Companies dislike shareholder resolutions.
“We hear from most companies that they would prefer just to discuss these issues with us without proposals”, says Danielle Fugere, President of US non-profit, As You Sow.
The prospect of an embarrassing public vote can sometimes be enough to nudge them into more meaningful engagement, in a bid to get proposals withdrawn. Still, it is unlikely that they will concede to a resolution’s demands in full just to avoid such an outcome being decided at the AGM - particularly when most votes are non-binding or have prohibitively high thresholds.
So when a company does make a commitment ahead of a vote, how do shareholders decide whether to withdraw a proposal or not? How do they separate a meaningful commitment from empty promises?
“There’s no science to it”, says Susan Makos, Vice President of Social Responsibility at Mercy Investment Services, the US faith-based investor that recently withdrew a proposal…