Summary of Walden’s 2007 Shareholder Resolutions

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From the Summer, 2007 issue of Values

Sponsoring shareholder resolutions is one of several options available to investors seeking a voice in company practices. Much of Walden’s success in advocating for greater corporate social responsibility comes from constructive dialogues with companies over many years, entirely outside the resolution process. Nonetheless, shareholder resolutions can be an important tool for change, as illustrated in this summary of our 2007 shareholder resolutions.
 
HUMAN RIGHTS
Vendor Standards
Resolutions at Applied Materials, Hershey’s, and Wrigley’s requested that the companies adopt vendor codes of conduct, establish an independent monitoring process, and report publicly on progress. Walden withdrew the resolution at Wrigley’s based on its commitment to establish a code and an audit process. The resolution at Hershey’s was withdrawn as it committed to establish a supplier code of conduct, develop a monitoring and implementation plan, and continuously improve its program over time. Applied Materials agreed to expand its auditing and published reporting.
 
EQUALITY
Inclusive Non-Discrimination Policies
Walden filed a number of resolutions requesting that companies modify their non-discrimination policies to explicitly include sexual orientation. Resolutions were withdrawn when: Clarcor confirmed that its policies were inclusive and added explicit language on its website; CenturyTel internally formalized its inclusive policy, posted its policy publicly and shared information on internal diversity training programs; and Precision Castparts* modified its policy to include sexual orientation, posted its policy online, and communicated the changed policy to its subsidiaries. 43% of shareholders demonstrated their support of the proposal at Commercial Metals, 26% at Leggett & Platt and 43% did so at Expeditors International*.  
 
Equal Employment Opportunity (EEO) Disclosure and Board Diversity
A resolution at Lehman Brothers requesting public disclosure of equal employment opportunity statistics was withdrawn when it shared its diversity programs and provided comprehensive workforce composition statistics. This resolution was supported by 26% of shareholders at Home Depot. A resolution requesting increased board diversity at Linear Technology* has not yet gone to vote.
 
ENVIRONMENTAL IMPACT
Climate Change
Walden filed a resolution asking industry outlier ExxonMobil* to adopt quantitative goals, based on current technologies, for reducing total greenhouse gas emissions from the company’s products and operations and to report to shareholders on plans to achieve these goals. 31% of shareholders supported this resolution.
 
Recycling
Resolutions were withdrawn at Coca-Cola and PepsiCo requesting reports on beverage container recycling programs and goals. PepsiCo agreed to encourage publication of an industry document on recycling and to continue working to establish industry-wide container recycling goals. If PepsiCo is not able to mobilize industry support, it will supplement its own sustainability report to stakeholders. Coca Cola agreed to boost recycling and to increase disclosure of its recycling activities, including source reduction, use of recycled content, and container recovery. 
 
CORPORATE GOVERNANCE
Political Contributions
Walden withdrew a resolution at 3M when it committed to enhance its transparency on policies and practices related to political contributions. Both BellSouth* and Caremark were acquired, making similar resolutions at these companies moot. A resolution requesting increased reporting from FedEx has not yet come to vote.
 
Executive Compensation
Walden filed resolutions requesting that shareholders be able to cast an advisory vote to ratify the compensation of executive officers. Walden withdrew the resolution after Pfizer agreed that the suggested reform had merit and to study the details of its implementation. Pfizer agreed to help convene a working group with companies, investors, and experts to consider methods to implement an advisory vote system in the U.S. The resolution at Procter & Gamble was withdrawn with its commitment to participate in the working group and to study how to improve communications with investors on executive compensation. 35% of shareholders supported this resolution at Wells Fargo.
 
SUSTAINABILITY REPORTING
Resolutions were filed at Comerica, Dover and Medtronic requesting that the companies prepare sustainability reports, detailing their social and environmental impacts policies, and programs. Shareholders supported the resolution’s request with 39% votes at Comerica and 35% at Dover. Walden withdrew the resolution at Medtronic, given the company’s commitment to develop a sustainability report, work constructively with shareholders, and continuously improve its reporting. 
 
*In filing shareholder resolution Walden often collaborates with other concerned investors to strengthen our influence on managements. Of the 25 resolutions described above, 5 were not led or co-led by Walden. In order of appearance, these resolutions were led by: Pride Foundation, Trillium Asset Management, Calvert, Sisters of St. Dominic of Caldwell, NJ, and Domini Social Investments.
 

The information provided in the above article is for historical purposes only.  Such information may no longer be current and therefore should not be relied upon.
The information contained herein has been prepared from sources and data we believe to be reliable, but we make no guarantee as to its adequacy, accuracy, timeliness or completeness. We cannot and do not guarantee the suitability or profitability of any particular investment. No information herein is intended as an offer or solicitation of an offer to sell or buy, or as a sponsorship of any company, security, or fund. Neither Walden nor any of its contributors make any representations about the suitability of the information contained herein. Opinions expressed herein are subject to change without notice. The writings of authors do not necessarily represent the views of Walden Asset Management, its parent, or affiliated entities.

© 2007 Walden Asset Management
A Division of Boston Trust & Investment Management Company