Notes from the Boeing AGM

By Bro. Robert Wotypka, OFM, Cap.

The Province of Saint Joseph of the Capuchin Order, whose Corporate Responsibility agent I am, filed a shareholder resolution in November 2018 asking that Boeing disclose all its political and lobbying spending, as well as its membership in industry and trade associations. We picked up the mantle in the sixth year of this ask, noting that there was a slight but steady upward tick in support of the resolution, reaching 24% in the 2018 annual general shareholders’ meeting. I registered for the event, held 29 April at the Field Museum in Chicago, Boeing’s corporate HQ.

I took the train from Kenosha. I met my company minder, from their capital arm, and had some snacks, connecting with Sisters Barbara Jennings and Marge Clark before taking my seat in an auditorium that likely has seen more class trips than Timothy Leary in his professorial days.

Here are the highlights (as I see it) from my two-minute statement, with thanks to John Keenan of AFSCME for his expert research and prep:

Mark Hanna, a turn-of-the-20th century Senator from Ohio, said,There are two things that are important in politics. The first is money and I can’t remember what the second one is.” We move this resolution not because we are naïve but because we are not. And because we know that companies with a high reputational rank perform better financially than lower-ranked companies. Our company is in a legal and reputational crisis which underscores the need to embrace accountability and to be fully transparent with shareholders, including through disclosure of its lobbying activity. Fellow shareholders, this is not the time to support this resolution; members of the board, this is not the time to implement this resolution. This is past the time to vote in support of and to implement this resolution. We urge shareholders to vote FOR this proposal. Thank you.

I was too nervous to look at the clock, but I prepped and I am pretty sure I made it within the two-minute mark. The resolution received 32.6% of the vote. My sisters in the movement offered congratulations and helped me frame the result – that this means the resolution could be re-introduced next year. Our own Frank Sherman (ED of Seventh Generation), in a post-AGM briefing, explained what I knew only in theory but was now feeling in my bones: that mutual fund managers, who hold immense numbers of shares and thereby voting rights, rarely, almost never, vote against the recommendations of management. And Boeing management urged a NO not against our resolution, against the resolution separating the CEO from the Chairman of the Board of Directors, and against an ask to separate out the impact of share buy-backs from the movement of the stock price, which feeds into and distorts compensation plans. None tracked much more or less than the St. Joseph resolution. But my fellow activists said we ought to celebrate that 8% jump, and so I do, with you. The CEO struck me as well-scripted and immovable – qualities contrary to Gospel movements. There was a serious and challenging question about the processes and values that informed the rollout of the 737 MAX series. And again – a highly scripted and immovable response. There is more to come, to be sure.

One more free muffin, then back to the street where the recently liberated ice cap was still pouring down. I met some protesters on the sidewalk and we talked and commiserated, then a kind soul from the north side dropped me at Union Station, and back to Milwaukee. What do I carry with me? As follows: an AGM is much like a summit, or a pre-Pope Francis synod: the heavy lifting and the grunt work comes before the switching on of the mics and the lights and the summoning of the slides. And thanks to the work of ICCR, Seventh Generation, our co-filers and collaborators, there was much lifting and there was much grunting and the prep work, including filing an exempt solicitation, bore fruit. I stood on the shoulders of gentle giants.

Member Webinar: Shareholder Resolution Process

Today, we hosted our latest webinar for member education on the “Shareholder Resolution Process.” ICCR’s Guide to Filing Shareholder Resolutions is a great tool. We are grateful that Tim Smith of Walden Asset Management and Pat Miguel Tomaino of Zevin Asset Management were able to join us. Their input was a great contribution. Without further ado, here is the video:

 

SGI members score progress with utilities on climate change

This year, SGI members filed resolutions with two midwestern utilities: CMS Energy and WEC Energy Group. Each resolution aimed for the public disclosure of an assessment of the long-term business impacts of limiting global warming to under 2-degrees Celsius, as adopted by the Paris Climate Agreement.

We have great news: both resolutions have been withdrawn as the companies agreed to the main components of the resolutions. Despite the Trump administration’s decision to end the Clean Power Plan, both midwestern utilities rise to meet the challenges of climate change. In fact, CMS announced last week that they reduce carbon emissions by 80 percent and no longer using coal to generate electricity by 2040.

Sr. Ruth Geraets, PBVM of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, SD who led the filing of the resolution at CMS Energy said, “My congregation is concerned about climate change and the critical need to reduce greenhouse emissions because our mission calls us to care for creation. As longterm shareholders in CMS, we believe having a strategy in place to meet climate challenges head-on will improve CMS’ competitive position over the long term. We were pleased to see CMS step up to this challenge with its recently announced clean energy breakthrough goals.”

With respect to the dialogue with WEC Energy Group, on behalf of the School Sisters of Notre Dame, Central Pacific Province, Tim Dewane said, “Pope Francis has said, ‘Reducing greenhouse gases requires honesty, courage and responsibility.’ We thank WEC Energy Group for its efforts in this regard so far. We believe they are not only good for the planet, but they are also in the bottom-line best interests of the company, its customers and shareholders.”

“These two utility companies are climate leaders in the Midwest,” said Frank Sherman, Executive Director of SGI. “They recognize that market forces and their customer base are pushing them to exceed federal climate regulations and state renewable portfolio standards. Although they are big companies, utilities have a very local focus and are highly dependent on the social license granted by the communities where they operate.”

Our partners at ICCR shared a press release about this win which can be found here.

FSPA takes CSR to court

When we saw a recent article (Wisconsin groups to get $12M settlement for natural gas price fixing) from the La Crosse Tribune quoting Sr. Sue Ernster, FSPA, we wanted to bring it to the attention of our SGI members.  Sr. Sue adds:

FSPA participated in the lawsuit of the manipulation of natural gas pricing by multiple utilities as another way of how we live out our social justice activities and our values.  We see this as an effort to help those whose voices are not represented in this and other situations.  We are utilizing the resources we have at our disposal to hold those accountable who were responsible for this price manipulation.

Our hope is that participating in litigation settlements such as these, as well as filing shareholder resolutions with companies, demonstrates that people are paying attention, asking questions and holding them accountable for their actions.

Book recommendation: The Shareholder Action Guide

In a new series of posts, SGI will offer reviews and suggestions of books related to our work in shareholder advocacy.

For those who want an inspirational primer about shareholder advocacy, Andrew Behar’s The Shareholder Action Guide: Unleash Your Hidden Powers to Hold Corporations Accountable fits the bill. Replete with anecdotes and advice, coupled with references to on-line resources, this book explains the tools and strategies available to empower shareholders. Further, this handbook may well inspire new activist shareholders to demand corporate accountability.

Andrew Behar

The author leads As You Sow, a nonprofit organization that focuses on environmental and social corporate responsibility. As You Sow focuses on climate change, sustainability, human rights, and environmental health, and it engages, among others, companies like ExxonMobil, Chevron, Southern, FirstEnergy, Duke, Dow, DuPont, Monsanto, HP, Dell, Apple, Proctor & Gamble, and Coca-Cola.

In 15 brief chapters, Behar takes readers through the basics. The first seven chapters include: shareholder responsibilities, how shareholders began to use their power with General Motors in South Africa, defining some limits on shareholder actions, explaining proxy votes, influencing fund managers, and corporate engagements and filing shareholder resolutions. Chapter 8 of The Shareholder Action Guide also tells the story of many campaigns in shareholder advocacy from across the past forty years. It profiles leaders in shareholder advocacy, including a testament to the work of SGI’s founder, the late Fr. Mike Crosby, for his efforts in tobacco. Those involved with SGI will recognize the names of numerous allies referenced in the book, including Tim Smith and Sr. Nora Nash, O.S.F. Subsequent chapters contemporary strategies in shareholder advocacy .

Behar explores how corporations are the most powerful entities on the planet. Sadly, many have had a long record of failing to care for creation, exploiting vulnerable people, and hiding boardroom decision-making. Since, by law, corporations are beholden to their shareholders, some philanthropic trusts, pension funds, and other institutional investors have used shareholder advocacy to press for changes in corporate policy. Behar also underscores the opportunity to engage individual investors, who have largely been silent, mistakenly thinking themselves powerless. The Shareholder Action Guide is designed to inform, inspire, and instruct investors in how to exercise their power to effect meaningful change on critical issues including environmental justice, food sustainability, executive compensation, and worker’s rights. Owners of as little as $2,000 worth of stock in a publicly traded corporation have the power to be heard. This book is a call to action designed to build a movement of active investors. Behar illustrates how investors can stop abdicating their power and act to make a better world.