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How the Process Works
We seek to influence the actions of corporations through shareholder activism — including direct dialogue with company management and the filing of shareholder proposals — and through the principled use of proxy voting.
What Is Direct Dialogue?
As investors, we seek to focus the attention of companies on the broad range of stakeholders that their actions affect, from local communities to the natural environment. In this effort, we often work with nongovernmental organizations, such as environmental and human rights groups, and other investors.
When we have a concern with a company, we often begin by encouraging corporate management to come to the table to discuss our concerns. Many companies respond to this offer, and are willing to listen to our perspective. We have participated in numerous face-to-face discussions with senior management teams, sometimes lasting years.
What Is a Shareholder Resolution?
As owners of a corporation, shareholders have the right to take part in the firm’s strategic management by participating in annual meetings. A company’s management proposes issues to be voted on at these meetings, and shareholders have the right to place their own proposals on the ballot.
Shareholder proposals are an important part of the corporate governance process, and have been instrumental in raising issues and changing corporate practices. They provide us with the opportunity to place an issue on the corporate agenda that has been overlooked – climate change, for example, or human rights conditions in the company’s supply chain.
Since 1994, Domini has filed more than 230 shareholder proposals at 89 different corporations on a wide range of social and environmental issues. We file these proposals each year because they have proven to be a highly effective tool in changing corporate behavior. The submission of a proposal sends a strong signal to corporate management, and often encourages the company to speak to us to see if we might be able to reach agreement. If we can, then we are pleased to withdraw our proposal. If not, the proposal is printed in the corporate proxy statement and put to a vote of all company shareholders.
We generally submit our proposals in the Fall, and most annual meetings are in the Spring. You can view a complete list of every proposal we’ve ever filed. We also publish quarterly Social Impact Updates to keep you up to date on how your dollars are working for change.
What Is a Proxy Vote?
Most shareholders are unable to attend the annual meetings of the companies in which they own stock. Instead they participate in absentia, by way of a proxy vote. Investors in mutual funds delegate their proxy voting rights to the mutual fund manager.
Proxy ballots typically contain proposals from company management on issues of corporate governance, including the election of the board of directors, executive compensation, capital structure and auditors. They may also include shareholder proposals. Proxy voting is the primary forum where management seeks affirmation of what it’s doing, and where shareowners weigh in on important issues. Every mutual fund has a fiduciary duty to vote proxies for the stocks in its portfolio in the best interests of its shareholders.
Domini is committed to openness and transparency in proxy voting. Shareholders have an absolute right to know how their mutual fund is casting proxy votes on their behalf. We have published comprehensive voting guidelines regularly since 1992, and in 1999 we became the first mutual fund manager in America to publicly disclose its actual proxy votes. Thanks to a rule by the Securities and Exchange Commission, for which we petitioned the SEC and helped organize support by Domini Funds shareholders and members of the general public, all mutual funds are now required to make their voting guidelines and actual votes publicly available.