Shareholder Advocacy

Actions Foundations Can Take

Shareholder advocacy takes a number of forms. Foundations can:
1. Vote their proxies to support their program goals. For example, foundations can vote for resolutions urging companies to become environmentally responsible or to end sweatshop practices.
2. Co-file shareholder resolutions initiaited by others as a demonstration of their concerns.
3. Take the lead as the primary filer of a shareholder resolution on an area of major concern to your foundation or grantees, such as tobacco, health care, human rights or the environment.
4. Engage in dialogue with corporate management through letter writing or meetings, individually or with other shareholders.

Read the Nathan Cummings Foundation's Shareholder Activity Guidelines

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How FPCR Can Help Foundations Get Involved

When you become a Foundation Partner you receive the following services and information:
1. Regular mailings to help harmonize your foundation's values and investments and increase the effectiveness of your grantmaking by voting your proxies, writing letters to companies in which you invest, co-sponsoring shareholder resolutions, and other activities.

2. Timely lists of shareholder resolutions that have been filed and the issues involved in areas such as environment, genetically modified foods, equal employment opportunity and sweatshops, among others, to help you consider your position and vote your proxies accordingly.

3. Assistance in co-filing a shareholder resolution, which is a simple matter. It only requires writing a letter indicating that the investor is co-filing a resolution filed by someone else. To do this the investor need only have a minimum of $2,000 worth of stock held for at least one year, and the intention to continue holding until the stockholder meeting.

4. Opportunities to participate in meetings and negotiations with corporate officials either prior to filing resolutions or after the filing to discuss the issues and reach satisfactory solutions.

5. Legal and technical assistance in filing a shareholder resolution or protecting it if challenged by the Securities Exchange Commission.

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Does Shareholder Activity Make a Difference?
We believe it does.

Shareholder advocacy has had a tremendous impact on corporations' social and environmental policies and practices. Over the last 30 years of filing resolutions, successes abound.

For example a number of foundations were involved in anti-apartheid work in the 1970's and 1980's. The combined pressure of concerned investors and citizens built tremendous economic and political pressure on the white supremacist government of South Africa and pushed them to the bargaining table. The result was a peaceful transition to majority rule.

Dozens of companies have agreed to adopt environmental principals and publish annual environmental reports.
Scores of companies have taken steps to diversify their Boards and/or publish diversity reports describing their policies and practices.
Apparel and shoe companies have adopted Codes of Conduct to deal with the sweatshop issue and allowed independant monitoring, Pressure still continues to pay a sustainable wage for employees.

Back in the 1930's the Phelps Stokes fund decided to refrain from owning tobacco stock.

The Ford Foundation with its enormous portfolio has been voting its proxies for over a quarter century.

The Jessie Smith Noyes Foundation worked with one of their grantees in New Mexico in the mid 1990's to successfully challenge INTEL for its unwillingness to deal with the community on a variety of environmental problems related to the company's plant in New Mexico.

Increasingly companies are listening to the voices of their investors encouraging them to be better corporate citizens. Our voice as investors can and does make a difference!

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Examples of Foundation Investment Policies

Please click on a policy to view:

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Proxy Voting Guidelines

Just as citizenship in the polity requires that a person let his/her opinions be known through voting, the same responsibility applies to shareholders. Passive holding of corporate stocks without assessment of the social and environmental, as well as financial performance of a corporation does not fulfill one's obligation as a shareholder.

The Foundation asks each of our managers, the Interfaith Center on Corporate Responsibility (ICCR) and the Council of Institutional Investors (CII) to inform us in a timely fashion of shareholder resolutions being considered at the annual meetings of corporations in which we hold stock.

The Foundation votes its proxies, exercising our corporate citizenship obligations, as follows:
The President of the Foundation, in cooperation with the Chair, the Treasurer and the Chair of the Finance Committee, reviews and votes proxies according to the following general principles:

A.When program interests are directly involved, votes proxies in a manner consistent with them.
B.When a shareholder resolution concerns a social or environmental issue that is not directly related to the Foundation's program interests, the Foundation will review each individual case and consult with our grantees, managers and others, as appropriate.
C.On issues of corporate governance the Foundation will consult with ICCR, CII, and others, and will vote our proxies according to the following general guidelines:

1.Ratify Auditors.
2.Ratify Directors unless a governance or a program interest issue has been raised or their is lack of diversity on the Board.
3.Vote against golden parachutes for executives.
4.Vote for proposals requiring a majority of independent directors.
5.Vote for proposals requiring nominating and/or compensation committees to be composed exclusively of independent directors.
6.Vote against incentive payments not related to financial performance.
7.Vote for incentive payments that are tied to social and environmental performance.
8.Vote for proposals recognizing the standing of stakeholders other than shareholders in governance and control.

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Additional Sources for Shareholder Advocacy Information

1. As You Sow Foundation
The As You Sow Foundation features introductory materials to shareholder activism and Foundation involvement in advocacy campaigns.

2. SocialFunds.com
The SocialFunds website contains a search directory that allows the user to search shareholder resolutions by category or company. The resolution spotlight, shareholder activism news, resolution status report, and success stories are also frequently updated and a Step by Step Guide to Filing a Shareholder Resolution is also available.

3. Social Investment Organization Canada
The SOI provides information and support for investors undertaking shareholder action in Canada, and their website also provides links to Canadian information sources.

4. Proxy Information.com
The Proxy Information website, created by the As You Sow Foundation, provides background information on, and arguments to support corporate responsibility resolutions via a neutral on-line venue.

5. Walden Asset Management
Walden's Social Research and Shareholder Advocacy pursues an ambitious social change agenda that spans all of their domestic and international portfolios. Their research and advocacy work seeks to use the power of ownership to positively influence corporate behavior. They share their clients' commitment to fostering progressive social change, and regularly take the lead in dialogue with companies, shareholder resolutions, public testimony, and technical assistance to non-profit organizations.

6. FPCR Links page: Shareholder Advocacy

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