Anti- ‘Social Justice’ Shareholder Resolutions
Religion & Liberty Online

Anti- ‘Social Justice’ Shareholder Resolutions

There has been ample evidence presented in the past several years to suggest shareholder activism exhibited via proxy resolutions not only wastes time but, as well, corporate funds. And yet, unions and “social justice” advocates such as the Interfaith Center on Corporate Responsibility and As You Sow perpetuate the practice to the detriment of targeted companies.

And, according to a recently released study, this activism also works to the shareholders’ detriment as well. In effect, these proxy resolutions shoot the shareholder perpetrators in their own collective foot by reducing the profitability of the companies in which they hold stock – while simultaneously wounding other shareholders who don’t necessarily share the whole leftist/liberal magilla against hydraulic fracturing, free political speech and genetically modified organisms while advocating for network neutrality.

“Analysis of the Wealth Effects of Shareholder Proposals – Volume III” was released by the U.S. Chamber of Commerce’s Workforce Freedom Initiative on May 2. The study was conducted by Navigant Consulting’s Allan T. Ingraham, Ph.D., and Anna Koyfman, whose analysis of proxy resolutions by shareholder activists concludes:

[T]here is no conclusive evidence of measurable improvements in (short-term or long-term) stock market or (long-term) operating performance in target companies as a result of shareholder proposals. Therefore, we find no evidence that shareholder activism has a positive impact either on firms or on the entities offering shareholder resolutions.

The authors continue:

To test these findings, we conducted our own empirical analysis on a sample of 97 firm-years, using techniques that are well supported in the literature. Our findings accord with prior analysis in this area of research. We find no significant evidence that companies’ market value improves either in the short term or the long term as a result of shareholder proposal process. Therefore, similar to Dos Santos and Song (2009), our analysis finds no evidence that shareholder proposals produce positive economic benefits to sponsors or supporters of shareholder resolutions. Given that costs are likely to be associated with these proposals, it is reasonable to suggest that, on the whole, the shareholder proposals examined in this study may, in fact, result in a negative return for those pursuing them Should there be no reasonable expectation of a financial benefit from shareholder activism, plan fiduciaries may need to reconsider the extent to which they engage in this practice.

And this:

We therefore find no conclusive or pervasive evidence that the shareholder proposals assessed in this study improve firm value or result in an economic benefit to pension plans and plan participants. Given that the proxy process imposes costs on both firms and shareholders, and given that there are no proven benefits in terms of corporate performance, the overall net benefit of these initiatives is likely negative.

So remind me once again: What have these proxy resolutions anything to do with “social justice,” ethics or even the remotest sense of “fairness” by everyday playground standards when a ranting, leftist-driven minority’s agenda jeopardizes corporate profitability and returns for the majority of shareholders?

Let’s pray the clergy and religious represented by ICCR and As You Sow conduct some serious soul-searching before continuing to engage in activities that ultimately harm the corporate creation of wealth, jobs and philanthropy. The creation thereof truly benefits the World’s most disadvantaged far better than ideologies half-baked into frivolously nuisance proxy resolutions.




Bruce Edward Walker

has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. He was managing editor of The Heartland Institute's InfoTech & Telecom News from 2010-2012. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2011 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past five years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Flint, Mich., with his wife Katherine.