Proponents with a conservative political bent have filed most of their shareholder resolutions on social policy issues (top graph). The proposals have expressed support for free market solutions to the world’s ills and push-back against policies that favor protections for LGBTQ people or abortion rights. More usually get omitted than go to votes, although this was not true last year (bottom graph). Support from other investors tends to be scant, unless the resolved clauses are ones copied from other proponents with opposing views on political activity.
The National Center for Public Policy Research (NCPPR), a Washington, D.C.-based think tank, is the main player, with resolutions also filed by David Ridenour, one of its principals, and like-minded supporters. NCPPR calls itself “the nation’s preeminent free-market activist group focusing on shareholder activism and the confluence of big government and big business.”
Board diversity: Repeating an approach begun in 2018 that copies board diversity resolutions initially filed by the New York City Comptroller’s Office, NCPPR wants five companies—AT&T, Costco Wholesale, Deere, Johnson & Johnson and Pfizer—to adopt a policy to disclose to shareholders the following:
A description of the specific minimum qualifications that the Board’s nominating committee believes must be met by a nominee to be on the board of directors; and
Each nominee’s skills, ideological perspectives, and experience presented in a chart or matrix form.
The disclosure shall be presented to the shareholders through the annual proxy statement and the Company’s website within six (6) months of the date of the annual meeting and updated on an annual basis.
The proposal makes arguments in favor of diversity that parallel those expressed by supporters of greater diversity. But they aver that what is missing is “ideological diversity.” The resolution says that companies do not display “diversity of thought” but instead “operate in ideological hegemony that eschews conservative people, thoughts, and values. This ideological echo chamber can result in groupthink that is the antithesis of diversity. This can be a major risk factor for shareholders.”
Results—None of the seven proposals on the subject that went to votes last year earned more than 3 percent. The first vote this year was 1.4 percent at Costco Wholesale, and the next was 1.1 percent at Deere on Feb. 26. The other three recipients have convinced the SEC that their current board nomination processes address the concerns raised and the proposals were omitted on mootness grounds.
Diversity at work: An individual last year said conservatives at Facebook face cultural discrimination and proposed the company make efforts to increase their number through affirmative action, but he received support from just 0.5 percent of the shares voted. This year, NCPPR has taken up the idea and filed a similar resolution at Alphabet, Apple, Salesforce.com and Starbucks, asking for a report “detailing the potential risks associated with omitting “viewpoint” and “ideology” from its written equal employment opportunity (EEO) policy.”
Results—The first vote will occur on March 28 at Starbucks. Apple convinced the SEC this is an ordinary business matter, and challenges similar to Apple’s await the SEC’s response at the two other firms, making votes there unlikely.
Gay pride flag: An individual last year asked Intel to make a statement about the gay pride flag, saying the practice was disparaging to those who do not support LGBTQ rights, but it was omitted on ordinary business grounds. The same person is back this year with a similar request. He asks, “that Intel refrain from publicly displaying the pride flag.” The company has challenged the proposal again, arguing as last year that it relates to ordinary business.
Lobbying: NCPPR supports unfettered corporate spending in the political arena but takes language from the resolved clauses of proponents who want spending disclosure. (The main political activity campaign is covered in this report under Political Activity, p. 31.) The group also is critical of companies that support environmental regulation and incorporates these values in its resolutions. This year, The NCPPR resolution praises both companies for supporting the American Legislative Exchange Council and the Business Roundtable and says they should continue to “advance economic liberty” and “free speech rights.”
Results—NCPPR filed its lobbying proposal at Chevron, where a vote will occur at the end of May. The NCPPR resolution uses the same resolved clause as the main lobbying campaign but is informed by different motives; the 2020 NCPPR proposal got to Chevron before the pro-disclosure proponents and has been omitted because SEC rules allow companies to exclude the second-received resolution on the same issue. But the opposite occurred at Walt Disney, where the main lobbying proposal blocked the NCPPR version. Further similar resolutions are likely to crop up as the season progresses. Because the resolved clauses of the NCPPR resolutions are exactly the same, investors seem to vote the same way and results have been in the high 20-percent range.
Charitable giving: Tom Strobhar, a conservative activist who has filed many anti-abortion resolutions about Planned Parenthood support from companies’ charitable giving programs in the past, is back in 2020 with at least four resolutions that ask Bank of America, JPMorgan Chase, MGM Resorts International and Pfizer to disclose the recipients of any corporate charitable contributions of more than $1,000, “excluding employee matching gifts.” At Bank of America, MGM and Pfizer, Strobhar asks the boards to “consider issuing a statement on the Company website, omitting proprietary information and at reasonable cost, disclosing the Company’s standards for choosing which organization receive the Company’s assets in the form of charitable contributions, and the rational, if any, for such contributions.”
Results—The proposal arrived past the submission deadline at Bank of America, has been withdrawn at MGM and was omitted on mootness grounds at Pfizer. It remains pending at JPMorgan, but a similar proposal was omitted on ordinary business grounds given its specificity in 2018 and another omission seems likely because the company is reiterating its argument.
