Sisters on the Warpath
from
September/October 2003
by Alison Rogers
If you meet Susan Vickers, or Marcie Solms, or Stella Storch, you should keep two things in mind: Call each of them “sister,” since they’re all women who have taken religious vows. And take them very seriously. As shareholder-activists who represent billions in investor clout, they don’t make meekness part of their delivery system.
For example, a resolution co-filed by Storch—a member of the Dominican order who’s the justice coordinator of the Congregation of Sisters of St. Agnes—pushed for the adoption of a global human-rights policy by Exxon Mobil, in which the order had an investment of some $370,000. The proposal got 8% of the vote at the company’s annual meeting in May. The petroleum giant also faced a resolution filed by Solms’ organization, the Milwaukee province of the School Sisters of Notre Dame (a $1.1 million stake in Exxon Mobil), calling for a report on the effects that HIV/AIDS, tuberculosis, and malaria have had on the company’s operations in sub-Saharan Africa, and an account of any actions Exxon Mobil is taking to address the problem. About 8% of shareholders backed this demand as well.
Vickers, the director of advocacy at Catholic Healthcare West (total portfolio: $1.75 billion), which has 42 acute-care facilities in California, Arizona, and Nevada, did even better with General Electric shareholders. About 22% of them supported a resolution that called on the company to look for the business risks and opportunities associated with global climate change and to take positive steps to reduce the emissions of its own manufacturing plants. GE’s board went along with the vote. As the company website announced, “Resolved: that the Board of Directors report (at reasonable cost and omitting proprietary information) to shareholders on the greenhouse gas emissions from our company’s own operations and products sold, including: steps the company can take to reduce emissions of greenhouse gases substantially; recommendations for steps the appliance manufacturing industry can take to collectively reduce emissions of greenhouse gases substantially, and plans, if any, to support energy-efficient appliance standards.”
From the boardroom viewpoint, it may seem tempting to ignore votes that get minimal shareholder support. This could be a big mistake. Since a first-year resolution needs to garner support of only 3% to be eligible for refiling a second year, even puny votes are best viewed as wake-up calls. “Corporations say, ‘We watch you because the issues that you address will be ours in seven years,’” says Sister Patricia Wolf, executive director of the Interfaith Center on Corporate Responsibility, which serves as an umbrella for many faith-based institutional shareholders with some $90 billion in investments. “At one time the faith community was considered to be immature and naïve. Now I think we’re taken seriously by the corporations.” Some new clout comes from increased skill in doing battle. “In the past we tended to write one generic resolution and submit it,” Wolf says. “Now most of the resolutions are company-specific,” like the global-warming demand at GE.
The season for filing resolutions that will appear in next year’s proxies is fast approaching. What should you do if you’re approached by an activist who seems armed with both spiritual and material might? Herewith, a little sisterly advice:
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Respond to the first request for information. This can help you head off a resolution at the pass. “Our members brought the AIDS pandemic in sub-Saharan Africa to our attention,” says Wolf. “They wrote to 30 corporations, and half that group responded. As far as the half that didn’t respond, we decided to file.”
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If you are hit with a resolution, don’t freak out. “Some corporations get really uncomfortable, because they’ve never had a resolution against them and they think it attacks their credibility. They get really upset,” says Sister Annette Sinagra, corporate-responsibility analyst for the portfolio advisory board of the Adrian Dominican Sisters. “Some smaller, non-Fortune 500 companies get very defensive.”
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Offer to meet the sisters in person. “We filed with Johnson & Johnson,” says Storch, who explains that she and others were concerned that the company’s marketing expenses, among other things, might be pushing up the cost of medicines. “We met with them face-to-face, and their openness to our ideas was so great that we withdrew the resolution.”
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Use the annual meeting to show that your company is doing something about issues that have been the subjects of previous resolutions. Almost as many GE shareholders supported a push to ease global warming last year, too. At this year’s meeting, CEO Jeffrey Immelt was able to show that GE not only had heard what the protesters were saying but was taking action. He said that the company had decided to make a greenhouse-gas inventory of more than 600 of its manufacturing facilities and business centers worldwide. Says Vickers: “I personally was impressed with the CEO’s manner of listening attentively and responding respectfully to a range of questions and comments that he got.” Does that mean there won’t be a year three for the global-warming resolution? “It’s a little early to judge,” she says. “But if they follow through on what they’ve committed to do, if the dialogue continues on the path it’s currently on, it would not be necessary to refile.”
From the company’s point of view, that sounds like a consummation devoutly to be wished.
