Shareholder activism, Glasnost and dinosaurs…
Mikhail Gorbachev introduced Glasnost in the 80s…hoping he could moderate the abuse of administrative power in the Central Committee of the USSR. Gorbachev uncorked the genie of openness and transparency (see Wikipedia for full details) unleashing a pent up yearning for freedom. We all know what happened next–the iron curtain fell and democracies started popping up across eastern Europe.
It would have been great to have a Gorbachev like figure leading shareholders in the cause for more Glasnost from the boards of AIG, Lehman, Citi, etc. prior to the financial crisis. But, many Global companies have fragmented shareholder bases…and, while many change oriented shareholders out there want to stand up and do the right thing, it’s not so easy for shareholders to unite & make their voices heard.
Motivating shareholders to stand up for major social and environmental issues
Groups like the Interfaith Center on Corporate Responsibility and Ceres bring together institutional investors to tackle corporate governance issues such as global climate change. Both groups advocate for change via shareholder resolutions. Even the smallest of shareholders can partner for change and can put their vote forward in support of shareholder initiatives…if they are aware that they exist.
Unfortunately, I have never been involved personally in a shareholder cause/resolution on behalf of a social, enviro., or labor issue. Every time I stare through the fine print of one of my proxy voting cards, I find it difficult to quickly find the info I am interested in. If there were meaningful resolutions out there that I needed to vote on, I probably missed them. Granted, I try not to invest in companies with sketchy sustainability records, but that’s no excuse for me to not be aware of what organizations are debating within companies where I invest. Maybe I am also put off by the way corporate communications flow down to me as a shareholder. For example, annual shareholder meetings can all too often seem like a USSR gathering of the Supreme Soviet, where everything is already figured out and all too often shareholders just get the “dog & pony” show.
Tonight, though, as I skimmed though an article in the NYT on how the major Oil Giants (are) Loath to Follow Obama’s Green Lead, I wondered how many concerned investors were perhaps unwittingly holding “responsible” oil companies (like BP) within their mutual fund portfolios…yet are unaware that BP is currently paring back its renewable energy programs. So, if BP is paring back its focus on renewables, you can guess how Exxon and others are reacting.
Oil companies are clearly drifting away from their green position as they see that their profits are going to suffer in the near term. In that regard, they seem to me to be going down the same path as the U.S. car companies did 30-40 years ago. The future was actually pretty clear, but short term thinking won out and look where the US auto industry is now.
The oil dinosaurs selling rotted dinosaur, fish and plant material from eons gone by are becoming dinosaurs themselves.
And since we’re talking about Energy companies…
The ICCR and Ceres have just released Climate watch companies. These are companies that are lagging behind their industry peers in responding to Global climate change. Massey Energy and Consol Energy; Oil & Gas: Ultra Petroleum, ExxonMobil, Chevron, and Canadian Natural Resources; Automotive: General Motors; and Home building: Standard Pacific.
Shareholders do have a voice…there is a lot to do in 2009
In addition to the Climate Watch companies, investors filed resolutions with the following other businesses. The list of investors filing resolutions with each of the companies can be found here
Possibly related articles by Zemanta
- Investor groups point finger at “Climate Laggards”: Exxon, GM and Others (businessgreen.com)
- Investors Target Exxon, GM, Massey For Lack Of Climate Action (environmentalleader.com)
- Betting on big oil’s comeback (money.cnn.com)
- Angry shareholders demand change (money.cnn.com)
Credits: Tks to my dad for the dinosaur material and this book for the Supreme Soviet idea.