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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 3 of 3
There's also a shareholder battle over the safety of cosmetics?
Compere: We're sort of at the tipping point when it comes to the issue of chemical safety. There's been legislation in California on safe cosmetics that came into effect in January. There's also the European Union REACH legislation, which affects companies that sell products in Europe [by requiring safety checks on commonly used chemicals]. Essentially, this whole industry, the cosmetic industry and the chemical industry in general, has been highly unregulated.... Shareholders are saying that this is a risk-management issue.
And you targeted CVS?
Compere: Last year, we filed a resolution with CVS on cosmetic safety. We refiled the resolution again this year after we got an 8 percent vote in favor, which is fairly good for a socially oriented resolution. They didn't want this resolution on the ballot. We just withdrew the resolution at CVS in negotiation to have a substantive dialogue on this issue. They're going to be looking at adopting a policy on reporting out to shareholders on their actions.
Critics say these initiatives are turning companies into social organizations. Have you seen a push back against these efforts?
Smith: The fascinating thing is: I see very little push back from the business community now on being a good corporate citizen. You remember that Milton Friedman said the job of a company is to make profits for its shareholders and that was its primary purpose. You hear very few executives say that that is the only responsibility that they have now. They would talk about, as we might, a double bottom line – making returns for shareholders but also working as a responsible entity in society.
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