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September 3 , 2007 • VOL. 45, NO. 15 • Oakland, CA
Faith-based
investors say proposed
rule could gut shareholder rights
WASHINGTON (CNS) — In the 10 years since John Wilson joined Christian
Brothers Investment Services, the number of shareholder resolutions filed
by the socially responsible investment firm has decreased and the number
of resolutions withdrawn after being introduced has increased.
That might not sound like progress, but for Wilson and others in the corporate
responsibility movement it means that the boards of large corporations
are now willing to dialogue with shareholders about climate change, compensation
for top executives, human rights and other social justice issues. With
dialogue, the shareholder resolutions are no longer needed to push a company
toward doing the right thing.
But the progress could come to a screeching halt if a rule proposed by
the Securities and Exchange Commission is adopted, according to Wilson
and others.
The proposal, which would revise SEC Rule 14a-8, could limit the right
of shareholders to sponsor advisory resolutions by requiring the prior
approval of shareholders who together hold at least 5 percent of all company
stock.
Although advisory resolutions are not binding on corporate boards, they
play a major role in raising important issues. Stockholders exercise their
ownership rights in a corporation by proxy — designating another
person or entity to represent them in a vote — or in person at the
annual meeting.
An action alert on the Web site of Christian Brothers Investment Services
urges all faith-based institutional investors to contact the SEC and its
chairman, Christopher Cox, to express their opposition to any changes
that would weaken shareholder rights.
The SEC is accepting public comment on the proposed rules — which
also involve new disclosure requirements for filers of shareholder resolutions,
changes that would allow the use of new technology in shareholder meetings,
and other matters — until Oct. 2.
