Posts tagged with: Corporate governance

Blog author: bwalker
posted by on Monday, December 2, 2013

As noted here and here, Interfaith Center on Corporate Responsibility Executive Director Laura Berry was one representative of several groups asking the Securities and Exchange Commission to adopt new corporate political disclosure rules in October. Ms. Berry was joined by Sen. Elizabeth Warren (D-Mass.) and numerous other liberal/progressive advocates who wanted to put up regulatory roadblocks to corporate political speech guaranteed by the U.S. Supreme Court’s Citizens United ruling.

The SEC, however, determined it would not proceed with stifling free speech despite what the Washington Post described as

A groundswell of support … with retail investors, union pension funds and elected officials at the state and federal levels writing to the agency in favor of such a requirement. The idea attracted more than 600,000 mostly favorable written comments from the public — a record response for the agency. And with Mary Jo White’s arrival as SEC chairman in April, the initiative’s supporters hoped for action.

‘But she obviously did not really recognize the significance of this,’ said Bruce Freed, president of the Center for Political Accountability, which has pioneered the push for political spending disclosures. ‘She is not looking at investor protection and corporate governance broadly. You do not see those as primary drivers of her agenda.’ (more…)

Blog author: bwalker
posted by on Thursday, October 17, 2013

3708GSD_21136_CheerLH_V10L.tifThe 2013 proxy shareholder season is over, resolutions debated into their respective win/loss columns and reports filed. This hasn’t stopped those shareholder Godflies – the clergy, nuns and other religious on the left – from firing the first salvos for 2014 corporate battles. Among the companies targeted for the initial fusillade is General Mills Inc., purveyor of such perceived market atrocities as the Cheerios breakfast cereal and Yoplait yogurt. Specifically, the company’s packaging practices and use of genetically modified organisms has come under fire

Mind you, your writer has nothing against reasonably priced foods as part of a healthy, affordable breakfast. In fact, Cheerios was a “get-up-and-go” staple of this former farm boy’s life. Continuing the trend, a bag of those little grainy nuggets of morning goodness served church going well by quieting my rambunctious toddlers during innumerable Sunday masses. I do, however, rankle when so-called “religious” activists employ bad science to drive up food prices for those least able to afford it, especially families with young children.

As You Sow, a nonprofit shareholder advocacy group allied with such Godflies as the Interfaith Center on Corporate Responsibility and “social responsibility investment” firms Walden Asset Management and Trillium Asset Management presented a resolution to General Mills this past month that would have required the company to implement “extended producer responsibility” for packaging waste. Apparently, it’s incumbent upon the company to ensure cereal boxes and yogurt cups are recycled once consumers empty them. (more…)

Readers following my series of blog posts on shareholder proxy resolutions submitted by religious groups such as As You Sow and the Interfaith Council of Corporate Responsibility already know these resolutions have little to do with issues of faith. In fact, an overwhelming majority of these resolutions concern corporate speech and attempts to stifle it.

Your shareholders want to know more about your political spending. Really.

Your shareholders want to know more about your political spending. Really.

AYS and ICCR – as well as a host of other religious shareholders – submit proposals drafted by Bruce Freed, head of the Center for Political Accountability. Freed’s CPA and the Wharton Business School’s Zicklin Center, readers will recall, issued its annual index late last month. My last post detailed in part the wrongheadedness of shareholders pushing a political agenda at the expense of their fellow shareholders. However, I anticipate most readers require a bit more than your lowly scribe’s word that the CPA-Zicklin Index not only inflates the results of its shareholder resolutions but as well operates on behalf of groups more interested in shutting down corporate political speech.

The Center for Competitive Politics, a First Amendment nonprofit think tank located in Alexandria, Va., brings more firepower to arguments I’ve already made regarding the efforts of CPA and the proxy shareholders for whom Mr. Freed drafts resolutions. Regarding the CPA-Zicklin Index, CCP issued a statement by CCP Chairman Brad Smith, former Federal Election Commission Chairman:

To look at the CPA-Zicklin Index as a measure of ‘best corporate practices’ is like asking a wolf to describe ‘best practices’ for sheep … Corporations have an obligation to do what is in the best interest of their shareholders, not comply with the demands of a non- profit that opposes speech by the business community. (more…)

The 2013 “CPA-Zicklin Index of Corporate Policy Accountability and Disclosure” was issued Tuesday by the allegedly “nonpartisan” Center for Corporate Political Accountability – the “CPA” of the report’s title lest readers mistakenly read it as the objective analysis of a certified public accountant. The CPA referenced here is the organization operated by Bruce Freed, which shepherds proxy shareholder resolutions by left leaning “religious” shareholder activist groups as As You Sow and the Interfaith Council on Corporate Responsibility.

I haven’t taken the time for a deep-dive analysis of the report, but will do so most assuredly in the next few days. However, an initial reading of the Index’s Executive Summary must suffice for the moment. In short … poppycock. And piffle. Even preposterous.

Allow me to set the record straight. Ten years ago, CPA “began engaging corporations to voluntarily provide disclosure and oversight of political spending,” asserts Mr. Freed – if by “voluntarily” Mr. Freed means mounting a campaign of deceit against corporate political spending employing all means necessary to embarrass or otherwise shame companies to bend to the will of leftist, post-Citizens United, “corporations/bad. unions/good” ideology.

Mr. Freed and the faith-based shareholders for whom he writes proxy resolutions remain in a tizzy regarding those companies that spend lobbying or other political cash on causes and campaigns with which the left disapproves. In an environment of growing Leviathan and concomitant increase in regulatory restrictions emanating from government agencies, companies have little choice to ensure their own and employees’ survival as well as the profitability of shareholders than to engage in the political process. Indeed, to voluntarily withdraw from these policy debates would be nothing less than reckless disregard for political reality today.

So let’s break this down further: Unions spend members’ dues on political causes that tilt left whereas corporations spend company proceeds on causes that tilt right. Union spending rarely is called into question as it’s a given they’ll spend it on liberal candidates and agendas. Woe be unto those corporations, however, which endeavor to engage politically – even  privately – in the interest of their companies, employees, customers and shareholders. (more…)

Shareholders’ boardroom clout increases” touts the website at the Interfaith Council on Corporate Responsibility The linked article takes readers to an August 20 essay by Sara Murphy at The Motley Fool in which the author asserts: “New research out today from the Sustainable Investments Institute, or Si2, shows that investors are filing more environmentally and socially themed shareholder resolutions now than ever before, and those resolutions are getting more support during proxy voting than they ever have.”

Not so fast, Ms. Murphy. This week another story unfolded, courtesy of The Manhattan Institute Center for Legal Policy. MI’s third annual Proxy Monitor, authored by James R. Copland and Margaret M. O’Keefe, counters the ICCR and Murphy narrative significantly. It appears the ICCR folk were distracted after reading the reports first finding:

The number of shareholder proposals introduced is up. The average Fortune 250 company faced 1.26 shareholder proposals on its 2013 proxy statement, up slightly from 1.22 proposals per company in 2012. This trend also holds when considering the 104 proposals excluded from proxy ballots after companies received a letter from the Securities and Exchange Commission assuring them that the agency would take no action against the company due to the proposal’s procedural or substantive defects.

So distracted by the presumed good news, in fact, they neglected to read the subsequent findings:

Support for shareholder proposals is down. Only 7 percent of shareholder proposals received the backing of a majority of shareholders in 2013, down from 9 percent in 2012. A smaller percentage of shareholder proposals passed in 2013 than in any other year in the 2006–13 period. Among the 20 proposals receiving majority support, 13 involved just two issues: whether to elect all corporate directors annually and whether each director should be required to receive a majority of votes cast to be elected.

And this: (more…)

Shareholder activism, according to the headline in the most recent issue of PRWeek, is “rising” and “big companies [are] in crosshairs.” The ensuing article by Brittaney Kiefer, begins:

Shareholder activism used to be just a nuisance that arose during proxy season, involving a group of contentious investors who tended to target smaller or less established companies.

However, in recent years activists have set their sights on larger companies, and more traditional investors are joining those fights. As shareholder activism goes mainstream, companies are becoming more proactive in engaging investors year-round, communications professionals say.

Ms. Kiefer’s article is a fine example of objective reporting on the growing trend of shareholder activism, but she avoids untangling the Gordian knot of interests behind these increasingly concerted efforts by leftist activists. These efforts include the recruitment of such religious-based investment groups as Walden Asset Management, the Interfaith Center on Corporate Responsibility, the Needmor Fund and various and sundry Unitarian Universalist collectives to sprinkle – albeit disingenuously – holy water on the whole progressive agenda. Explains Kiefer:

An activist shareholder is an investor who attempts to use his or her stake in a publicly traded corporation to affect change at the company. Activists often launch campaigns that put public pressure on companies, tackling issues such as executive compensation, management structure, or corporate strategy.

Sounds rather benign, no? Actually, as noted here and here, these groups have metastasized from mere nuisance to genuine threats to not only corporate (and shareholder) profitability, but to free speech (including scientific debate) and helping the nation’s (and world’s) poorest. (more…)

The Aug. 26 edition of the Wall Street Journal features a compelling opinion piece by Susan Combs, the Texas comptroller of public accounts. Ms. Combs correctly assesses the inherent responsibility of public pension funds to the businesses in which they hold shares. Namely, they should ensure company profitability rather than push agendas that may harm market share and growth.

Just so. Writes Combs: “Not long ago, people who used their few shares to push a point at shareholder meetings may have been marginalized as oddballs. Today, hedge funds and other major players are using their clout to lobby for – and get – big changes in corporate governance.”

Whatever this activism has to do with the ethical obligations of shareholders to one another is beyond the comprehension of Combs and, frankly, your writer. Such has been one theme of my repeated cavils related to the so-called religious-based shareholder activists who submit proxy resolutions year after year related to overturning Citizens United, limiting the depiction of tobacco use in film and television, curtailing hydraulic fracturing and taking expensive measures to avert global warming.

One may agree or disagree with the activists’ point-of-view on any of these given topics, but as Combs notes:

Putting public funds in the activist arena in this way strikes me as seriously bad policy. As the comptroller of public accounts for the state of Texas, I have to manage billions of dollars in taxpayer money, and I have a fiduciary obligation to achieve the very best returns possible. This is a rock-bottom, non-negotiable duty that goes with the office. Our “shareholders” are the tax-paying public.

The same holds for private investments made on behalf of clergy, nuns, and other religious. Many investment opportunities exist for companies more than willing to comply with ill-founded science, questionable public policy, and social progressivism. (more…)

Blog author: bwalker
posted by on Wednesday, August 14, 2013

As a child of the 1970s, your writer was witness to an amazing transformation in a large swath of the religious community. In what seemed like a wink of an eye, clergy, religious and nuns grouped together with yippies, hippies, and other left-of-center tribes to advance progressive causes. Never you mind that much of these initiatives have little overlap with Judeo-Christian principles, just believe in your heart that Jesus would oppose genetically modified organisms and the U.S. Supreme Court’s Citizens United ruling, while championing diversity and staunchly advocating the curtailment of greenhouse gases.

Of the above bugbears embraced as major issues by progressives, perhaps none resonates more than overturning Citizens United. Why, you ask? Because a reversal of the SCOTUS decision would tilt political discourse decidedly to the left, making all other issues fall like so many dominoes toward larger government, higher taxes and exponentially more regulations.  Take away businesses’ political voice and you’re left with nothing but one side of the debate.

This was the topic I watched debated on July 12 in Seattle at the Society of Corporate Secretaries & Governance Professionals’ Governance/Wired Conference. I attended the conference to help clarify the political spending and disclosure policies that seem to be front-of-mind for the shareholder-activist members of the Interfaith Center on Corporate Responsibility and As You Sow I’ve written so much about for Acton these past few months.

The debate featured Brian G. Cartwright, senior adviser, Patomak Global Partners, as advocate for Citizens United, and Bruce F. Freed, president and founder, Center for Political Accountability, arguing that the ruling posed grave threats to current political speech. Freed’s CPA nonprofit, incidentally, authored many of the campaign-finance proxy resolutions issued by shareholders.

Freed rhetorically asked: “Why is disclosure important?” and answered: “To reduce shareholders’ risk” by preserving the reputation of the business in which they hold stock. Among the threats listed were potential legal issues and risks of extortion. (more…)

Blog author: bwalker
posted by on Tuesday, June 11, 2013

In a May 28, Huffington Post article, Rev. Seamus P. Finn, OMI, exhibits a woeful lack of economic knowledge. In most cases members of the clergy can be forgiven somewhat for getting it so utterly and completely wrong. After all, few people go into the ministry because they’re fascinated with things like lean manufacturing techniques or monetary policy. But in this instance Finn must be taken to the proverbial woodshed for a lesson in what truly benefits the world’s poor.

Why Finn and why now, you ask? Most important, because he represents the Missionary Oblates of Mary Immaculate, and represents the Oblates as a board member at the Interfaith Center on Corporate Responsibility. He also serves on the executive committee of the International Interfaith Investment Group (IIIG). From this resume, one might gather that he is influential with the faithful on financial and business matters.

PowerBlog readers who have been following my series of posts on religious-based shareholder activism these past few months may recall my coverage of several ICCR proxy resolutions submitted to a host of companies this spring. I called attention to these resolutions because they draw more from leftist ideology than they do from centuries of deeper Christian thinking on social problems.

Now comes Finn with a HuffPo piece linking ICCR and IIIG initiatives with recent statements made by Pope Francis. While the current pope is no fan of capitalism – read about his views of the market economy here and here on the PowerBlog – Finn apparently despises it outright. (more…)

As keystroke was committed to screen in the writing of this post, J.C. Penney honcho Ron Johnson received his walking papers. This after it was announced last week that the ousted CEO had his pay cut 90 percent– tanking his 2012 salary to a mere $1.9 million from a sum north of $50 million in 2011.

With numbers like that, Johnson more than likely won’t apply for unemployment benefits anytime soon. But his compensation unfortunately will add more fuel to the fire of those proxy shareholders advocating for “say on pay” rules for upper management.

For example, The Nathan Cummings Foundation submitted a proxy shareholder resolution to Caterpillar Inc. that reads: “The shareholders … ask the board of directors to adopt a policy that incentive compensation for senior executives should include a range of non-financial measures based on sustainability principles and reducing any negative environmental impacts related to Company operations.”

According to its website, NCF “is rooted in the Jewish tradition and committed to democratic values and social justice, including fairness, diversity, and community. We seek to build a socially and economically just society that values nature and protects the ecological balance for future generations; promotes humane health care; and fosters arts and culture that enriches communities.” (more…)