Lost in many responses to the Business Roundtable statement Aug. 19 that companies have a "fundamental commitment" to all their stakeholders is a simple fact: Structurally speaking, there are two primary regions of power in a company: shareholders and managers. And both of them need to focus more attention on the social and environmental impact of corporate policies, practices and performance. Both shareholders and managers should focus more on the social and environmental impact of corporate policies, practices and performance.
Now that corporate CEOs are lending their voices to these shared concerns, it is not the time to vilify investors for utilizing their shareholder rights and put all our faith in managers to take up the mantle. Instead, we must consolidate this opportunity by harnessing the insights of sustainable and responsible investors with CEOs' ability to implement and execute on those ideas.
An excellent first step would be for the Business Roundtable to withdraw its request to the Securities and Exchange Commission to change the shareholder resolution process and instead welcome shareholders to continue to put shareholder proposals on issues like climate change and economic inequality in corporate proxy materials.
Lisa Woll is CEO of US SIF: The Forum for Sustainable and Responsible Investment. Jonas Kron is senior vice president of Trillium Asset Management.
This article appears in full in Pensions & Investments