Hewlett-Packard facing two shareholder resolutions on human rights at AGM

Faith investors argue HP’s policies are “limited in scope”

Computer giant Hewlett-Packard is facing two shareholder resolutions on human rights issues at its annual meeting later this month.

A group of faith investors is calling on the company to review its policies, arguing they are “limited in scope and provide little or no guidance” for determining business relationships that could “entangle the company in human rights violations”.

“HP should be able to assure shareholders that employees are treated fairly and with dignity wherever they work in the global economy. Going beyond internal practices, however, the company should be able to provide assurance that its products and services are not used in human rights violations,” the investors’ proposal says. HP holds its AGM on March 20 (proxy).

The motion has been tabled by the Board of Pensions of the Presbyterian Church, the Benedictine Sisters of Boerne, Texas, the Congregation of Divine Providence, the Global Ministries of the United Methodist Church and Mercy Investment Services.

They point out that HP does business in countries with human rights challenges including China, Colombia, Philippines, Russia, and Israel and the occupied Palestinian territories.

HP is advising its shareholders to vote against the resolution, saying it is unnecessary and that it has already taken the action sought by the proposal.

The other human rights-related resolution has been tabled by activist Dr. Jing Zhao, who wants the formation of a board level human rights committee. But HP says it is “not in the best interest of stockholders” and that it already has a global human rights program in place and that its existing board Nominating and Governance Committee handles corporate social responsibility (CSR) and human rights issues.The shareholder proposals come as a recent report by Ecclesiastical Investment Management of the UK argued that the advent of globalised supply systems – and the appetite of companies to operate in challenging territories – “materially increases the risk of complicity in human rights violations”.

“Globalised operations and supply chains have considerably heightened the risk, and getting it wrong can have catastrophic effects on reputation and the ‘licence to operate’,” says Ecclesiastical’s Senior Socially Responsible Investment Analyst Neville White in Human Rights: Human Wrongs an Emerging Corporate Risk.

Last month CtW [Change to Win] Investment Group, which works with US union pension funds, wrote to fellow HP investors ahead of the AGM. They urged them to vote against the re-election of Kennedy Thompson and John Hammergren as directors, over their role in the company’s series of ill-fated acquisitions. CtW also advised against ratifying auditor Ernst & Young.

It all comes as proxy advisory firm Institutional Shareholder Services (ISS) has advised investors to reject HP’s chairman Ray Lane as well as Thompson and Hammergren.
Fellow advisory firm Glass Lewis recommended shareholders vote against four directors.
Separately Dutch pension fund group PGGM has been appointed lead plaintiff in investor lawsuits relating to HP’s inauspicious $10.3bn takeover of UK software firm Autonomy. Law firm Bernstein Litowitz Berger & Grossmann was named lead counsel in the class action case. Dutch pension services firm Mn Services is also part of the HP class action.