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Do you know the political slant of your portfolio?
Increasingly, shareholders want to know the political contributions their companies are making.
from the April 16, 2007 edition
Page 2 of 3
And you've met with some success?
Compere: We filed one of those resolutions on executive pay at Aflac, which is an insurance company – you know, the famous quack. We filed that resolution because there were some corporate-governance concerns we had: The executive pay of Mr. [Dan] Amos, the CEO, was higher than the average or median pay of the insurance industry. There are also some issues around the board structure itself. And there's a majority of insiders on the board. So we thought that this was a good candidate for this type of resolution. We've been very pleased with Aflac's announcement that they will allow an advisory vote in 2009. They are the first company to allow that.
Smith: It's a big breakthrough.
But the vote isn't binding. It's a poll of the shareholders.
Compere: Exactly.
Shareholders are also scrutinizing corporations' political contributions.
Smith: A number of investors – these are not just socially concerned investors, it's also some trade unions, some state and city pension funds, religious investors – have joined together to ask companies to be transparent about their political spending. This would be political spending that they would make directly, for example, in a state or a city campaign or initiative. But what's also very interesting to track is trade associations and how trade associations, like the US Chamber of Commerce, may be doing the work of their members by doing political spending, lobbying, and activism. So we're asking companies really to track and be public with information about where those monies go as well. We now have about 30 companies that have agreed to do this kind of disclosure.
What other trends are you seeing?
Smith: The [spectrum] goes all the way from resolutions on political contributions to resolutions on climate change. We have close to 40 resolutions that are challenging companies in this day and age to look at their greenhouse-gas emissions, to put limits on them, to be transparent about what those emissions are and what they're doing to try to remedy it. This is an issue that has just exploded in interest. We have investors with $40 trillion [in assets] internationally who have supported a questionnaire to companies, asking them to report on what they're doing on climate change. It's an issue that affects the bottom line of companies. And investors want to know what companies are doing to address it.
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