Shareholder Advocacy
Foundations can be active in shareholder—in effect “shareowner”—advocacy, acting on issues raised by shareholders that have environmental, social, or governance implications for foundations, and considered within the sphere of mission investing.
As part of developing a mission investing strategy, foundations may wish to consider how they will treat proxy voting, corporate engagement, and shareholder resolution filing. Formal proxy voting policies (See an example, Vermont Community Foundation Proxy Voting Guidelines-PDF, Nathan Cummings Foundation Proxy Voting Guidelines-PDF) that identify key issues are one such strategy.
Many foundations and other organizations have chosen to file shareholder resolutions as part of their mission investing strategies. For example, see the resultions filed by The Nathan Cummings Foundation regarding climate change in the homebuilding (filed with Lenna/Pulte Homes/Ryland/Standard Pacifc-PDF) and energy (filed with Ultra Petroleum-PDF) industries as well as a petition relating to executive compensation (filed with UnitedHealth-PDF).
Social investors, and increasingly all investors, have developed a set of resources to disseminate information on shareholder advocacy campaigns and tactics. These include coordinated efforts to engage corporations on issues like climate change, broad efforts at coalition building around advocacy, guidebooks on proxy voting by year, and calls for support for specific shareholder resolutions.
A challenge for many investors is figuring out how to exercise their rights and take action. Shareholders often have a hard time keeping track of when the companies in their portfolio are meeting and understanding the issues on the ballot. Nonprofit organizations provide tools to help overcome barriers and use their voting power to affect change in the companies they own.
While foundations can use internal staff to vote their proxies on stocks they own they might also use proxy voting services such as Egan-Jones, Glass, Lewis & Co., Proxy Governance, and RiskMetrics Group (names mentioned here do not imply an endorsement by the More for Mission Campaign Resource Center or the More for Mission Campaign). We welcome feedback on experiences with proxy voting services.
Nine companies have been named to a Climate Watch List based off of concerns by leading U.S. investors that the firms are lagging in their response to the business challenges presented by climate change.The shareholder filings are coordinated by the Ceres investor coalition and the Interfaith Center on Corporate Responsibility (ICCR), a group of faith-based investors. (See press release)
Shareowners.org is an effective advocacy tool to engage the broader public on the proxy access rules that all investors abide by.
Proxy Access and the Waters/Peters Amendment: Debunking the Myths (Download PDF) provides clarification on common misinterpretations of the Waters/Peters Amendement.