Josh Zinner: Business Roundtable Must Defend Shareholder Access to Proxy

We write today for two reasons. The first is to commend the Business Roundtable (BRT) and the 181 CEOs who endorsed the new Statement on the Purpose of the Corporation(the “Statement”), embracing the importance of companies’ commitment to key stakeholders. The statement acknowledges a central tenet of ICCR’s core philosophy: that companies focused on the well-being of all their key stakeholders and not just on boosting short-term shareholder returns will be more successful over the long term. A growing community of ESG investors have been supportive of companies demonstrating leadership in corporate responsibility for years, with the firm belief that these companies are building long-term value for shareholders.We expect the BRT CEO statement will stimulate an important dialogue within companies,investors and the broader public.

However,the principles clearly articulated in the Statement makes the BRT’s continuing lobbying and public statements against shareholder resolutions dealing with environmental, social and governance issues even more perplexing. We urge the BRT to reassess its campaign against shareholder resolutions in light of the new statement.

We read with interest the June 3,2019 BRT letter to the Securities & Exchange Commission (SEC Letter)and take issue with several of the assumptions used to support the BRT’s argument. The BRT’s characterization of the issues raised in the proxy process, as well as the motivations of shareholder proponents, is a simplistic description that is false and misleading.

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Lisa Woll & Jonas Kron: Responding to BRT "Statement": Stronger partnership needed between shareholders, managers

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.

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