Wanted: Code of Shareholder Ethics
Religion & Liberty Online

Wanted: Code of Shareholder Ethics

With the mountain of books and articles that have been written about business ethics, one wonders why nothing much has been written on what we might call shareholder ethics. I’m thinking of religious shareholder activists such as As You Sow and the Interfaith Center on Corporate Responsibility. As it turns out, these groups trade on the moral status of their respective members to further agendas seldom related to matters of religious faith.

Instead, the clergy and religious in shareholder activist groups dedicate themselves to temporal causes of a distinctly left-of-center stripe, including stifling corporate political speech in the wake of the U.S. Supreme Court’s Citizens United decision. According to Acton’s Rev. Robert Sirico:

Every annual meeting season, we watch as a small group of activist groups on the left such as As You Sow and the Interfaith Center on Corporate Responsibility submit proxy resolutions that demand disclosures of corporate public policy expenditures. This is done, these groups claim, in furtherance of a more ‘just and sustainable world.’ In fact, such resolutions are designed to first bully corporations into disclosing lobbying activities and then promptly turn the tables by conducting aggressive campaigns in the press to shame them.

But the religious underpinnings for such arguments are spurious. The argument always goes that corporations have money and the poor and disadvantaged (always ‘disenfranchised’ from the political process) do not. Therefore, according to this logic, it follows that it’s unfair that corporations are allowed to make public policy expenditures to unduly influence the political process. Curiously, opponents of such spending are often themselves corporate entities (albeit nonprofit entities) that spend large sums of money to voice their own opinions.

Clearly, if a company in which the activists invest is doing something illegal and/or empirically wrong, it’s incumbent upon its shareholders to take that company to task. That’s not simply a job for full-time boardroom activists. But without evidence of serious wrongdoing it’s not only a nuisance but unethical to throw up proxy resolution roadblocks that are for the most part political platforms.

As I’ve affirmed often on this subject, a company must protect itself, its shareholders and its customers. Shareholders must protect the company and its customers but as well each other. Using one’s proxy shares to submit resolutions detrimental to other shareholders’ best interests simply because you’ve got a political or social agenda bee buzzing in your biretta simply isn’t enough to pass ethical muster. Negatively impacting investment returns for fellow shareholders hardly promotes anything “just and sustainable.”

Writing late last month for the Center for Competitive Politics, Brennan Mancil noted:

2010’s Citizens United v. FEC decision held that individuals did not lose their First Amendment rights when incorporated, thus allowing corporations (as well as unions and trade associations) to make independent expenditures, that is expenditures independent of candidates, from their general treasuries. This session, in McCutcheon v. FEC, the High Court ruled that aggregate contribution limits on individuals were unconstitutional under the First Amendment. This trend towards deregulation is promising, and should be viewed as having a positive impact on our First Amendment rights.

The value of money in politics is inestimable. Constitutional rights aside, campaign spending enables challengers to compete against entrenched incumbents, individuals to voice their political opinions, and buttresses competition in the ‘marketplace of ideas.’ Contrary to popular belief, money doesn’t buy elections. It promotes civic debate, offers a contrast, and gives candidates, especially challengers, a chance. It’s often said that money is the lifeblood of politics. If so, campaign finance regulations are bloodletting, with each new law cutting deeper into the veins of discourse.

Religious shareholder activists could learn from Rev. Sirico and Mancil rather than taking more cues from leftists and progressives. Rather than unethically rendering harm against the companies in which they invest, fellow shareholders and customers, it would be better that religious shareholder activists themselves adhere to a strict moral code. As pointedly stated by Rev. Sirico:

The political process only works when all sides are allowed to freely express themselves, a right guaranteed by our Constitution. This is an argument that must be made from secular and spiritual perspectives. Targeting the free speech of political adversaries, under a smoke screen of pious outrage, is not only unjust but immoral.

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.