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Shareholder Activism: Real, Impactful, and At Your Fingertips
2 / 2 / 2018
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Taking advantage of your voting rights as an investor can invoke formidable change for causes you care about. While shareholder activism dates back decades, its impact is growing today.

In the late 1960s, a group of citizens, horrified by the number of civilians being maimed and burnt by the chemical napalm during the Vietnam War, decided to take action.

Forming a group called the Medical Group For Human Rights, they purchased shares in Dow, the company manufacturing and selling the chemical to the US government. Able to exercise their power as investors (and therefore part owners of the company) they proposed a vote to all shareholders, requesting consideration of an amendment to the company’s charter prohibiting any sale of napalm that led to human harm.

While Dow initially refused this request, with the backing of the Securities and Exchange Commission (SEC), a federal court overruled. Although the committee’s proposal received just 2% shareholder backing, Dow went on to stop manufacturing napalm. Importantly, the court ruling paved the way for shareholders to have a real impact on social issues.1

More recently, a movement to divest and boycott was a major contributing factor to ending apartheid in South Africa. It began years earlier as students across the country persuaded universities to divest from companies doing business in South Africa. The movement grew to 90 cities, 22 counties and 26 states, creating a firm economic stance against the racist South African government. As political will grew, Congress passed a series of economic sanctions against the country. As a result South Africa’s currency suffered and inflation rose. Under pressure to change, apartheid codes were dropped within a few years, non-whites were given the right to vote, and in 1994, Nelson Mandela was elected.2

Fast-forward to today, and shareholder activism continues to change the course of corporate carelessness. In May 2017, almost two-thirds of ExxonMobil’s shareholders told corporate executives to adhere to the Paris Climate Agreement, regardless of what the Trump administration decided.

Investors in Facebook and Twitter are the latest to speak up and file shareholder proposals, telling the social media companies to take more responsibility for content that promotes the mistreatment of women, fake news, election interference, violence, and hate speech.

According to As You Sow, a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, investors considered a near-record number of proposals filed on environmental, social, and sustainable governance issues at corporate annual meetings in 2017.

Major themes included corporate political influence, climate change policy, and economic inequality. Increasingly, shareholders want companies to disclose what they spend to influence government at all levels and how they will combat climate change and curb methane emissions. Diversity, equal pay and LGBTQ non-discrimination were also big issues for shareholders.3

Corporations everywhere are realizing that shareholders are watching and will hold them accountable, as is their prerogative. When a corporation takes your money, they give you the right to vote on company decisions. Unfortunately, in the past, this ‘right’ was mired in confusion, huge paper packets and bureacracy, but things are changing.

Voting in shareholder resolutions has never been easier thanks to OpenInvest’s technology, which provides investors with a short summary of ballot measures they care about. Our app is the only place where you can vote in shareholder resolutions with a swipe, giving power back to the people who own it.

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