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Religious Shareholder Activism an Inside Job to Harm Companies and Investors

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The Manhattan Institute Centers’s “Proxy Monitor Season Wrap-Up” is hot off the press, and the findings presented by author James R. Copland, are remarkable.

Since 2011, MIC has monitored shareholder activism, which it describes as efforts “in which investors attempt to influence corporate management through the shareholder-proposal process.” This year’s wrap-up includes MIC-researched data from corporations’ annual meetings held by the end of June 2015. By that time, “216 of the 250 largest U.S. companies by revenues” had completed their meetings, which enable long-term shareholders owning $2,000 of equity securities to introduce proxy resolutions.

Among these proxy activists are As You Sow, the Nathan Cummings Foundation and the Interfaith Center on Corporate Responsibility – groups with religious backgrounds and decidedly leftist ideological agendas – and a host of likeminded crusaders of progressive causes:

Among social investors, only As You Sow introduced more than five proposals in 2015 (seven). Many other socially oriented investors sponsored multiple proposals, however: social-investing platforms Arjuna Capital (three), Domini Social Investments (three), Green Century Capital Management (three), Investor Voice (five), Northstar Asset Management (two), Trillium Asset Management (four), and Walden Asset Management (four); religious investors Congregation of Sisters of St. Agnes (two), Sisters of Mercy (five), Province of St. Joseph of the Capuchin Order (two), Sisters of St. Dominic (two), Sisters of St. Francis (three), and the Unitarian Universalist Association of Congregations (two); the public-policy group National Center for Public Policy Research (two); and the Nathan Cummings (two) and Park (three) charitable foundations.

According to Copland’s report, religious shareholder activists were responsible for 29 percent of all resolutions submitted to the 216 Fortune 250 companies. What type of proposals did the nuns, clergy and other religious submit? According to Copland:

As was the case in 2006–14, shareholder proposals relating to social or policy concerns constituted a plurality of all such proposals in 2015 (43 percent). Close behind were proposals relating to corporate-governance issues (42 percent)….

As for subclasses of proposal, environmental concerns were introduced most often in 2015 (58 proposals). Proposals related to political spending or lobbying—the most-introduced subclass in 2012, 2013, and 2014—were the second-most numerous (49 proposals).

All told, social issues and policies accounted for 43 percent of all resolutions submitted. Yet none of them passed. Zero. Nought. Zed. Zilch. A big fat nothing:

No shareholder proposals related to social or policy issues received majority support—in keeping with each of the nine prior years in the ProxyMonitor.org database, when not a single social-policy-related shareholder proposal has received the support of a majority of shareholders over board opposition.

No harm, no foul, right? Not so fast. Copland continues:

To be sure, [carbon-intensive coal, oil and gas, and utility companies] may face peculiar regulatory risks, if rather obvious for energy and utility companies and their investors. (The risks that climate change itself may place on such companies’ business models are too far in the future—and thus too discounted to present—to concern shareholders focused solely on share price, aside from sociopolitical or regulatory concerns.) Yet beyond changing their line of business or increasing lobbying or political activity, there is little that such companies can do to mitigate such risks—and the former (but not the latter) would almost certainly be inimical [emphasis in original] to share value.

Got that? The 58 environmental proposals work in tandem with the 49 resolutions to curtail corporate political spending when it comes to reducing shareholder value. Let’s put it this way, any utility company would lose value if it complied with the activist shareholder agenda regarding climate change. The same utility company also would lose value if it didn’t invest in lobbying efforts in the company’s – and its investors’ (not to mention customers’ and employees’) – best interests. Such lobbying includes countering astronomically expensive government bureaucratic emission-reduction edicts and regulations with little or no empirical proof such measures will result in any positive difference.

Inimical indeed. Yet, religious shareholder activism trundles on unabated, its crusade an inside job to harm corporate profitability and shareholder value. It’s shameful and antithetical to any concept of moral principles promulgated by any major religion with which this writer is familiar. More’s the pity.

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Bruce Edward Walker has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. He was managing editor of The Heartland Institute's InfoTech & Telecom News from 2010-2012. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2011 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past five years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Flint, Mich., with his wife Katherine.

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