Occupy Shareholders Engaging with Shareholder Resolutions? It’s Happening. . . .

January 3, 2012; Source: Triple Pundit | Why did 2011 break all previous records in the number of shareholder resolutions pursued in the corporate sector? Did the societal frustration with the concentration of wealth and power in corporate America lead to both the Occupy movement and the increase in shareholder actions to push for change in the corporate sector?

Drawing on data presented earlier in the fall on a Harvard Law School blog by Heidi Welsh, executive director at the Sustainable Investments Institute(Si2), which catalogued 404 shareholder resolutions in 2011, Triple Pundit reports that the number and support for shareholder resolutions increased in 2011. The intriguing Si2 findings include average shareholder support for these resolutions topping 20 percent, 21 of the resolutions receiving at least 40 percent support, and 5 getting the support of half of the voting shareholders (or “shareowners,” as Si2 likes to call shareholders who actively exercise their rights as owners of the corporations in which they invest).

Why make the connection to the Occupy movement? The most well known or common shareholder resolutions are environmental (about 25 percent of the total) with coal use and hydraulic fracturing rising in visibility as shareholder resolution issues. But the number of shareholder resolutions aiming at corporate political spending grew by 50 percent last year, targeting lobbying expenditures, disclosure of political spending, and corporate support of politically involved trade associations.

Triple Pundit suggests that the growth of proxy voting actions is partly attributable to the online services that shareholders can use to organize themselves and file resolutions, such as Proxydemocracy, Moxyvote, and Transparent Democracy. That may be true for explaining the greater ease in filing shareholder resolutions, but not necessarily the greater interest of institutional shareholders in pushing for corporate changes.

In light of NPQ’s ever-increasing attention to the secret funding of 501(c)(4) organizations by corporations for political purposes—a dynamic that increased rapidly in 2011 as special interests took advantage of the green light given by the SCOTUS decision in Citizens United v. FEC—shareholders’ interest in getting their corporations to disclose their spending is heartening. According to Si2, proposals asking for spending disclosure got support above 20 percent, with resolutions offered by the Center for Political Accountability topping 34 percent support levels. Political disclosure resolutions topping 40 percent support were aimed at firms such as Halliburton, Lorillard, and Spring Nextel. A new trend in resolutions, tried at Home Depot and Procter & Gamble, was to request that shareholders get an advisory vote on corporate political expenditures.

These shareholder resolutions reflect an increasing interest in democratizing corporate America and in restoring some of our nation’s lost small “d” democratic impulse in general. Given the unfortunate track record of the nonprofit sector’s largely defending the ability of corporations to put money directly—and secretly—into 501(c)(4)s for partisan political purposes, we wonder how many of the political spending disclosure resolutions got the support of 501(c)(3) foundations.—Rick Cohen

About

Rick Cohen

Rick joined NPQ in 2006, after almost eight years as the executive director of the National Committee for Responsive Philanthropy (NCRP). Before that he played various roles as a community worker and advisor to others doing community work. He has also worked in government. Cohen pursues investigative and analytical articles, advocates for increased philanthropic giving and access for disenfranchised constituencies, and promotes increased philanthropic and nonprofit accountability.