Skip to main content

New top story from Time: Emboldened ESG Activists Ramp Up For Next Boardroom Showdowns

https://ift.tt/3A7pVvU

Mention Engine No. 1’s victory over Exxon Mobil Corp. last month to the socially conscious investing crowd and they’ll rattle off a wish list of targets that have so-far resisted calls to reform their social practices.

The possibilities include Twitter Inc., Facebook Inc., Netflix Inc. and private prisons, to name a few. The question, though, is whether the tactics Engine No. 1 used to gain three seats on the oil giant’s board are a viable method for other small activist investors to replicate against companies where they’d like faster change.

Most activist investors say: not exactly. But, inspired by Engine No 1., they are getting more aggressive. Some say they’ll use the threat of targeting the board to get companies to engage in their proposals. Eli Kasargod-Staub, co-founder of Majority Action, a non-profit that pushes for corporate accountability, plans to ramp up “just vote no” campaigns against undesirable directors. Others are suggesting specific board candidates that favor social change, and some are lobbying Engine No. 1 to find its next Exxon.
[time-brightcove not-tgx=”true”]

James McRitchie, an activist investor who over decades has sponsored hundreds of proxy proposals about social and governance issues, emailed Engine No. 1 to suggest they look at Netflix. Investors have approved several proposals that would make it easier to replace Netflix directors, but the streaming giant has not agreed to the changes.

Engine No. 1 wouldn’t comment on its next possible targets, though it owns stakes in Square Inc., Microsoft Corp., Shopify Inc., Zendesk Inc., and Penumbra Inc. Netflix said in its proxy statement this year that it is taking steps to be responsive to ESG concerns from investors.

“A more collaborative approach would be ideal,’’ Renaye Manley, deputy director at the Service Employees International Union, one of the groups leading the charge to pressure companies to perform racial audits, said on a June 10 Bloomberg Intelligence panel. “But I can certainly see this type of a kind of activist-investor approach over civil rights happening at some point in the future.’’

Nell Minow, who advises institutional investors on corporate governance issues at ValueEdge Advisors, said Engine No. 1 primed boards to be more alert and responsive out of fear of losing control.

“After we spent a lot of money on our first proxy contest, and took out a full-page ad in the Wall Street Journal for a quarter million dollars, we never had to do that again,” she said, referring to an aggressive campaign she waged against the Sears, Roebuck and Co. board in 1991. “Because people knew we would do that if we had to.”

Engine No. 1 succeeded under a set of unique conditions. First, the firm was started by a former hedge fund manager who used his personal wealth to finance a fight with around a $13 million price tag, according to the fund. It also made a strong case for board change, arguing that the oil giant had lower shareholder yields than competitors and mounting debt and spending that jeopardized its dividend. Exxon was also losing money, and Engine No. 1 argued its resistance to transitioning to a low-carbon future would lead to more losses in the future.

“Exxon was unique in its own way,’’ said Eleazer “Ele’’ Klein, a lawyer who represented Engine No. 1 in its campaign. “It wasn’t responsive to its shareholders’ frustrations.’’

Investors don’t often reject director candidates. So far this year, less than 0.5% of the 15,000 board members in the Russell 3000 failed to get at least 50% of the vote in an uncontested election, where seats are assigned based on vote totals. The three Exxon directors were the only ones ousted this year in a contested election, where board candidates have to receive a majority of votes, according to Bloomberg Intelligence data through June 29.

Pressuring companies to switch up their board, rather than a full-on takeover, may be a more realistic approach. Arjuna Capital, which has had success getting major technology and finance firms to release pay gap statistics, now has proposals at Facebook, Alphabet Inc.’s Google and Twitter to add civil rights experts as directors. “It’s a different existential crisis than Exxon is facing,” Natasha Lamb, a managing partner at Arjuna, said. “But it’s a business imperative.”

Alphabet said in its proxy statement that its current board is sufficiently qualified to provide civil rights oversight. Facebook declined to comment but pointed to a website outlining the company’s efforts to address hate speech on its platforms. Twitter declined to comment.

Activists have made progress making alternative directors more palatable to big investors, said Rusty O’Kelley, an executive recruiter at Russell Reynolds. Five years ago, the typical slate would have included members of the fund or their close associates, he said. Now the groups work with executive recruiters to establish networks of board-ready candidates.

“They are much more likely to have a slate of people who have industry relevance, who represent gender and ethnic diversity and look and feel more credible,” O’Kelley said. “It’s designed to gain support from BlackRock, Vanguard and State Street.”

Activist investors have already this year submitted a record number of proposals aimed at improving diversity and equality in corporate America. Even though many of them failed, support averaged 32%, well above the average 24.2% over the previous five years, according to data from Bloomberg Intelligence. Companies often engage with activists if their proposals get at least 30% of the vote, though they’re under no obligation to do so in most cases.

Some of their biggest targets, however, like Facebook and Alphabet are somewhat insulated from these kinds of campaigns because of their dual-class share structures. Facebook Chief Executive Officer Mark Zuckerberg, for example, has majority control of the social network even though he owns less than 15% of outstanding shares.

Still, some boards are being proactive. A survey this spring by recruiter Spencer Stuart of 77 committee chairs on S&P 500 boards found that expanding or enhancing ESG initiatives is their number one priority over the next three years.

—With assistance from Naomi Nix.

Comments

Popular posts from this blog

New top story from Time: Little Recognition and Less Pay: These Female Healthcare Workers Are Rural India’s First Defense Against COVID-19

https://ift.tt/3mrDgrm Archana Ghugare’s ringtone, a Hindu devotional song, has been the background score of her life since March. By 7 a.m. on a mid-October day, the 41-year-old has already received two calls about suspected COVID-19 cases in Pavnar, her village in the Indian state of Maharashtra. As she gets ready and rushes out the door an hour later, she receives at least four more. “My family jokes that not even Prime Minister Modi gets as many calls as I do,” she says. Ghugare, and nearly a million other Accredited Social Health Activists (ASHAs) assigned to rural villages and small towns across India, are on the front lines of the country’s fight against the coronavirus . Every day, Ghugare goes door to door in search of potential COVID-19 cases, working to get patients tested or to help them find treatment. With 8 million confirmed COVID-19 cases, India has the second-highest tally in the world after the United States and its health infrastructure struggled to co

Sushant Singh Rajput Death Case LIVE Updates: Rhea Chakraborty to undergo CBI interrogation again today https://ift.tt/2ErYXaz

Rhea Chakraborty summoned again by CBI in connection with actor Sushant Singh Rajput's death The Central Bureau of Investigation (CBI) moved one step ahead with the investigation when on Friday, it interrogated Sushant Singh Rajput's girlfriend Rhea Chakraborty, the main accused in the mysterious death of the actor. Rhea reached the DRDO-IAF guest house in the suburbs at 10:30 am along with her brother Showik and was interrogated for 10 long hours. During the interrogation, the actress revealed her side of the story about how she met Sushant and their live-in relationship for the last one year. The actress has been asked to appear again before the CBI. Besides Rhea, her brother Showik, Sushant's flatmate Siddharth Pithani, house manager Samuel Miranda, personal staff Neeraj Singh have also been questioned on Friday.

Just in Time for Bike Month: The Active Communities Plan Interactive Map!

Just in Time for Bike Month: The Active Communities Plan Interactive Map! By Christopher Kidd Image of the new Active Communities Plan (ACP ) interactive map  As part of our ongoing public outreach about the Active Communities Plan , the SFMTA has created a new ACP interactive map .  The release of the map comes just a couple of weeks after we began collecting feedback through our new survey .   The map shows conditions for biking, scooting and rolling across San Francisco, as well as multiple layers of analysis conducted by the Active Communities Plan team. It is meant to help users understand how different factors like comfort, safety and network quality influence whether people decide to use active transportation or not.   We want users to have the opportunity to explore and compare data, reflect on how it compares to their experiences with active transportation and provide input about what kinds of solutions work best.  The interactive map has six main layers to explore: 

New top story from Time: Latest Tests Bring Israel a Step Closer to Commercial Drones

https://ift.tt/3lyZxGe TEL AVIV, Israel — Dozens of drones floated through the skies of Tel Aviv on Monday, ferrying cartons of ice cream and sushi across the city in an experiment that officials hope provided a glimpse of the not-too-distant future. Israel’s National Drone Initiative, a government program, carried out the drill to prepare for a world in which large quantities of commercial deliveries will be made by drones to take pressure off highly congested urban roads. The two-year program aims to apply the capabilities of Israeli drone companies to establish a nationwide network where customers can order goods and have them delivered to pick up spots. [time-brightcove not-tgx=”true”] The project, now in the third of eight stages, is still in its infancy and faces many questions about security and logistics. “We had 700 test flights at the start of this year and now we are close to 9,000 flights,” said Daniella Partem, from Israel Innovation Authority, a partner in th

New top story from Time: Japan’s Prime Minister Abe Reportedly Stepping Down Over Health Concerns

https://ift.tt/32yNoGh (TOKYO) — Japan’s Prime Minister Shinzo Abe has expressed his intention to step down due to his declining health, according to reports Friday by NHK and other Japanese media. The Prime Minister’s Office said the report could not be immediately confirmed, but that Abe was believed to be meeting top ruling officials at the party headquarters. The Liberal Democratic Party spokesman did not answer the phone. Concerns about Abe’s chronic health issues, simmering since earlier this summer, intensified this month when he visited a Tokyo hospital two weeks in a row for unspecified health checkups. Abe, whose term ends in September 2021, is expected to stay on until a new party leader is elected and formally approved by the parliament. He had abruptly resigned from his first stint in office in 2007 due to his health, which was fueling concerns about his recent condition. Abe on Monday became Japan’s longest serving prime minister by consecutive days in of

New top story from Time: The Reopening of Springsteen on Broadway Brought Broadway Out of Hibernation—and One Packed Theater Into a Brighter Future

https://ift.tt/3A6wS0a The city that never sleeps is still a little sleepy, unsure of how to move its joints and muscles as it awakens from its forced hibernation . Although Times Square is now almost as brightly lit as ever, it’s remarkably hard to find a bar that will serve a drink after 11 p.m. On a late-June Saturday night, Eighth Ave. around 42nd Street was vibrating with young people: guys imported from the outer boroughs and beyond in their baggy, rumpled shorts, young women in elastic spangled mini-dresses making their first outing after a year lying in a drawer, men in mardi gras beads and the tiniest of tank tops ready to make the most of the final days of Pride month . Yet it was hard to know exactly what all these people were doing there, other than taking their place in a kind of Brownian-movement minuet under the cheerfully garish lights. Because Times Square cannot be itself while Broadway—meaning not the actual street but the constellation of live shows around

More 20 MPH Streets Coming Soon Near You

More 20 MPH Streets Coming Soon Near You By Christine Osorio Last October when California Assembly Bill 43 (Friedman) was signed into law, we posted a blog about which gave cities new flexibility in setting speed limits—specifically reducing them. “Speed Management,” a reference that is still in development, focused on reducing speed limits in key business activity districts where at least 50% are dining or retail. Since the bill went into effect last month, we’ve already started lowering speed limits by 5 MPH (from 25 MPH to 20 MPH) in the first phase of approved corridors, four of which have been implemented:  San Bruno Avenue, from Silver to Paul avenues (Completed January 2022)  Polk Street, from Filbert to Sutter streets (Completed January 2022)  Haight Street, from Stanyan Street to Central Avenue and from Webster to Steiner streets (Completed February 2022)  24th Street, from Diamond to Chattanooga streets and from Valencia Street to San Bruno Avenue (Completed

New top story from Time: Donald Trump and Trump Biden Square Off for First Debate

https://ift.tt/3kQSmpA President Donald Trump and former Vice President Joe Biden are facing off on the debate stage during one of the most turbulent periods in modern American history. A viral pandemic has killed 200,000 Americans and pummeled the economy, racial justice protests continue in towns and cities, and vast fires wreak environmental disaster across the American West . Adding to the national sense of foreboding, Trump has refused to commit to a peaceful transition of power i f he loses the election and is using his bully pulpit to sow distrust in the voting process and spread false allegations that voting by mail —a safe alternative for many during the pandemic—will lead to rampant voter fraud. ( It won’t.) There’s a lot to debate. While the head-to-head is an opportunity for both candidates to convince Americans that they are the right person to lead the country through this tumultuous time, it’s also a moment for voters to see the two men’s styles set

New top story from Time: Pfizer-BioNTech Have Started Testing Their COVID-19 Vaccine in Children Under 12

https://ift.tt/3vWOQjL Alejandra and Marisol Gerardo are nine years old but already making a little bit of history. The twin sisters are among the first young children to get vaccinated with a COVID-19 shot in Pfizer-BioNTech’s study of its vaccine in kids under age 12. Alejandra and Marisol had their blood drawn in the morning on March 24, then got their first dose of the two-dose vaccine later that afternoon. “Their primary concern was, ‘is it going to hurt,’” says their father, Dr. Charles Gerardo, chief of emergency medicine at Duke University School of Medicine. “They’re not too worried about the long term side effects; they’re looking at the moment, not the future.” Testing the vaccine in younger children will answer critical questions about how much immunity the shots can provide, and potentially give parents and education officials more confidence in re-opening schools. While it appears that younger children don’t get as sick with COVID-19 as older teens and adult

FOX NEWS: Top baby names list for 2021 reveals familiar trends For the second year in a row, these two names are the most popular for girls and boys – leading BabyCenter's Top 100 Baby Names list.

Top baby names list for 2021 reveals familiar trends For the second year in a row, these two names are the most popular for girls and boys – leading BabyCenter's Top 100 Baby Names list. via FOX NEWS https://ift.tt/2ZZEl3u