Only about a third of U.S. investors support any of the five potential approaches outlined by the Securities & Exchange Commission to curb the rights of shareholders to file resolutions and participate in the process of selecting members of corporate boards, according to a major new Opinion Research Corporation survey conducted for nine leading investment companies and religious institutional organizations.
Fewer than four in 10 American investors (39 percent) support any SEC proposal that would “limit the ability of investors to file...shareholder resolutions” on such topics as “CEO compensation, climate change, governance problems, pollution and racial or gender discrimination.” And less than a third of American investors (31 percent) would support the SEC “limiting the ability of investors to refile shareholder resolutions for additional votes in second and third years” on a range of social and traditional corporate governance topics.
Only about one in 10 American investors (13 percent) supports a potential SEC proposal barring shareholders from a meaningful role in helping to select corporate board members. A similar number of investors back a potential SEC proposal to shift from shareholder resolutions to electronic “chat rooms” as the primary means for investors to express concerns about companies.
According to Lisa Woll, CEO of the Social Investment Forum, “This is a resounding ‘thumbs down’ from U.S. investors to the possible approaches outlined by the SEC that would undercut shareholder advocacy and limit the involvement of investors in corporate boards. A clear majority of American investors understand that shareholder advocacy is vital to promoting wider corporate social responsibility, which, in turn, strengthens the bottom lines of companies and results in more long-term wealth for shareholders.
“Most U.S. investors agree that the SEC should be further opening up corporate boardrooms, rather than shielding them from the scrutiny and feedback that is being offered by the American investors who are stakeholders in these publicly owned companies.”
• Support for limits on shareholder resolutions is weakest among the highest household income category for investors: $75,000 and above (37 percent). Among all U.S. investors who had a view about this question, nearly six out of 10 (57 percent) opposed limits on shareholder resolutions.
• More than four out of five investors (82 percent) said that they would prefer to see the preservation of the current process of publicly voting on shareholder resolutions over a “chat room only” approach.
• More than four out of five American investors (84 percent) agree that “investors who own shares in America’s companies should be able to help nominate corporate board members.” Half of investors said that they “strongly agree” with this role for investors.
John Wilson, board member, Interfaith Center on Corporate Responsibility, and director of socially responsible investing, Christian Brothers Investment Services, said: “We find it deeply troubling that the Commission may be considering weakening this important right, particularly in light of the chairman’s expressed objective of improving the dialogue between shareholders and management. If these test concepts are developed into proposed rules, the result could be a significant defeat for shareholder rights and corporate governance.”
The survey of U.S. investors was made possible by nine organizations: Calvert Group, Pax World Management Corp., Trillium Asset Management Corporation, the Social Investment Forum, the Interfaith Center on Corporate Responsibility, Boston Common Asset Management, First Affirmative Financial Network, Marianists Province of the United States, and Green Century Capital Management.