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Shareholders are urging some of the nation’s leading companies to either support or step away from a Washington-based lobbying group’s campaign to curtail their advocacy at annual meetings.
Investors including Walden Asset Management have reached out to close to 50 members of the Business Roundtable, an association for chief executive officers. Companies are being asked if they endorse an effort started by the Roundtable and picked up by Republican-backed legislation to deregulate Wall Street that would block all but the biggest shareholders from putting proposals up for a vote of their peers.
“While the BRT states that this is a ‘member priority,’ this is not the message we have been hearing from your members,” Timothy Smith, who leads Walden’s shareholder engagement, wrote in a July 6 letter with his counterparts at Pax World Management and Domini Impact Investments.
Of the companies that have responded so far, a number have come out and said the rules governing the decades-old shareholder advocacy tool should be updated but none have championed the Roundtable’s suggested approach, Smith told Bloomberg BNA.
The letter was addressed to the Roundtable’s president and CEO Joshua Bolton. The group, which didn’t immediately return a request for comment, has said the proposal process is driven by “special interests” and in need of regulatory reform.
The letter pointed to proposals on boardroom diversity, which have been growing in number and support, and climate change, some of which passed with unprecedented votes this proxy season, as examples of why they “cannot and should not be dismissed.”
The House passed in June the bill (H.R. 10) that would severely limit proposals, but it faces long odds in the Senate in its current form. Even without congressional action, a more business-friendly Securities and Exchange Commission could reform the proposal process on its own.
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The investors' letter to the Business Roundtable is available at http://src.bna.com/qyn
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