Trillium Asset Management Supports Rally at Massachusetts State House to Support Shareholder Rights(Archive)
Trillium Asset Management Vice President Cheryl Smith and social research analyst Anne Parry participated in a rally at the Massachusetts State House in Boston to oppose a bill that would allow Massachusetts’ corporations to replace their annual shareholder meetings with online remote communication. The rally was organized by Bruce Marks, CEO of the Neighborhood Assistance Corporation of America, and Chuck Collins, Executive Director of United for a Fair Economy. Also in attendance were representatives from Walden Asset Management and the Domini Fund.
The rally was successful in derailing the “Electronic Communication with Shareholders” act that would have eliminated shareholders’ rights to directly participate in stockholders’ meetings. Hidden in the bill was a section stating that a Massachusetts’ company’s board of directors “may in its sole discretion determine that the annual meeting shall not be held at any place, but may instead be held solely by means of remote communication.”
“Remote” is the key word here: the bill was criticized as being “as undemocratic as it gets,” and “…a backdoor attempt to shield corporate America from its critics.”
Backing the bill were EMC Corporation and Associated Industries of Massachusetts. Other companies that would be benefit from the bill are State Street, Analog Devices, Genzyme, and Reebok. A State House representative at the rally acknowledged that the bill would also indirectly benefit EMC, which sells billions of dollars of data storage technology annually, by authorizing companies to store corporate records electronically.
Ms. Smith read a prepared statement at the press conference emphasizing the importance of active and vigilant share ownership: “Owners and shareholders have both the responsibility and the right to oversee corporations. Annual meetings are a governance mechanism allowing an open and honest exchange of ideas. Public, face-to-face, annual meetings are important for creating and maintaining accountability of management. Electronic meetings, held in no place, replace face-to-face communication, further separating ownership and management accountability. In an online meeting, questions by necessity must be submitted in writing, allowing censorship and screening of questions. Thus exclusively-online meetings become a means of protecting management from accountability to owners.”
Ms. Parry commented at the rally, “It’s not surprising EMC is backing this bill. At their annual meeting this past April, it was already evident they were trying to silence critical shareholders—there were no microphones in the audience, as is standard practice, and the only questions allowed from the floor were written and pre-screened by company management. They had known in advance representatives from Trillium and Walden were attending specifically to raise questions concerning corporate accountability.”
A spokesman for EMC said the company was aware of the social investment community’s criticism of the bill, but responded that a company’s annual meeting was not the appropriate forum for investors to raise their “public causes.” The president of Associated Industries said that silencing critical shareholders was not the intention of the bill: “…if people want to protest outside a company’s headquarters on the day of the annual meeting, they can still do that.”
The bill had moved very quickly through the Massachusetts State legislature, and was set to be approved in the Senate. Due to so much opposition from shareholders and members of the public, further action was postponed until there are public hearings to discuss and modify the bill. The bill’s principal sponsor, Senator David P. Magnani, has agreed to work with critics on a compromise that would still require the corporations to hold the annual gatherings in person, but also encourage broader participation by allowing out-of-state shareholders to take part in the meetings over the Internet.
For more information, contact:
Bruce Marks, CEO, Neighborhood Assistance Corporation of America at (617) 250-6230, or check out their website at www.naca.com, or
Chuck Collins, United for a Fair Economy at (617) 423-2148, or check out their website at www.ufe.org