One Share, One VoteThe U.S. Chamber of Commerce is confusing corporate democracy with the real thing.
Those with the largest stake in a company, get the most say. This may be a reasonable way to run a publicly traded company, but it should not be confused with actual representative democracy. This confusion is at the heart of an attack on an important corporate accountability tool – the shareholder proposal.
Each year, publicly traded corporations issue proxy statements, asking their shareholders to elect the board of directors and vote on a variety of matters, including any proposals offered by shareholders. If you hold one hundred shares in a corporation, you get one hundred votes.
‘Social-issue’ shareholder proposals often present the concerns of those who are left out of the corporate governance process, like employees and members of communities affected by corporate activity. Ecosystems have no voice unless we speak on their behalf. Votes for these proposals have risen dramatically over the past several decades, influencing practices at thousands of companies.
The U.S. Chamber of Commerce, the most powerful business lobby in the country, is asking the Securities and Exchange Commission to reconsider its rules, and make it more difficult for shareholder activists to raise issues like climate change and human rights.
Most shareholders, the Chamber says, don’t care about these issues. After all, they argue, these proposals rarely receive a majority vote at corporate annual meetings.
The Chamber is confusing corporate democracy with real democracy. Remember that “one share, one vote” principle? If a proposal receives a 10% vote, it does not mean that 90% of shareholders opposed it. It means that 90% of the shares voted opposed it. Individuals aren’t counted. Only shares are counted. And who controls the majority of those shares? Corporate executives, large mutual fund managers and other institutional investors are voting on behalf of millions of individuals like you who have never been asked their opinion.
It is simply false to say that “most shareholders” voted “No” on proposals asking companies to disclose their political contributions or report on their environmental impact when “most shareholders” have never been asked. You are essentially voiceless—unless you speak up.
You can end the silence today by asking your mutual fund manager about its proxy voting practices. Back in 2003 the SEC adopted a rule to require them to tell you how they voted. So don’t be shy. It’s your money, and your vote. You have a right to know.
Are the Domini Funds' votes consistent with your views? View our voting record and decide for yourself.