Spring is a time when many corporations hold their annual meetings. These meetings usually include voting on proposals submitted by management and shareholders. One privilege of owning shares of common stock is the right to vote, and MMA takes this privilege and responsibility seriously. MMA votes proxies strongly in favor of progressive social and environmental shareholder resolutions at company meetings. But how effective are these resolutions in bringing about change?

Here is an article about a study that sought to answer that question. Shareholder resolutions are non-binding, but management and directors sometimes adopt them. According to the study, implementation of shareholder proposals has nearly doubled in the recent past, from 22% in ‘97-’02 to over 40% in the ‘03-’04 proxy season. The percentage of shareholder support, size of the institution(s) sponsoring the proposal, and the reaction of peer firms to like-proposals are the biggest determinants on how the company will react.

Many recent resolutions in the realm of corporate governance - including the topics of executive compensation and separation of combined CEO and Board Chair positions - have garnered high support among shareholders and led to implementation. Social and environmental resolutions have also tasted increasing success, though less definitively. As more large institutional investors such as pension funds lend their support to more socially-oriented resolutions, these proposals will likely become more effective tool for changing corporate policy.

This entry was posted on Wednesday, April 9th, 2008 at 3:04 pm and is filed under MMA, Environment, Human Rights, Chris. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.