URGENT ACTION ALERT! Shareholders’ Right to File Proxy Resolutions in Jeopardy

The Securities and Exchange Commission (SEC) has floated for public comment two proposals with dire ramifications for socially concerned investors.

2007

The Securities and Exchange Commission (SEC) has floated for public comment two proposals with dire ramifications for socially concerned investors.

Our very right to file non-binding shareholder resolutions may be handed off to the discretion of individual companies, instead of being protected by federal rules as it is now.

WHAT’S AT STAKE:

Shareholders could lose their unique rights to place resolutions on the proxy ballot.
Shareholder resolutions made a key contribution to the high-impact campaigns to end apartheid in South Africa, expand corporate environmental reporting, improve workforce diversity, disclose political contributions and many more improvements. We’ve written about many of these efforts in the pages of Investing For A Better World over the years.

Please take action immediately by visiting www.SaveShareholderRights.org.
SaveShareholderRights.org contains more information, and direct links to the SEC and Congress with sample language. The deadline for submitting comments is October 2, 2007.

Additional resources:

“SEC Threats Shareholders’ Rights To File Resolutions,” September 2007 edition of Investing For A Better World

The text of Trillium Asset Management’s letter to the SEC can be found below.
The SEC’s proposals can be found at:

[PDF] Shareholder Proposals (Release No. 34-56160)

[PDF] Shareholder Proposals Relating to the Election of Directors Release No. 34-56161)

To view the comments of other respondents, visit:

Comments on Release No. 34-56161
Comments on Release No. 34-56160

Trillium Asset Management’s letter to the SEC

September 13, 2007

Nancy M. Morris
Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Re: Comment on Release Nos. 34-56160 (File No. S7-16-07) and 34-56161 (File No. S7-17-07).

Dear Secretary Morris:

Trillium Asset Management Corporation is a Boston-based investment firm specializing exclusively in socially responsible asset management. We currently manage about $1 billion for institutional and individual clients.

Since our founding in 1982, Trillium has been deeply involved in the process of shareholder advocacy through letters and dialogue with companies, sponsorship of shareholder resolutions and by voting proxies. It is integral to our mission as a company — and is a critical piece of the value we provide to our investment clients — to use our influence as shareholders to encourage corporations to act in an environmentally, socially and fiscally responsible manner. We view this as an essential part of our fiduciary duty.

We write today to express our views on Release Nos. 34-56160 and 34-56161.

The Commission has stated its desire to have rules adopted in time for the 2008 proxy season. However, it would be highly inappropriate for the Commission to hold a vote on these proposed rules until Commissioner Campos’s replacement is sworn in due to the radical and far-reaching nature of the proposals.

Director nominations

We wish to go on record in opposition to the restrictions that have been posed in both proposals on the rights of investors to nominate board directors (save reasonable ownership thresholds, which we comment upon below). Recent proxy access proposals have received majority and near-majority votes, demonstrating strong investor demand for this right.

Investors should have the right to nominate their own directors, whose alleged purpose is to represent our interests. That the right to merely nominate directors is regarded as threatening starkly highlights the lock on corporate governance enjoyed by entrenched boards and managements; shareholders, after all, would still face the uphill battle of getting their nominees elected.

The 5% ownership requirement that has been floated begs credibility as a serious alternative, given the practical obstacles in amassing a group of shareholders of that size.

As another commentator has noted, the competing proposals to either eliminate proxy access or limit it to 5%-plus investors amount to a “heads I win, tails you lose” proposition. Neither alternative is acceptable. Commissioner Ann Nazareth has rightly dubbed the 5% alternative as the “non-access” proposal because of the practical obstacles preventing the organization of a coalition representing that great a percentage of owners to file a shareholder resolution.

Nonbinding resolutions

For decades, the relatively low thresholds embodied in Rule 14a(8) have, on balance, greatly benefited corporations and large and small shareholders. Without the catalyst of shareholder resolutions, corporations might well have ignored a wealth of shareholder-instigated reforms such as expanded requirements for executive pay disclosoure; enhanced environmental management and reporting systems; codes of conduct to guard against foreign labor abuses and human rights risks; enhanced equal employment programs and policies; and increased attention to the business impact of climate change. By driving voluntary corporate reform, this dynamic process has educated both managers and investors; enhanced companies’ corporate governance, risk management, and operational excellence; and surely forestalled much legislation in these issue areas.

According to the Investor Responsibility Research Center, non-binding resolutions constitute 95% of all resolutions filed. Of the 1,400 resolutions filed each year, one-quarter to one-third are withdrawn, mostly due to successful agreements between investors. In these discussions, both sides learn a great deal. In our twenty-plusodd years of shareholder advocacy, the staff at Trillium Asset Management can personally testify to dozens of positive relationships with companies that were jumpstarted by shareholder resolutions. Shareholder resolutions are responsible for the Ceres memberships of General Electric, Sunoco, Baxter, and Bank of America, to name just a few. They have enhanced nondiscrimination policies at over fifty companies. These are commitments that corporations routinely boast about in their public relations material. Yet it remains a sad reflection of some corporations’ insularity that it too often requires the exercise of the right to file to get in the door. If the resolution process is gutted, many corporations may turn a deaf ear to all but their biggest shareholders, which could drive smaller investors to resort to more adversarial actions and reduce opportunities for mutually beneficial collaboration.

Three possibilities that have been suggested stand out to us as particularly problematic.

The opt-out option. This would create two universes of companies for investors with perverse consequences. Those companies that provided a formalized means of shareholder input would bear an associated administrative burden not borne by the others. These would likely be companies with superior stakeholder management and governance skills; those who opt out, ironically, would likely be the very companies in greatest need of shareholder input.
The electronic petition model. This scenario would effectively keep shareholder resolutions out of sight and out of mind. Companies would not have to respond to the proposal, so voting shareholders would have no idea of where a company stood on the issue raised.

Except for the requirement that such web-based resolutions contain no “false or misleading” material, any subject could be addressed. Removing the gatekeeper function could result in the submission of many more than are now currently filed, which would encourage the submission of proposals irrelevant to corporations’ well-being. This “chat room” model is a non-starter unless it is used as an addition to the current mechanism, not as a substitute.

Resubmission thresholds. The Commission has proposed raising resolution resubmission thresholds from 3% in the first year, 6% in the second year, and 10% every succeeding year to 10, 15 and 20% respectively. These higher thresholds would have squelched numerous resolutions that took time to gain support because shareholders needed time to study them. The 3-6-10% thresholds already provide requirements that proponents demonstrate sufficient investor interest to maintain the opportunity to bring forward proposals.

Acceptable reforms

In order to meet its objectives of facilitating annual board elections, encouraging new uses of technology in management-shareholder communication, and easing the burden upon staff, we encourage the following:

Affirm the right to nominate directors. In place of a 5% threshold, an acceptable compromise would involve setting forth, for example, a staggered threshold based on market cap, wherein large companies require a lower threshold.

Reduce the burden on staff by eliminating the “ordinary business” exclusion. The level of support a resolution receives is the best and most objective indicator of what shareholders consider the ordinary business of corporations.

Retain the 3-6-10% resubmissions thresholds for reasons stated above.

We thank you for considering our input.

Sincerely,

Joan Bavaria
President & Chief Executive Officer

Urge the Oil Companies to Leave the Arctic Refuge Alone

Please send this letter to top management at BP, Chevron and ExxonMobil.

Addresses

Ask McDonald’s to Adopt Global Farm Animal Welfare Standards

Please send this letter to McDonald’s Chairman and CEO Jack Greenberg.

Dear Mr. Greenberg:

I am writing to urge that McDonald’s adopt and implement globally the farm animal welfare standards that it requires of its suppliers.

<Please include a personal paragraph describing yourself and why you are concerned about this issue.>

In America and Great Britain, McDonald’s is a corporate leader in setting standards for its suppliers regarding the humane treatment of farm animals.

However, by failing to adopt and implement animal welfare standards globally, McDonald’s continues to buy from suppliers engaged in egregious cruelty towards animals. Approximately one-half of McDonald’s restaurants are located outside America and Great Britain.

McDonald’s risks harm to its good reputation and image if it continues to buy from suppliers engaged in abuse of animals. Consequently, I urge McDonald’s to protect and enhance its business by ensuring that its suppliers worldwide meet the highest standards for farm animal welfare.

Please write back and tell me what action McDonald’s will take to adopt and implement globally its farm animal welfare standards .

Sincerely,

Your Name

Your Address

Tell the SEC to Allow Shareholder Resolutions on Sweatshops

Tell the SEC to Allow Shareholder Resolutions on Sweatshops

Earlier this year, the Securities and Exchange Commission (SEC) allowed Wal-Mart Stores to omit an anti-sweatshop resolution from its annual shareholder meeting.

The reason? Shareholder proponents had the audacity to make a reference in their resolution to paying a living wage, a key issue in the sweatshop debate. The SEC currently allows corporations to exclude any shareholder resolution that mentions wages.

This SEC decision threatens the ability of shareholders to bring similar resolutions to companies on an important public policy issue. The issue of paying a living wage to workers is at the heart of the public debate on how to eliminate sweatshops.

Wal-Mart has since taken the major step of informing the SEC that the company was withdrawing its opposition to the appeal on the grounds of ordinary business. We commend the company for making this important decision. Now the SEC needs to reverse its decision.

You can help by going to the web site of the Shareholder Action Network at http://www.shareholderaction.org. There, you can sign a letter of concern that will be sent directly to SEC Chairman. Or you can send letters to all five SEC commissioners.

Thanks for your support!

Make General Electric a Landmine-Free Zone!

1. If you have stock in GE, be sure to vote in support of our proposal. Look for your proxy ballot in the mail starting in March. (If you don’t usually receive corporate ballots, the company may be sending them to your broker or investment manager, and you will have to instruct them to vote for this proposal or send you the ballot.)
2. Send an e-mail or letter directly to GE in support of the proposal. Sample text:
   

   Mr. Jack Welch Chairman and CEO General Electric Company 3135 Easton Turnpike Fairfield, CT 06431Dear Mr. Welch:Each year, 22,000 people are killed or maimed worldwide by landmines. Landmines are weapons of terror. They are strategically buried to block access to land and water resources, which has the effect of impoverishing populations as well as maiming and killing civilians. Ninety percent (90%) of landmine victims are civilians, and 30-40% are children. The vision of a landmine-free world has caught the imagination of the world’s peoples and their governments. One hundred thirty-eight countries have signed the 1997 Mine Ban Treaty, and 101 nations have ratified it. We urge General Electric to embrace this vision, and unequivocally adopt a policy renouncing any future involvement in the production of landmines or their components, as is requested in a shareholder proposal appearing on the 2001 proxy ballot. Landmine abolition would not imperil the security of the United States. In 1996, 15 distinguished retired U.S. military officers told Clinton in a full-page open letter in the New York Times: “Given the wide range of weaponry available to military forces today, antipersonnel landmines are not essential. Thus, banning them would not undermine the military effectiveness or safety of our forces, nor those of other nations.” They also said, “We view such a ban as not only humane, but also militarily responsible.” Those who signed include General David Jones, former Chairman of the Joint Chiefs of Staff; General Norman Schwarzkopf, Commander Operation Desert Storm; General John Galvin, former Supreme Allied Commander Europe; Lt. General James Hollingsworth, former Commander of U.S. forces in Korea; and Lt. General Robert Gard, former President, National Defense University. This year, Generals Hollingsworth and Emerson reiterated the need for the US to join the Mine Ban Treaty. Nineteen companies that were once involved in the production of landmine components have pledged no future involvement in this destructive business. Please join those companies and ensure that GE will truly live up to its pledge to “bring good things to life” — only good things. Sincerely, Your name

3. Whether or not you are a GE stockholder, help us urge the company’s largest stockholders to support the proposal. Their support is critical! Our sample letter is followed by contact information for GE’s top shareholders.
   

   Eric Roiter Fidelity Research & Management 82 Devonshire Street Boston, MA 02109Dear Mr. Roiter:This year, shareholders of General Electric Company (GE) have sponsored a ballot proposal that asks the company to establish a firm policy to renounce future involvement in antipersonnel and cluster bomb production. I urge you to vote Fidelity’s GE shares in favor of this proposal. [If you own shares in a Fidelity mutual fund, be sure to note that you are writing as a client as well.] Each year, 22,000 people are killed or maimed worldwide by landmines. Landmines are used principally as weapons of terror. They are strategically buried to block access to land and water resources, which has the effect of impoverishing populations as well as maiming and killing civilians. Ninety percent (90%) of landmine victims are civilians, and 20-30% are children. The vision of a landmine-free world has caught the imagination of the world’s peoples and their governments. One hundred thirty-eight countries have signed the 1997 Mine Ban Treaty, and 101 nations have ratified it. The Treaty calls for a total ban on use, production, stockpiling and transfer of antipersonnel landmines. The U.S. was one of the world’s biggest exporters of landmines until 1992. Our country observes an export ban, but the position of the new Administration on the landmine treaty is not clear, and we have not acceded to the treaty. Landmine abolition would not imperil the security of the United States. In 1996, 15 distinguished retired U.S. military officers told Clinton in a full-page open letter in the New York Times: “Given the wide range of weaponry available to military forces today, antipersonnel landmines are not essential. Thus, banning them would not undermine the military effectiveness or safety of our forces, nor those of other nations.” They also said, “We view such a ban as not only humane, but also militarily responsible.” Those who signed include General David Jones, former Chairman of the Joint Chiefs of Staff; General Norman Schwarzkopf, Commander Operation Desert Storm; General John Galvin, former Supreme Allied Commander Europe; Lt. General James Hollingsworth, former Commander of U.S. forces in Korea; and Lt. General Robert Gard, former President, National Defense University. This year, Generals Hollingsworth and Emerson reiterated the need for the US to join the Mine Ban Treaty. Taking take the anti-landmine pledge would not threaten General Electric’s business strategy, as the company has not engaged in landmine component production in nearly a decade. For all of these reasons, please vote Fidelity’s shares in support of this important proposal. Tell GE to take a firm stand in support of this humanitarian and achievable campaign on behalf of innocent civilians worldwide. Sincerely, Your name

General Electric’s top 10 shareholders are:

Fidelity Research & Management
82 Devonshire Street
Boston MA 02109
Attn: E ric Roiter

Barclays Bank PLC
54 Lombard Street
London EN EC3P 3AH
United Kingdom
Attn: Vivien Lin

State Street Corporation
225 Franklin Street
Boston, MA 02110
Attn: Frederick P. Baughman

Vanguard Group Inc.
100 Vanguard Blvd.
PO Box 2600
Valley Forge, PA 19482
Attn: Raymond J. Klapinsky

Putnam Investment Managment Inc
One Post Office Square
Boston, MA 02109
Attn: Nancy Fisher

Mellon Bank Corp.
One Mellon Bank Center
Room 0980
Pittsburgh, PA 15258
Attn: Jacqlyn D.Stein

JP Morgan Chase & Co.
270 Park Avenue
New York, NY 10017
Attn: Anthony Horan

Janus Capital Corp.
100 Fillmore Street
Suite 300
Denver, CO 80206
Attn: Heidi J. Walter

Taunus Corporation
31 West 52nd Street
New York, NY 10019
Attn: Damian Reitemeyer

TIAA-CREF Investment Management LLC
730 Third Avenue
New York, NY 10017-3206
Attn: Richard Schlefer

Public Pension Funds – GE’s largest public pension fund investors

TIAA CREF (Teachers Insurance and Annuity Association & the College Retirement Equities Fund
730 Third Avenue
New York, NY 10017-3206
Attn: Richard Schlefer

CALPERS (California Public Employees Retirement System)
400 P Street
Sacramento, CA 95814
Attn: Denise M. Arend

New York State Common Retirement Fund
AE Smith State Office Building, 6^th Floor
Albany, NY 12236
Attn: John E. Hull

California State Teachers Retirement System
7667 Folsom Boulevard
Sacramento, CA 95816-3749
Attn: John Petzold

State Board of Administration of Florida
1801 Hermitage Boulevard, Suite 100
Tallahassee, FL 32308
Attn: Tom Herndon

Michigan Department of Treasury
P.O. Box 15128
Lansing, MI 48901
Attn: Vernon L. Johnson

State Teachers Retirement System of Ohio
275 East Broad Street
Columbus, OHG 43215
Attn: Stephen A. Mitchell

Urge Your Bank to Finance Projects Responsibly

Do you own shares or bonds of Chase Manhattan Bank, Citigroup, or Morgan Stanley Dean Witter? Do you use their banking, credit card, or investment management services? If you do, write and urge them to finance projects responsibly.

Addresses

Sample Letter

Dear Mr. ________:

I am writing to urge that your bank take action to incorporate environmental and human rights considerations into its policy and procedures for underwriting stocks and bonds.

<Please include a personal paragraph describing yourself, your business with the bank, and why you are concerned about this issue.>

The recent controversy over the bank underwriting of PetroChina stock and China Development Bank bonds highlights the need for banks to carefully assess the environmental and human rights impact of the stocks and bonds that they underwrite. Underwriting the securities of corporate bad actors and financing – even indirectly – controversial infrastructure projects, such as the 3 Gorges Dam, can quickly and dramatically hurts a bank’s goodwill and consumer businesses.

I urge you to take action to ensure to address these important issues as the same time as protecting your good reputation and franchise.

Please write back and tell me how you intend to address this critical concern.

Sincerely,

Your Name

Your Address

Urge ExxonMobil to adopt an explicit sexual orientation nondiscrimination policy, and to grant same-sex domestic partnership benefits

Lee R. Raymond
Chairman
ExxonMobil Corporation
5959 Las Colinas Blvd.
Irving, TX 75039

Support the Access for Afghan Women Act of 2001

On Monday, November 19, Representatives Constance Morella  (R-MD) and Carolyn Maloney (D-NY) introduced a bill into Congress that outlines the concrete and specific steps the United States should take to ensure that women in Afghanistan have a voice in the future of the country and that Afghan women get the relief aid that they desperately need.

The Access for Afghan Women Act requires the U.S. government to:

• Consult with and include representatives of women’s organizations and networks from the major ethnic groups in Afghanistan during peace negotiations and post-conflict decision making.
• Ensure that the full range of human rights of women, as described in the International Convention on Civil and Political Rights and the Universal Declaration of Human Rights, are included in any constitution or legal structure  of a future government in Afghanistan by including a significant number of women in the drafting of a new constitution.
• Provide financial and programmatic assistance for the efforts of Afghan women’s organizations that represent the various ethnic groups.
• Provide financial assistance for primary, secondary, and higher education for all individuals in Afghanistan.
• Provide financial assistance to build health infrastructure and to deliver women-centered health programs, particularly comprehensive and high quality reproductive health and family planning services.
• Provide assistance to rehabilitate children affected by the conflict, particularly child soldiers.
• Take all necessary steps to protect women refugees in camps, urban areas, and villages from violence.
• Take all necessary steps to ensure that women refugees in camps, urban areas, and villages fleeing from the conflict situation in Afghanistan are directly receiving food aid, shelter, relief supplies, and other services from United States-sponsored programs.
• Promote multi-year women-centered economic development programs, including programs to assist widows and female heads of household.
• Increase women’s access to and ownership of productive assets such as land, agricultural in puts, and microfinance, and property.

For more information, and contact information for Congress, visit Women’s Edge.

Keep Humanitarian Aid Flowing to Afghanistan

We urge you to contact US policymakers as they consider options for responding to the September 11 terrorist attack. For years, millions of Afghans have lived in desperate poverty under the oppressive and misogynist rule of the Taliban. 

The US government has pledged $125 million to support UN Secretary General Kofi Annan’s September 27 appeal for humanitarian assistance to shore up the UN’s food, shelter and medical programs in Afghanistan. But we also need to support the good work of civic groups working to provide direct assistance and to educate the world community about the plight of the Afghan people. We refer to such groups as the Revolutionary Association of the Women of Afghanistan, the Women’s Alliance For Peace and Human Rights in Afghanistan, Physicians for Human Rights, and HelpAfghanWomen.com (a project of the Feminist Majority). We urge you to visit their web pages for ongoing updates about Afghanistan, and information as to how you can help.

Support the Burma Freedom Act in Congress

Background

Last November, the International Labor Organization (ILO) called on all of its members – which include governments, labor unions, and employers – to review their relationship with Burma to ensure that they are not contributing to forced labor in Burma.

This is the first time in its history that the ILO has taken such an extraordinary step. This is largely because the scale of forced labor in Burma is horrifying and widespread.

Several U.S. Senators and U.S. Representatives have co-sponsored new legislation in Congress – the Burma Freedom Act – to help stop forced labor in Burma. Since the military junta uses forced labor in all aspects of the Burmese economy, this bill seeks to ban U.S. imports from Burma.

For the text and current co-sponsors of the U.S. Senate bill (S.926) click here.

For the text and current co-sponsors of the U.S. House of Representatives bill (H.R.2211) click here.

Please write your U.S. Senators and U.S. House Representative to urge them to co-sponsor these key bills.

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