Two of the world’s biggest investors, Blackrock and Norges Bank Investment Management (NBIM), have voted against the directors of one of the globe’s largest manufacturers of Personal Protective Equipment after more than a quarter of its workforce reportedly contracted Covid-19.
At today’s annual meeting for Top Glove, the pair voted against all directors up for reelection. Californian public pension fund CalSTRS voted against the six directors, but – unlike Blackrock and NBIM – supported the retention of Independent Director Lim Han Boon.
Top Glove is the world's largest manufacturer of rubber gloves, a commodity currently in huge demand, but its treatment of workers has long been a cause of concern. The company was added to the UN Global Compact watchlist in 2018 amid allegations of forced labour and excessive working hours.
In November, it was reported that worker dormitories at the company had become the site of Malaysia’s largest Covid-19 outbreak. Blackrock reports in its voting bulletin that more than 5,000 of Top Glove workers (25% of the workforce) have been infected, with one reported fatality. The outbreak resulted in the 28-day closure of 28 of the company’s 41 factories by the Malaysian Government.
Top Glove came under fire again last month after it emerged that a whistleblower had been dismissed in October for sharing pictures of worker conditions.
Blackrock states in its voting bulletin that the conditions revealed by whistleblowers and investigations by US and Malaysian government agencies are a “stark contrast to what the board has conveyed to shareholders”.
The US investment giant describes the “board’s ineffectiveness in COVID-19 mitigation and inadequate oversight of worker health and safety issues” as “especially egregious”, and stresses the “potentially serious implications for its reputation as a supplier of such equipment to hospitals around the world.”
Top Glove’s willingness to engage is acknowledged by Blackrock, but ultimately, it concludes: “Given the gravity of the situation and the material failure in oversight by the board, BIS voted against the reelection of the current members of the Board of Directors.” The investor adds that it intends to “hold other incumbent directors not on ballot at this AGM accountable by voting against their re-election at future shareholder meetings.”
NBIM did not publish its reasons for voting against the directors.