiative asking companies to annually report their federal and state lobbying, including any payments to trade associations used for lobbying as well as support for tax-exempt organizations that write and endorse model legislation.

Take Action: In his Citizens United dissent, Justice Stevens argued  the law should protect shareholders from funding speech they oppose. The majority, however, argued that Continue Reading →

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A Failure of Governance

Many leading companies strive to follow best practices in corporate governance, demonstrating responsiveness to investors and protecting shareowner value in the process. Paradoxically these same companies often appear to leave their commitment to good corporate governance at the doorstep when they serve on the board of the U.S. Chamber of Commerce (the Chamber). In so doing, they perpetuate a dismal failure of governance.

How so? Many of these companies demonstrate strong environmental and social policies and urge their suppliers to follow suit. Yet sadly, they are silent at Chamber board meetings despite the association’s aggressive actions to undermine sustainable business practices.

The Chamber has always been a powerful force in Washington, lobbying and influencing elections. In the last two years, led by CEO Tom Donohue, it has attacked a wide range of issues including healthcare, climate change, and financial market reforms. The Chamber announced it would spend $75 million in political campaigns in 2010 with one goal being to unseat all congressional members who voted for health care reform. The funds for this partisan political fight were raised and spent in secret, with no public accounting or transparency.

Similarly, the Chamber, allegedly on behalf of the business community, lobbies, speaks publicly and puts political dollars to work effectively challenging company positions on environmental matters. Recently, the Chamber sued the EPA to block its ability to mitigate climate change through regulation.

The Chamber’s website states:

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.

Hence Walden, with other investors, has discussed with dozens of companies how membership on the Chamber board may be perceived as supporting the Chamber’s policies. Sadly, we are learning that Chamber board members rarely speak out publicly, or even privately at Board meetings, to challenge its anti-environmental positions. Nor do they confront the Chamber on its partisan political activities.

Clearly there are multiple contradictions between the environmental policies of Accenture, IBM, Pepsi, Pfizer, and UPS – all board members – and the Chamber’s antagonistic actions against climate change legislation and regulation. Yet, as Board members they set and oversee these very policies and campaigns that undercut their companies’ positions – a perplexing way to spend shareowner dollars.

It is time for Chamber board members to end this pattern of compliant and passive acceptance. It is not acceptable to allow anti-environmental policies to flourish and partisan political campaigns shrouded in secrecy to be the order of the day. A respect for good governance requires companies sitting on the Chamber board to stand up and be counted or head for the exit.

Guest post by Timothy Smith, Senior Vice President and Director of ESG Shareowner Engagement at Walden Asset Management, a leader in socially responsive investing since 1975.  See also, Resolutions Challenge Chamber Board Members on Political Expenditures, 11/15/2010.

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Major Shift in Proxy Voting Policy at State Street

Last year Walden Asset Management filed a resolution at State Street Global Advisors (SSgA) seeking a proxy review. While SSgA successfully obtained a “no-action” letter from the SEC, their voting practices were still the subject of a debate at the annual meeting. This year United for a Fair Economy picked up the torch and filed a similar appeal. This time, SSgA responded positively and UFE has withdrawn its resolution.

Previously, SSgA voted automatically Against ALL shareholder resolutions on environmental and social issues, whether the issue affected shareholder value or not. Over the years this record had become increasingly controversial and was challenged by a number of SSgA clients including pension funds in Europe as well as investors and environmental groups here in the USA. An internal review found SSgA found its voting in stark contrast to State Street’s own forward looking record on the environment and other CSR issues.

State Street’s review included a comparison to other mainstream investment firms which are competitors. It found that the SSgA proxy voting was an “outlier” in comparison to these firms records. According to Timothy Smith of Walden Assets, SSgA will now abstain if the resolution’s economic impact case is not clear, but will vote FOR resolutions where a strong case regarding how this affects shareholder value is made. This is very similar to Risk Metrics position. SSgA notes it is understaffed to do robust proxy voting so may add staff and of course will look seriously at recommendations of proxy advisory firms they use.

Our congratulations to Walden’s Timothy Smith and to Mike Lapham of Responsible Wealth. This is a significant shift in proxy voting by a major firm. It is great to see SSgA now more fully addressing its proxy voting responsibilities.

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