Yesterday, on the eve of today’s open meeting at the Securities and Exchange Commission to explore the possibility of putting limits on “advisory” proxy resolutions, which by some estimates have accounted for 95% of shareholder proposals over the last 35 years, two investor groups promised to put up a fight.
The Social Investment Forum and the Interfaith Center on Corporate Responsibility issued a release saying they would resist such a move, reminiscent of the 1997-1998 shareholder rights battle. At that time, the SEC considered submitting a greater number of shareholder resolutions to reconsideration in subsequent years, and in response, more than 300 socially responsible investment, religious, labor and other groups opposed the move.
Social Investment Forum Chairman Tim Smith, who is also senior vice president at Walden Asset Management, said: “The right of investors to file resolutions and seek investor support when necessary should not be diminished in any way. We are serving notice to the SEC and others today that we will strongly oppose any move to take away shareholder rights to move advisory resolutions.”
John Wilson, a member of the board of governors at the Interfaith Center on Corporate Responsibility, said shareholder resolutions “are an important part of the exercise of our fiduciary duty as owners of companies. We can point to many examples where these resolutions have resulted in changes in company policies and practices that were beneficial to shareholder interests.”