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The
Carolina Shareholder Advocacy Initiative is an effort by CRA-NC to
encourage and enable investors and community groups to address issues
affecting our communities through shareholder advocacy.
Recent
CRA-NC Shareholder Resolutions
H&R
Block
Wells
Fargo & Company
Republic
Bancorp, Inc.
How
You Can Get Involved:
CRA-NC is a resource for investors
and community groups wishing to get involved in shareholder advocacy.
Congregation
Empowerment
How
CRA-NC Can Assist You:
· Providing guidance on
which companies to invest in for screening, proactive
investing or filing shareholder resolutions both one-on-one and
via a ranking system of financial institutions
· Fundraising
support in some cases
· Coordinating
groups and investors to increase voting power and effectiveness
· Assisting with
campaigns in support of shareholder proposals
·
Referring investors to
the Duke Law School Community Enterprise Clinic for free
legal assistance in filing shareholder resolutions
Who's
Involved in Shareholder Advocacy?
Both
individuals and institutional investors, such as pension funds,
religious groups, community groups and foundations use shareholder
advocacy to promote corporate responsibility.
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What
is Shareholder Advocacy?
Shareholder advocacy is one of a variety of
shareholder activism strategies, which also include screening and
proactive community investing. Shareholder
advocacy promotes socially responsible business practices to improve
corporate citizenship. As
owners of a company, shareholders have an interest in the long-term
impact of a company’s policies and practices on the broader community,
as well as its financial performance.
Shareholder
advocacy generally consists of dialogue and formal resolutions.
Shareholder dialogue includes discussions and/or negotiations
between shareholders and company management.
It can include letters written to management by concerned
investors, as well as face-to-face discussions.
A shareholder resolution is a formal recommendation or request
that a company take a particular action.
What
is a Shareholder Resolution?
A
shareholder resolution is a formal recommendation or request that a
company take a particular action.
The proposal is presented to all of the company’s shareholders
and voted on at the company’s annual meeting through the proxy
process.
Shareholder
resolutions address issues of corporate governance or corporate social
responsibility, among other matters.
What
are the Requirements?
The shareholder resolution process is overseen by
the Securities and Exchange Commission and persons filing resolutions
must comply with certain requirements.
Some
of the most significant requirements include:
· A shareholder
must have owned at least 1% or $2,000 of the corporation’s stock for
at least one year prior to filing the resolution
· The resolution
must be submitted by a specified deadline
· The proposal must
meet relevancy and other requirements
· The sponsor of
the proposal or a designee must present the proposal at the annual
meeting
· A
shareholder can submit only one proposal per year
Does
Shareholder Advocacy Work?
Shareholder advocacy can be effective in raising a
corporation’s awareness of community concerns, facilitating dialogue,
and creating positive change. The
success of shareholder advocacy cannot be measured only by the number of
votes received. Even a
relatively small share of votes can indicate interest and concern among
shareholders and the public. As
a result, it is often enough to encourage management to enter into
dialogue that leads to changes in corporate policies and practices.
For
example, shareholder advocacy has aided in:
- Restricting
harmful infant formula marketing by pharmaceutical companies in
developing countries
- Convincing
companies to diversify their corporate boards and workforces
- Improving
working conditions at various factories
Despite these significant
successes, this work is challenging and shareholder advocates must be
strategic in their shareholder campaigns and realistic about what they
can accomplish. Voting your
shares and speaking out is an essential element of corporate democracy.
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