SEC attempting to rein in shareholder activism

Most of the time when I talk about how consumers interact with companies, I do so in terms of boycotts and buycotts. But lately I’ve been thinking about a related topic: the attempt to make businesses behave better by changing them from within via shareholder activism.

I meant to blog last month about this excellent story in the New York Times Magazine that profiles a nun’s decade-long effort to challenge ExxonMobil on global warming by submitting resolutions at annual shareholder meetings. But I guess I got sidetracked.

Now the subject has taken on new importance, because the U.S. Securities and Exchange Commission is proposing rules that would make it harder for individual shareholders like Sister Patricia Daly to file resolutions—and make it easier for companies to get rid of such resolutions.

Why should we care? Well, for one thing, because companies are owned by shareholders. Shouldn’t boards of directors be obligated to listen to the concerns of their owners? And it really is just listening—these proxy resolutions are merely advisory. That doesn’t mean they’re not important, however. Resolutions are a crucial means for bottom-up communication with companies about the pressing social and environmental issues of our day. They represent one small way for individuals to remind businesses that it’s possible to both make a profit and behave responsibly.

The SEC is still taking comments on this deplorable idea, but only through Sept. 28. Follow this Co-op America link, and try to talk some sense into SEC chairman Christopher Cox.