The Latest Corporate Social Responsibility News - Shareholder Activism 2.0: Binding Bylaw Amendments Seek to Hold TARP Banks Acc
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11.18.2008 - 11:59pm ET
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The Latest Corporate Social Responsibility News - Shareholder Activism 2.0: Binding Bylaw Amendments Seek to Hold TARP Banks Accountable for Economic Security
(CSRwire) While Citi
is hemorrhaging over 50,000 jobs in response to the market collapse
triggered by the subprime mortgage meltdown, the bank is foregoing
the band-aid measure of sacrificing executive bonuses, which Goldman
Sachs did this week (followed by others.) This voluntary sacrifice of
executive compensation is a welcome symbolic gesture addressing the
symptom, but it falls short of a comprehensive cure to the core problem.
Starting in 1993,
socially responsible investors have been filing shareholder resolutions
urging banks to root out the cause - predatory subprime lending - as
well as resolutions on obscene executive compensation and obscure
derivatives as problems persisted.
Now, SRI
firm Harrington Investments, Inc (HII) is raising the stakes by filing
resolutions asking banks receiving billions of Federal assistance under
the Troubled Asset Relief Program (TARP) to institutionalize board-level
accountability for economic security. HII seeks to fill the
accountability void when the US Treasury handed over US taxpayer money to
the likes of Bank of America ($10 billion), Citi, and Goldman Sachs ($25
billion each) in exchange for preferred stock -- with no voting rights --
by creating Board Committees on US Economic Security. The HII resolution
defines economic security in terms that may sound unfamiliar to banks,
such as long-term health of the economy and economic well-being of US
citizens.
HII innovated "Shareholder Activism 2.0" strategies by filing resolutions
seeking binding bylaws amendments, instead of the “precatory” or
advisory nature of most shareholder resolutions where companies can ignore
even 99 percent votes. In other words, the resolutions seek to leverage
shareholder power to codify risk management mechanisms into company DNA to
counteract the lax board oversight that "brought the global economy to the
brink of disaster." It will be interesting to see if a majority of
shareholders want accountability from those who gambled away the security
of their shareholder value -- and of overall economic stability.
This article was written by CSRwire contributor Bill Baue.
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on his own "white house" lawn.
Intel Chairman Craig R. Barrett talks with top engineers from around the
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from Stephen Howard of Business in the Community. Howard asks if CSR
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should be of even greater emphasis in times of hardship.
This might be the week of inspiring CEOs: Jean-Philippe Cousteau, the
co-founder and CEO of Earth Echo International, is also the grandson of
the famous oceanic explorer Jacques Cousteau. In this video he tells young
people all over the world that every choice they make is making
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positive.
Don't miss this new report that tracks the trends
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is a British provider of stock market indices and associated data services.
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To read the latest corporate social responsibility news from leading
socially responsible organizations, visit http://www.csrwire.com/LastAlert.html.
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