Investors continue to file shareholder resolutions that mirror the public debate about the influence of electronic media and platforms on public and private discourse and behavior—and the related risks to companies. Resolutions continue to focus on problematic content, with a few new ones this year from individual investors that seem headed for omission. Cybersecurity may be on the agenda again at one more company, but information on a pending proposal is not yet public.
Platform Content and Restrictions
Azzad Asset Management has a new proposal to Alphabet for a report “assessing the feasibility of publicly disclosing on an annual basis, by jurisdiction, the list of delisted, censored, downgraded, proactively penalized, or blacklisted terms, queries or sites that the company implements in response to government requests.”
At Amazon.com, individual Dan Phung characterizes as illegal the use of Amazon Web Services by Amazon’s customer, Palantir, for a contract with U.S. Immigration and Customs Enforcement. It reasons that Palantir’s efforts to identify people for deportation are forbidden by laws in several states, and that because illegal activity is contrary to the terms of service, this is a violation of company policy. It notes company employees have protested the contract, which its says disrupted operations and hurt the Amazon’s reputation in a key demographic from which it draws talent. The company is contending at the SEC that this concerns ordinary business since it is about customer relations.
At Apple, investors voted on a new resolution from SumOfUs. The SEC rejected a company challenge arguing that it was similar to an earlier proposal that did not earn enough support for resubmission, and investors on February 26 gave 40.6 percent support for a request that it produce annual reports
regarding the Company’s policies on freedom of expression and access to information, including whether it has publicly committed to respect freedom of expression as a human right; the oversight mechanisms for formulating and administering policies on freedom of expression and access to information; and a description of the actions Apple has taken in the past year in response to government or other third-party demands that were reasonably likely to limit free expression or access to information.
Several members of the Nunziato family want Comcast to curtail programming that shows the use of guns, asking that it
draw up a plan and begin implementing it to eliminate, step by step, all violence being shown on our network, beginning six months from passage of this proposal, and completed in no more than seven years. This would include all programming, past, present and future, whether produced by Comcast, our subsidiaries, or other companies that rent or lease our channels, specifically, anything showing automatic or semi-automatic weapons would be eliminated in no more than two years.
The company has challenged the proposal at the SEC, arguing it concerns ordinary business since it relates to programming and related business choices.
After an SEC challenge, As You Sow withdrew a proposal that suggested ways Facebook could change its business model to eliminate many of the reputational and legal risks that the company faces. It asked for a “reboot” by September in which the company would:
Delete all images of child pornography and torture, remove all associated accounts, and work with law enforcement to bring abusers to justice;
Delete all fake accounts and establish a verification system to improve expeditious removal;
Delete all political ads containing lies and mistruths based on Facebook employee recommendations to avoid adverse impact on our political system;
Publicly agree to a policy stating that Facebook will abide by campaign advertising rules like all U.S. broadcasters and end micro- targeting of groups smaller than 5,000 people;
As a show of Goodwill and until the platform can be effectively monitored, disallow any political ads Labor Day through the 2020 election;
Provide full transparency of the Reboot process including listing deleted political ads, Bots, fake accounts, fake news, deepfakes and accounts closed;
Disclose budget committed to fix these issues to inform other platforms as a case study of best practices; and
Establish systems to maintain all of the above going forward with public transparency.
A final resolution to Tribune Publishing has been omitted on procedural grounds. It sought “an annual “journalism report” detailing the company’s commitment to its core product—news. Available to investors, this report should... consider the relative benefits and drawbacks of the Company’s approach to journalistic integrity...”
Surveillance
Two proposals at Amazon.com address concerns about surveillance and technology. Harrington Investments has resubmitted a proposal that survived an SEC challenge last year and went on to earn 28.2 percent. It asks the company to report by September after commissioning an independent study that would examine
The extent to which such technology may endanger, threaten, or violate privacy and or civil rights, and unfairly or disproportionately target or surveil people of color, immigrants and activists in the United States;
The extent to which such technologies may be marketed and sold to authoritarian or repressive foreign governments, identified by the United States Department of State Country Reports on Human Rights Practices;
The potential loss of good will and other financial risks associated with these human rights issues.
The other resolution is from the Sisters of St. Joseph of Brentwood. They earned 2.2 percent last year for a proposal seeking a ban on facial recognition software. This year, they ask for “an independent third-party report...assessing Amazon’s process for customer due diligence, to determine whether customers’ use of its surveillance and computer vision products or cloud- based services contributes to human rights violations.” Amazon is arguing at the SEC that the resolution duplicates the Harrington proposal, which it received first; this challenge is likely to succeed.