As 2013 draws to a close, it’s time to inventory the year’s proxy resolutions introduced by the Interfaith Center on Corporate Responsibility. ICCR, a group purportedly acting on religious principles and faith, is actually nothing more than a shareholder activist group engaged in the advancement of leftist causes at the expense of their fellow shareholders and the world’s poorest.
ICCR recently released its 2013 Annual Report. Its “2013 Proxy Season Recap” (pp. 16, 17) presents a snapshot of initiatives ICCR members pursued this past year. The foundations for several categories betray the left’s tenuous grasp of science and economics while, at the same time, displaying a perverse naiveté regarding the potential negative consequences of their respective crusades.
Fortunately, all the worst proposals failed. As noted previously, ICCR shareholder resolutions are drafted by Bruce Freed, president of the George Soros-funded Center for Political Accountability (CPA). Both Freed and ICCR boast huge successes for their resolutions, assertions that rely on extremely fuzzy methodology that excludes abstention votes.
For example, ICCR member Nathan Cummings Foundation submitted a shareholder resolution to Valero that would require disclosure of political and lobbying expenditures. According to ICCR, the NCF resolution garnered 42.8 percent shareholder support. However, this number is correct only insofar as ICCR counts votes for and against the resolution. Valero’s proxy statement notes that abstentions are to be counted. Herewith the raw numbers for the NCF resolution vote:
BROKER NON-VOTES: 60,276,728
Following Valero’s formula of dividing votes “for” by the total number of “present” votes results in 36.99 percent – a 6 percent difference from the ICCR and CPA calculations.
In addition to political expenditure and lobbying disclosures, ICCR submitted resolutions regarding such initiatives as global warming, hydraulic fracturing and genetically modified foods. In each instance, the percentage of votes ICCR claims in support of their initiatives appears only to reflect a percentage of actual yes/no votes while ignoring abstentions.
Let’s take a peek at how ICCR fared in each category – forgiving your writer a degree of schadenfreude at how each went down in flames – beginning with global warming:
Controlling global warming has become one of the most urgent issues of our time. A resolution calling for a report of companies’ fugitive methane emissions won 38%, 35% and 21% at ONEOK, Spectra and Range Resources, respectively. A resolution asking ConocoPhillips to adopt GHG reduction goals won 29% of the vote. Stryker announced that it would begin conducting a GHG inventory and setting a reasonable baseline in order to adopt quantitative reduction goals. A resolution asking PNC Financial to assess the impact of its lending activities on GHG emissions won 22.8%.
ICCR fared somewhat better with hydraulic fracturing proposals:
Hydraulic fracturing is a controversial method of natural gas extraction due to its potentially deleterious impacts on local community water supplies. Shareholders sent Chevron and ExxonMobil resolutions asking them to report on how they were managing risk in their shale/fracking energy operations. Both resolutions won strong support, each achieving 30.2%.
The above begs whether 30 percent can be considered “strong support.” And this on GMOs:
This year, ICCR members asked 7 corporations to consider labeling their GMO foods and seeds, and to report on the risks of GMOs. ICCR withdrew 3 resolutions after reaching agreement (Dow, ConAgra, Pepsi). Pepsi agreed to acknowledge its dialogue with ICCR on GM foods in its 2013 proxy, and committed to seeking ICCR input on the issue of labeling. ConAgra agreed to make a public statement on GMOs on its website.
ICCR members have been seeking increased transparency around corporate lobbying, and withdrew 8 of their resolutions (3M, AT&T, Bristol-Myers Squibb, CCA, PepsiCo, Reynolds American, Wells Fargo, Xcel) this year after reaching agreements. Lobbying resolutions were big winners this year with 16 garnering 25% or higher, and one AlliantTechsystems – winning nearly 65%.
I never took a statistics course in college, and if I did the best conceivable outcome on any test would be a dismal 65 percent. Furthermore, one company at 65 percent may represent a victory, but celebrating “16 garnering 25% or higher” seems delusional. Finally, political contributions:
Post the 2010 Citizens United ruling, transparency around corporate political spending has become a major issue for investors. ICCR members withdrew 4 resolutions this year (CenturyLink, JPMorgan Chase, Mylan, Wellcare) in exchange for agreements with companies to be more transparent about their political spending activities. Five resolutions (AT&T, Danaher, Dentsply, Hess, Spectra) won 25% or more of the vote. One hybrid Valero resolution addressing both contributions and lobbying won an impressive 42.8%
Forty-two percent is “impressive”? In the words of John Stossel: “Gimme a break.”
In conclusion, ICCR members submitted 221 shareholder resolutions at 154 companies in 2013. Seventy-eight resolutions were withdrawn – ICCR’s website attributes this to “most as a result of agreements negotiated with management” without providing any supporting data for the “most” claim – and most if not all of the remainder failed either on their merits or other shareholders abstaining from voting against ICCR’s leftist resolutions. One can anticipate ICCR remains undeterred for the 2014 proxy season, and will persist in their wrongheaded drive to squander corporate resources at the expense of company profits, shareholder dividends, employee compensation and the financially disadvantaged who will experience higher costs as a result. More’s the pity.
Robert Kennedy notes Christian social thought has paid less attention to business than the prevalence of the latter would merit. Professor Kennedy, with experience in the business world and expertise in theology and management, begins to redress this deficiency in this monograph.