How Investors Push Sustainability

February 18th, 2012 by Rick Drain

Corporate managers act as if they’ve forgotten sometimes, but shareholders are the owners of companies. As owners, they directly select the the Boards of Directors who hire and oversee management. Shareholders may want to give management orders about corporate behavior. In practice, shareholders are a diffuse power, with indirect control, and management usually follows their own agenda.

Shareholder resolutions provide a way for a group of shareholders (owners) to put a directive to a vote by all the shareholders.
Among other uses, this is one of the ways that Socially Responsible Investors push management to make the companies behave more responsibly.

Ceres leads a national coalition of investors, environmental organizations and other public interest groups working with companies to address sustainability challenges. Part of their effort is to organize shareholder resolutions. Some pass, some don’t, but they all send a message to management about shareholders’ desires.

Graph of Ceres shareholder resolutions by year

 

Click here to read the article:
Ceres Shines a Light on the Power of Shareholder Proxy Votes