A response to ‘Four strategies for effective engagement’: Why the nature of investor-corporate discussion is key for successful outcomes

Andrew Behar responds to a recent article in RI from Robert Eccles, Stephanie Mooij and Judith Stroehle

The June 14, 2021 Responsible Investor article Four strategies for effective engagement: Why the nature of investor-corporate discussion is key for successful outcomes by Robert Eccles, Stephanie Mooij and Judith Stroehle purports to describe the nature of shareholder-corporate engagement. However, it observes only half of the ecosystem and therefore misses critical dynamics, tensions, players and strategic possibilities. This clarification is intended to fill in the other half so that the two sides may work together in a more strategic, synergistic, and comprehensive way for positive change.

The article is based on “70 in-depth interviews with asset owners, asset managers, and listed companies in developed markets globally”. This is like looking at the planet from above the North Pole and not acknowledging that the Southern hemisphere exists. What the companies and large money managers did not mention is the entire ‘shareholder advocacy’ community of professionals. This includes faith-based, impact, and socially responsible investors, as well as non-profit shareholder advocates like As You Sow, the organisation of which I am CEO.

For 50 years, this community of advocates has been helping companies shift their policies and practices to avoid material risk through practical solutions. This is a goal shared by the entire ecosystem; however, up until this year, it was rarely supported at the Annual General Meeting (AGM) ballot box.

We see corporate executives and asset managers working together to maintain the status quo, holding on to their privilege and control

By only describing the interaction of corporations and large asset managers, the image that emerges is a circle of conversations going around and around, mired in the mud of the status quo. This depiction is accurate and quite frankly, it’s the problem. Vanguard, BlackRock, Hermes and others have hundreds – if not thousands – of professionals who engage their corporate counterparts in dialogue. They report to their clients and check the engagement box. But when the question ‘What was accomplished?’ is asked, generally, the answer is: ‘We can’t tell you, it’s confidential’. Perhaps change happens at this nexus; difficult to tell.

Corporations and large asset managers have business models that are deeply intertwined. They sit on each other’s boards, have commercial relationships, fund aligned lobbying campaigns, vote for management at about the same rate, and have very similar worldviews. It’s no wonder these dialogues can go on for decades with only incremental shifts.

The Other Side 

The good news is that the other hemisphere is hard at work on strategic systemic change. Looking down from above the South Pole, let’s observe how different the perspective is. Admittedly, I did not conduct in-depth interviews with 70 leading shareholder advocates. However, I work with them every day and trust that my analysis is close to the mark. We are the issue experts doing deep research, conducting dialogues, writing resolutions and proxy memos, defending no-actions, and speaking at AGMs. Our mission is systemic transformation over the long term. We see corporate executives and asset managers working together to maintain the status quo, holding on to their privilege and control.

A Different Model

Our model is not a circle. It does not have four strategies. It is one arrow of intention (see Figure 1) in support of the emerging regenerative economy based on justice and sustainability. The single strategy is to identify material risks and solutions for the companies we own, and escalate them until they are addressed. We are tireless, dogged and tenacious.Figure 1: Shareholder advocates mission is to identify material corporate risk and engage/escalate to offer solutions that will benefit all stakeholders  A review of the past 50 years, starting with faith-based anti-apartheid advocates at the General Motors AGM through the 2021 Exxon AGM, the accomplishments of this small band of shareholders, while incredible by any measure, would have been faster and deeper with the support of the major asset managers at the AGM ballot box. Moreover, asset managers would be better served to trust the expertise of the advocacy community and default to vote with us. We do not engage and escalate lightly. Each action is well considered and done with great intention.

We do not have all the data yet, but 2021 looks to be the dawning of a new era in which shareholders stand shoulder-to-shoulder on voting to empower change on climate, racial justice and other critical systemic issues. I am hopeful that this new spirit of unity will lead to corporate transformation. After all, the boards of all these companies report to their shareholders. If they refuse to set a reasonable strategy and properly incentivise management, as we saw with Exxon, shareholders will unite and vote for replacements.

Keeping with the galactic theme, there is an unprecedented opportunity for a third model that may be described as ‘meteors’. There exists a handful of individuals, who hold unprecedented power and could take unilateral action for near-instant transformation. A few examples:

If BlackRock CEO Larry Fink, who, in his 2021 CEO letter stated that every company needs a Paris-compliant Net Zero plan, would add “or BlackRock will vote against your board”, it would result in rapid progress on the climate crisis. Fink made a statement referring to Sustainability Accounting Standards Board compliance two years ago, and now 70% of the S&P100 have made their EEO-1 reports public – a move he could easily do again.

If Jamie Dimon, CEO of JP Morgan, committed to halting all funding of extraction, deforestation, and pipeline projects (especially those desecrating sacred Indigenous land), it would reduce the ability of these projects to find funding.

If Mark Zuckerberg demanded that Facebook eradicate child pornography and hate speech, it may save his legacy. Otherwise, he is forever the guy who sold-out democracy and humanity.

All three of these actions would burnish their company brands, increase revenue, and probably get the three of them on the cover of TIME Magazine as global heroes. So why not do it?


The ‘Four Strategies’ circular model describes the very problem we need to solve – that half the votes are spinning in an endless discussion. Shareholder advocates have the solution: Use your power to unite as shareholders for the benefit of our companies, the planet and society. It took 50 years for everyone to agree on a new corporate purpose. The implementation can be done in a few years. That’s more than enough time for every company to commit to a Net-Zero-by-2050 plan and reduce their emissions by 50% before 2030. This is the dawning of a new age. By uniting the two hemispheres, we can put the planet back together and create a just, safe and sustainable world for all.

Andrew Behar is the CEO of US-based shareholder advocacy group As You Sow