Guide to 2006 Proxy Season Aims to Increase Active, Informed Voting by Foundations
Global warming, political contributions, and sexual orientation anti-bias policies are hot issues; publication serves as “call to action” by outlining key issues and companies affected
New York and San Francisco, April 17, 2006 – Publicly traded companies are entering a “proxy season” in which more than 300 shareholder proposals of social import are up for votes. Resolutions related to global warming, political contributions, and sexual orientation anti-bias policies are among this year’s most controversial or “hot” issues while natural resources, toxics, and charitable giving showed sharp increases in interests. Worker’s rights and sustainability issues were the top vote getters in 2005 & 2004 and are expected to do well again this year. These findings, and guidelines to navigate the proxy process, are found in the second annual Proxy Season Preview, an important tool to help foundations – some of the nation’s largest shareholders – to cast engaged, informed votes on issues directly relevant to their missions and programs, and thereby influence corporate policy while also protecting the value of their endowments.
American foundations’ endowments have hold more than $500 billion, much of which is invested in the equities of U.S. companies. These investments place foundations on equal footing with large institutional investors. Yet research has shown that most foundations delegate proxy voting responsibilities to investment managers, who often automatically vote in accordance with management recommendations – even when they are not aligned with a foundation’s own interests and values. In fact, according to recent Council on Foundations statistics, while a growing number of foundations express interest in actively voting their proxies, the actual number of those doing so is declining.
Proxy Season Preview Spring 2006: Foundations Aligning Missions and Investment, published by the As You Sow and Jessie Smith Noyes foundations and Rockefeller Philanthropy Advisors, gives foundations an “at a glance” breakdown of upcoming proposals, the issues behind them, and which companies are involved.
“Foundations annually grant five percent of their endowments to support their missions, but how many utilize the remaining 95 percent to promote the same missions?” asked Michael Passoff, associate director of As You Sow’s Corporate Social Responsibility Program and author of the preview. “We received more than 3,000 requests for last year’s preview, which indicates that a growing number of foundations have recognized that it is time to take stock and take action – and that proxy voting is an easy first step to take” he continued.
Proxy proposals generally fall into two categories – governance, focusing on traditional managemen issues critical to a company’s financial health, and social, calling for policy changes relative to matters directly related to foundations’ programmatic goals. Proxy Season Preview Spring 2006 breaks down the issues commanding the most attention now, those that are ongoing, and those likely to be of concern in the near future. These include:
- Hot Issues: Global warming (e.g., greenhouse gas emissions reduction, climate science and energy efficiency); labor standards; political contributions; and sexual orientation policies.
- Fast-Growing Issues: Charitable giving; natural resources; and toxics.
- Top Vote Getters: Adopt sexual orientation anti-bias policies; equal employment opportunity; prescription drugs; and sustainability.
- Ongoing Campaigns: Animal welfare; genetically engineered food; HIV/AIDS; human rights; military sales; nuclear waste; predatory lending; recycling; tobacco; and sales of violent videos.
- New Issue: Customer Privacy
“It has long been our belief that when foundations do not consider the implications of their proxy votes, they are overlooking powerful opportunities to advance their missions and often acting against their own best interests,” said Doug Bauer, senior vice president of Rockefeller Philanthropy Advisors. “We have now given foundations the tools that can both anchor them in a constantly changing corporate landscape and help them be catalysts for change.”
Proxy Season Preview Spring 2006 offers a comprehensive list of companies with votes scheduled; foundations involved in filing particular petitions; a compendium of relevant recent news, including case studies of a shareholder dialogue, campaign and foundation voting policy; and a wrap-up of NGO involvement in the proxy process. It is a companion to an earlier publication, Unlocking the Power of the Proxy, which gave foundation representatives, for the first time, information they needed to understand how to exercise their fiduciary responsibilities relative to proxy voting – and why it was critical to do so.
“We created Proxy Season Preview Spring 2006 as a ‘call to action’ for our peer organizations to take leadership positions on issues that matter on the most basic of human levels,” said Victor De Luca, president of the Jessie Smith Noyes Foundation.
Proxy Season Preview Spring 2006 and Unlocking the Power of the Proxy are available at no cost by contacting Rockefeller Philanthropy Advisors at info@rockpa.org or 212-812-4330. They are also available as a downloadable PDF file at www.rockpa.org and www.asyousow.org. For more information about the Jessie Smith Noyes Foundation, please visit www.noyes.org.