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Action Alert: SEC Proxy, September 2007
Tell the SEC That Shareholder Resolutions Matter
Investors have real power to change corporate behavior for the better. On issues from climate change to sweatshops, from toxic chemicals to CEO compensation, Domini and our fund investors have used that power to tell the companies we own what we expect of them, and to help build a fairer and more sustainable world. One of our most important tools is the right to propose shareholder resolutions, on which every company shareholder then gets to vote.
The Securities and Exchange Commission is currently considering whether to issue new rules that could restrict or eliminate this essential tool for corporate accountability. Domini, on behalf of our investors, has filed about 150 of these resolutions since 1994. They have helped us convince companies to report their greenhouse gas emissions, adopt strong policies to protect the fundamental rights of workers in their global supply chains, publish sustainability reports, disclose political contributions, prohibit discrimination against gay and lesbian employees, and more.
In July, we asked Domini shareholders to contact the SEC about this important issue. More than 400 people responded in a matter of days, and the SEC heard us - actually referring to those emails in their recent proposal.
Now, your help is needed even more urgently. The SEC is seeking public comment on a series of concepts that, if adopted, could virtually eliminate shareholder resolutions. In some cases, the SEC is considering allowing companies to simply "opt out" of the process altogether. Please act now to make sure the SEC understands that investors like you value your voice in the boardrooms of the companies you own.
How can you help? Please send the customizable letter below to urge the SEC to protect shareholders' rights to propose nonbinding shareholder resolutions. Click "send message" below to send your message to Christopher Cox, the chairman of the SEC. Your prompt action can make a difference! Please note that your name (but not your email address) may appear on the SEC website. (Note: Tags like this "<p>" are for paragraph breaks. Please leave them in if you want a break to appear.)
Learn More: View the SEC's proposal, which contains (beginning at page 50) a series of open questions relating to the ability to file nonbinding shareholder proposals. (Domini's original Action Alert is referenced as “Form Letter B” in footnote 70 on page 50.)
View comments that have been submitted to the SEC.
Dear Chairman Cox:
I am writing today to ask the Commission to preserve a critical tool for corporate accountability and investor protection: the nonbinding shareholder proposal. Shareholder proposals have helped to promote transparency, improve corporate governance and performance, and raise important issues ranging from greenhouse gas emissions to sweatshops to sustainability reporting. In this way, investors have also brought visibility to important business risks that can have a profound impact on the value of our investments.
I am concerned that questions raised by the SEC may lead to the restriction or elimination of shareholders' rights to propose advisory resolutions under Rule 14a-8. As an investor, I regard shareholder resolutions as a valuable tool for shareholders to make their voices heard about the direction of our companies. I specifically oppose granting companies the ability to "opt out" of the shareholder resolution process, substituting electronic petitions or chat rooms for resolutions, or increasing the percentage vote required for resubmission in subsequent years.
It is to the credit of the SEC and our democratic system that small investors as well as large ones can participate in this process. Many of the most critical corporate reforms of recent years have been promoted by these small individual and institutional investors. The current proxy rules have facilitated a rich and diverse dialogue on some of the most critical issues of our time, from climate change to excessive executive compensation. I urge you to keep these current rules in place.
The many corporate scandals of recent years have underlined the importance of more communication, more transparency, and more accountability - not less. Nonbinding shareholder resolutions have proven effective in holding companies accountable to their owners. I ask that the Commission safeguard, not undermine, their use.
Please let me know what action you intend to take on this issue.