Tag Archives: social investment

Bank of America Shareholder Meeting – A Failure

The Bank of America Board of Directors was on the defensive yesterday. There were protestors gathered outside the annual general meeting; security was high; inside, the mood was testy. In his opening remarks, Chairman of the Board Chad Holliday flubbed an announcement about question and answer time, prompting a shareholder to interrupt the preliminaries; and when Q & A on shareholder resolutions began in earnest, CEO Brian Moynihan stuck to terse, one-sentence, boilerplate answers to most questions, until one stockholder stood up and asked for “more nuance and explanation” and “a more thoughtful response” to the owners’ questions. General applause ensued, but the dialogue did not really improve. In that respect, the meeting felt like a lost opportunity: the Board simply refused to engage.

There were six shareholder resolutions but (as the Q & A revealed) really just three big issues on shareholders’ minds: executive compensation, predatory mortgage and lending practices, and political contributions.

One shareholder seemed to sum up the feelings of many in the room when he said that “it’s a comedy” to be a Bank of America shareholder, given the gap between the stock’s performance and the compensation of its executives. Several people directly asked Brian Moynihan to forgo (or, as one shareholder put it, “deny”) his raise for the coming year. This came to a head in an exchange with one shareholder, who said that the issue really came down to where Moynihan’s “heart” is. “Do you love your neighbor as yourself? Are you going to turn down your raise?” Like a boy at his catechism, Moynihan parsed the question and said that he had been raised to love his neighbor as he loves himself (how could he say otherwise?), but when it comes to turning down his raise the answer is simply “no”; and then he repeated a few prepared phrases about how his own compensation is “aligned” with the Bank’s strategic goals. That was his gospel.

Still, shareholders urged the bank to consider the “injustice” in the world, and Bank of America’s part in it. Activist shareholder Dawn Dannenbring (whose appearance at a JP Morgan shareholder meeting I blogged about here) asked the Board to think about why they need to have heightened security at their shareholder meetings: “If you were a better corporate neighbor,” she remarked, “you wouldn’t have to be so scared.” To charges that it had “decimated” the communities where it did business, the Bank responded with a bland assertion: “the success of communities is equal to our success”; at one point Moynihan even muttered the phrase “good for America,” but it sounded as if he had never really warmed to that talking point, and his voice trailed off.

Some tried to appeal to the bank’s business sense: if Bank of America is seen “not as part of the solution but as causing the problem,” it runs a “reputational risk.” That’s putting it mildly. Others were not so restrained: “You’ve got to stop foreclosing on families,” exclaimed one shareholder; and a number of people rose during the Q & A and told their own stories about how the bank – their bank – had ruined them. Moynihan was patient and even compassionate with these share-owning customers, and told them they could talk to a B of A “teammate” on the spot, that very day, about their problems. But the crowd was repeatedly reminded that these individual cases – their own cases or the cases of family and friends – did not bear on the proposals they had assembled to vote on. This was a myopic response at best, as if behind each of these proposals there were not thousands, hundreds of thousands, millions of individual stories that need to be told, and that make up the big picture of the bank’s role in America.

While the bank is reluctant to open a dialogue on its role in society, it is aggressive in its bid for political power and social influence. And in the wake of Citizens United, the battle lines around political spending are being drawn. A proposal to prohibit all political spending from the corporate treasury – which I wrote about in a previous post — received just 4 percent of the vote, but the resolution still counts as an important first step. Another political spending proposal, requiring Bank of America to disclose all grassroots lobbying, fared much better, garnering about 30 percent of the vote (right around the 32.73 percent it gained last year).

Calls for disclosure of political spending are getting harder to ignore. And though prohibitions and other checks on spending still face an uphill battle, the resolution to stop political spending at least gave shareholders a chance to say a few words about the risks and uncertain outcomes of profligate political spending. Shareholders cited research (by Hadani and others) to support their position; but it is hard to say whether this made any impression whatsoever on the Board. If so, they weren’t going to let it show. They just seemed to want to get the whole thing over with. They had not come to deliberate, or listen or learn. They had come to defend. And that is why the 2012 Bank of America shareholders’ annual meeting should be reckoned a failure.

Can CEOs Ever Get The Political Fix They Need?

There have recently been plenty of shareholder proposals asking companies to disclose political spending. In fact (as noted in an earlier post), the share of proposals to the Fortune 100 focusing on political spending increased 84 percent in 2011 from the three previous years. Last week, to mark the second anniversary of the Citizens United decision (on January 17th), Trillium Asset Management and Green Century Funds took things up a notch.

Urging “corporate leaders to heed the call of shareholders and citizens,” the two social investment firms filed shareholder resolutions at Bank of America, 3M, and Target Corporation asking those companies to stop political spending altogether. This was the first time institutional shareholders have formally asked corporations to refrain from political spending.

The chances of these resolutions winning approval are slim to none, of course – at least right now. The hope is that over time support will build around these proposals, until they reach a threshold where boards of directors can no longer ignore them. (That’s around 30 percent of shareholder approval.) That day seems a long way off. Still, a slim chance is better than no chance, and — let’s face it — there is simply no chance of legislative remedies to Citizens United, especially from the current Congress, and definitely not in an election year.

“We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward,” David Stockman tells Bill Moyers in an interview that will air this weekend. “As a result,” Stockman says, “we have neither capitalism nor democracy. We have crony capitalism.”

That sounds about right, though I would ask whether Stockman and others who take this view have really put their finger on what’s novel or unique about the present moment. Entitlement and cronyism are not exactly new in America; some would say the game has been rigged all along.

But that’s a historical discussion. The more pressing question is one these new shareholder resolutions would have us address. Is corporate political activity good for business? Is the corporate plan to capture government sound? Are corporations really getting what they pay for? Can those entitled CEOs and Wall St. financiers win the game, or are there rules to the game they don’t understand? In other words, how well does crony capitalism work? Those broad questions frame the question posed in the title of this post.

There’s some compelling evidence to suggest that corporate political activity is not only bad for democracy but also bad for business. The Trillium and Green Century announcements cite the research of Michael Hadani, who sets out to “question the standard narrative that political spending is an unmitigated good for firms.” Hadani, a Professor of Management at Long Island University, concludes that despite spending extravagant amounts of money – AT&T, for instance, “officially” spent over 219 million dollars between 1998 and 2008 “on achieving political success” (and that was before Citizens United!) — corporations are not achieving the political outcomes they want.

What’s worse, corporate political activity generally does not appear to increase shareholder value.

This chart tracks a negative correlation between firm market value and PAC activity:


And that is just one lens. The research Hadani presents tells a pretty consistent story: the profligate pursuit of illusory goods, usually without the requirement to disclose where the money goes, or what companies and their investor-owners get for it (apart from heightened risk and reduced transparency). It should therefore alarm all shareholders – not just socially-conscious ones — that Citizens United makes it possible for executives to plunder the corporate treasury in pursuit of those same uncertain ends, without any limits or any real accountability. A new kind of barbarian may already be inside the gates: the CEO in search of the ever-elusive political fix.

On the Heroics at Home Depot

A video making the rounds on YouTube and on progressive blogs features the American Family Association’s Buddy Smith telling the story of his run-in with Home Depot Chairman and CEO Fred Blake at the annual shareholders meeting on June 2nd.

Smith, whose organization also runs a site called BoycottTheHomeDepot.com, came to the shareholders meeting to present a petition asking Blake to “stop sponsoring gay pride parades and making direct contributions to gay activist organizations.” “A corporate company like Home Depot,” he complains, “is just not being a good citizen,” because they are “spreading the word” about a “lifestyle that is just a trap of Satan.” Good corporate citizenship, in Smith’s view, requires “standing for God’s truth” out of “love” for “our neighbors.”

How’s that for a theory of corporate social responsibility?

To Smith’s dismay, Fred Blake wasn’t having any of it. The Home Depot CEO responded “very briefly” to Smith. Blake went on, in Smith’s account, to say that he “was very proud of Home Depot’s diversity”; and the CEO “made a recommitment just to continue down the very track that they’re going.” So Blake sent Smith packing.

Whether this showed “some real backbone,” as blogger Cory Doctorow puts it, is up for debate: how much courage does it take to dismiss a crazy old coot like Smith, or double down on diversity policies for which there is a strong business case? Discrimination unnecessarily limits the labor pool and risks offending potential customers.

If the buzz on Twitter is any indication, the issue seems settled; and Blake is a champion of diversity and a model of socially responsible corporate leadership. Most people were retweeting @RightWingWatch’s tweet: “AFA brings boycott to Home Depot board meeting & CEO tells AFA to take a hike, reiterates commitment to diversity.” One poster, a Lady Gaga fan, called Blake “bad ass”; others said they now preferred Home Depot to its competitor, Lowes. @biggkhalil took up AFA’s theme of corporate citizenship: “Dear AFA, Home Depot is a great citizen. I pledge to continue shopping there. You people are pathetic.” Yet another poster thanked the company “for standing up for equality! Let’s send a Village People construction worker with a gift basket!” Others used more colorful language to denounce Smith and praise Blake.

Everybody agrees Blake made the right call; nobody seems too concerned that he made an easy call. I guess people like to see these holy-rollers get their comeuppance. But it’s worth noting that there was another item on the agenda at the Home Depot meeting that deserves more attention than Blake’s rebuff of Smith. It has to do not with Home Depot policy but Home Depot politics – specifically with the money Home Depot gives through its PAC to candidates and their refusal to give shareholders a say in how that money gets spent.

It turns out some of the company’s spending doesn’t jive with their much-celebrated commitment to diversity. As Andy Kroll reports in Mother Jones:

in 2006, the PAC donated $1,000 to Kansas Republican Sam Brownback, now the state’s governor and a supporter of a constitutional amendment banning same-sex marriage, and gave $10,000 to help Bob McDonnell’s gubernatorial campaign in Virginia. McDonnell is a staunch opponent of workplace protections for LGBT state employees.

Arguing that Blake and his executive team at Home Depot “were giving to candidates who were actively rolling back the rights of GLBT people in the states in which they did business” and that this put the company’s reputation at risk, Julie Goodridge and Northstar Management brought a resolution to give shareholders an advisory vote on corporate political spending.

I’ve written about this resolution in a previous post. It is at best a first step, but it’s a step in the right direction. Some people believe that requiring full disclosure and giving investors a say may help check corporate political spending in the wake of the Citizens United ruling.

That’s the hope. In fact, CEO Fred Blake and the Home Depot management team opposed the Northstar resolution from the very start. It gained a place on the annual meeting agenda only after an SEC ruling required the company to include it. And at the June 2nd shareholders meeting, the resolution (not surprisingly) went down in defeat.

Fred Blake has promised to announce the final tally soon. It would be a sign of real courage, or at least consistency, if he took the occasion to distance himself and his company from the bigotry of Brownback, McDonnell and their ilk.

From Zero to 32.73 at Bank of America

First, a correction. In my last post about the 2011 proxy season, I wrote that shareholder resolutions requiring disclosure of grassroots political spending brought by AFSCME to Prudential and Bank of America had met with zero support. That is incorrect.

ProxyMonitor reported the zero vote tally because the votes had not yet been cast. The two AFSCME proposals regarding grassroots lobbying were listed on ProxyMonitor with other, fully tallied 2011 results, including one AFSCME proposal to IBM that received nearly 30 percent support; and I wrongly assumed that that meant the Prudential and BofA proposals had already been voted on. Instead, ProxyMonitor included them simply to show – I guess — that they had been filed and were on the docket. At the time I wrote my last post, zero results had been reported, because the shareholder meetings hadn’t yet been held.

Serves me right for relying solely on the numbers in the “Votes” column on the database. Common sense would dictate that with AFSCME in the room a tally of zero would have been unlikely, unless (as I thought) some agreement to table the proposal had been reached before the meeting; and I should have checked the reported data against other news stories and the companies’ own sites. It’s a little odd that ProxyMonitor indicates a pending vote by reporting a tally of zero, and I’ve written to the Manhattan Institute asking about this point. But now I understand that the ProxyMonitor database is not strictly historical, and that should be taken into account when looking at emerging trends or patterns in 2011.

In any case, votes on those resolutions have now been cast, and the site has been updated with the results.

The proposal to Prudential won a modest 8.03 percent of the vote — no big surprise there.

The proposal to Bank of America – which held its shareholder meeting on Wednesday of last week, amid protests over its mortgage and foreclosure practices — was another matter altogether. 32.73 percent of BofA shareholders voted in favor of grassroots lobbying disclosures. That is well past the conservative 30 percent threshold set by Ernst & Young. BofA’s board of directors can’t put off this issue much longer.

This outcome is in keeping with the trend toward political disclosure I’ve discussed previously, with shareholders pressuring companies to report on where they spend their lobbying dollars, and lobbying now considered part of a company’s risk profile. The question is what Bank of America’s board will do about it: will they show leadership, or try to hide out for another year?

It’s unlikely they will do all that the proposal requires. AFSCME asked Bank of America to provide an annually updated report disclosing 1) policies around lobbying contributions and expenditures; 2) payments, “both direct and indirect, including payments to trade associations, used for direct lobbying and grassroots communications.” The kicker was a third request, requiring the bank 3) to identify — for each payment — the person who decided to make the lobbying expenditure and those who participated in the decision to make payments to grassroots lobbying campaigns. Now that sounds like accountability.

John Keenan, the champion of the proposal and a strategic analyst for AFSCME, seems braced for a long tough slog. “We have concerns over our company’s sincerity when it comes to commitment to transparency and accountability,” he said in his remarks at the shareholders’ meeting [Keenan’s remarks start at around 1:29 in this webcast]. Keenan noted that “last year, BofA agreed to disclose its political contributions on its website, including accounting for political contributions made by the Bank’s PACs,” but the reporting was so “anemic” that the “company and the board should be embarrassed by this weak effort.” The bank pointed interested parties to a federal database and left them to figure it out for themselves.

And though Keenan and others were able to determine that BofA “spent about 7.4 million in 2009 and in 2010 on Federal lobbying activities,” he noted “incomplete disclosure at the state level as state lobbying disclosure is not comprehensively required by law.” Keenan and his colleagues were able only to paint a “partial picture,” which showed BofA spending “more than 2.3 million” in 17 states. As for the rest? Even Bank of America itself may not have the whole picture.

It gets murkier. As I noted in a previous post, the area where it is most difficult to document these expenditures is in contributions to industry trade associations. Keenan cited an April 23, 2011 article in the LA Times documenting “a parallel, opaque system of political giving” in which the leading, politically active trade associations – the U.S. Chamber of Commerce chief among them – “took in more than $1.3 billion, more than the state of Vermont collected in taxes. These groups, in turn, spent some $500 million on lobbying and other political activity such as television advertising.”

How deep this goes is anybody’s guess. The LA Times report found that “substantial corporate political spending remains in the dark, leading to an incomplete, and at times misleading, picture of companies’ efforts to influence legislation and elections.” Keenan began to make the same point at the BofA shareholders’ meeting, but a testy and “impatient” CEO Brian Moynihan interrupted him repeatedly, told Keenan that his time was up, and then, finally, just cut him off.

In the wake of Citizens United, Keenan and others like him are trying to do what Congress has so far failed to do. We probably should not expect the appointed guardians of our republic to step up anytime soon. The news in mid-April that President Obama had drafted an executive order requiring disclosure of political spending — including contributions to third parties — from companies contracting with the federal government met with immediate denunciations from Republicans, who complained about Orwellian oversight and muttered things about the First Amendment. They did not offer a better proposal. Nor did the Democrats. In fact, just last week, The Hill reported, a growing number of Democrats repeated the Republican criticisms of the President’s executive order, and urged the administration to drop the plan, for fear that it might “politicize” the Federal contracting process.

To keep politics out of business, they oppose any measure to keep business out of politics.

2011 Proxy Season: Social Investment at the Threshold

Ernst & Young estimates in a new publication [pdf] that half of all shareholder proposals in 2011 will deal with environmental and social issues, and support for these proposals is growing. In fact, “83 percent of investors now believe environmental and social factors can have a significant impact on shareholder value over the long term.”

Last year, E & Y finds, approximately one quarter such social investment proposals won 30 percent support –which E & Y calls a “threshold” number, where “many boards take note.”

Perhaps they’d better. Typically, when proposals reach a second threshold — garnering 50 percent support– directors who oppose them start losing their seats.

Things may not yet have reached a tipping point, but these are promising developments. With the enactment of Dodd-Frank in 2010, mandatory say on pay provisions became law; that means fewer executive compensation proposals are on the table, and it’s easier to introduce social issues into the conversation.

There are even some early indications of the trend toward social investment in the 2011 data reported so far on ProxyMonitor.org. (ProxyMonitor – the Manhattan Institute database I relied on in a previous post about why boards say they don’t back human rights proposals — is keeping a “scorecard” of the 2011 proxy season.)

Now the ProxyMonitor data is special, and there might be reason to expect it to tell a unique story. ProxyMonitor documents only proposals made to Fortune 100 companies. Can we reasonably expect Fortune 100 shareholders to set the trend or lead in the area of social investment? On the one hand, investors in the Fortune 100 might tend to be more conservative –and risk averse — than the average shareholder. On the other, these high-visibility public companies with strong brands are likely to attract activist investors and funds with a social agenda. The likely outcome is more proposals, less traction.

Be that as it may, so far, a clear majority of shareholder proposals made to Fortune 100 companies in 2011 target social investment issues.

And there is another encouraging trend here. More and more shareholder proposals ask boards of directors to report on corporate political spending and contributions. The Findings page on ProxyMonitor notes that among Fortune 100 companies, “the share of social policy proposals focusing on political spending has increased 84 percent in 2011 from the three previous years (2008-2010)” [emphasis mine].

A few examples give some sense of where things are heading. Two proposals requiring Valero Energy Corporation to report on its political contributions received 26 and 27 percent support, edging closer to the 30 percent threshold of boardroom visibility. A proposal by AFSCME asked IBM to disclose “direct and indirect spending to influence legislation as well as grassroots lobbying communications to influence legislation”; it received 28.5 percent support in the 2011 vote. It will be hard for the IBM board to ignore or resist this much longer.

All is not sunshine. It’s worth noting that when AFSCME advanced similar proposals with Prudential and Bank of America, both proposals met with zero support. [Update 5/16/11: this is incorrect. Please see this post.] Prudential made the case that the information is already available; Bank of America complained that it would be burdensome and redundant, and, besides, “our company does not engage in grassroots lobbying.”

Make of that statement what you will. It’s clear that forcing disclosure of so-called “indirect” and “grassroots” spending will be an uphill battle, in part because it is difficult to define or track grassroots spending, or distinguish it from legitimate trade association activity.

But the focus now on corporate political spending brings welcome relief. As I suggested in an earlier post, some social investors are trying to do what Congress is unable or too cowardly or too compromised to do: take back some of the ground that was lost or – as I prefer to put it – given away by the courts in Citizens United. The boldest of these proposals, requiring Home Depot not only to disclose its political expenditures, but also to submit those expenditures to a shareholder advisory vote, will come to a vote on June 2nd. Maybe this measure will make it past the threshold.

Citizen Investors and Citizens United

Home Depot’s Spring 2011 proxy report will include a proposal seeking shareholders’ say on political spending done by the corporation. This proposal is the first of its kind. Chances are it will not be the last.

If shareholders approve the resolution, where and how Home Depot funnels money into the political process and influences elections will be subject to shareholder approval.

Home Depot did not exactly welcome this development. According to documents filed with the SEC[pdf], the company resisted the proposal, arguing that such a resolution would impinge upon and restrict “ordinary business of the company.”

More specifically, Home Depot took three legal tacks, all involving various clauses of SEC rule 14a-8, governing proposals of security holders. First, they invoked SEC rule 14a-8(i)(3), “that the proposal is [too] inherently vague or indefinite…to determine with any reasonable certainty exactly what actions or measures the proposal requires.” Second, they tried rule 14a-8(i)(7), that the proposal seeks “to micromanage the company.” Last, they tried invoking rule 14a-8(i)(10), “that Home Depot has substantially implemented the proposal.”

These are hardly original arguments – we don’t know what you’re asking, you’re trying to tie our hands, we’re already doing this — and they did not carry the day. Writing on behalf of the SEC, Attorney Bryan J. Pitko found all three arguments to be without merit.

“In ruling in favor of allowing the proposal,” writes Sanford Lewis, an attorney who defended the proposal on behalf of Northstar Asset Management, “the [SEC] has essentially determined that after Citizens United, corporate political spending is a significant social policy issue and shareholders can seek to have input on management’s decisions.”

How this will all turn out remains uncertain. As Lewis admits, “a majority of institutional investors typically support whatever the management of a company thinks is appropriate.” But in the absence of any new law restraining corporate speech, “citizen investors” like those Lewis represents may be able take back some of the ground that was lost – or given away by the courts — in Citizens United.

3 Big Reasons Why Boards (Say They) Don’t Back Human Rights Proposals

Last week the Manhattan Institute launched ProxyMonitor, a site tracking shareholder proposals submitted to publicly traded companies via the annual proxy process. Right now, the site is limited to proposals made to Fortune 100 companies. Data goes back three years, to 2008. The site already offers some great features, including links to SEC filings around each proposal as well as the ability to filter and sort search results and export them to Excel.

People who have read my blog posts about business and society won’t be surprised that I went immediately to the “Social Policy” filter, which turns up 266 results.

Of these, thirty are human rights proposals made to the boards of twenty-one corporations: Abbot Laboratories, Archer Daniels Midland, Bank of America, Boeing, Caterpillar, Chevron, Cisco, Citigroup, Coca-Cola, E. I. du Pont de Nemours, Google, Honeywell International, IBM, JPMorgan Chase, Microsoft, Morgan Stanley, Motorola, News Corp, Philip Morris, United Technologies and Wells Fargo.

I’ve been sorting through those 30 proxy proposals, to see what they say about the way shareholder proponents and Boards of Directors deal with proposals around human rights.

It’s a fairly narrow range of investors putting forward these resolutions, and I wonder if this limits their chances of success. Proponents include churches and religious orders — the Sisters of Charity of St. Elizabeth, the Domestic and Foreign Mission of the Episcopal Church, the Province of St. Joseph of the Capuchin Order and the Presbyterian Church — as well as socially responsible investment funds: Christian Brothers Investment Services (who invest for Catholic institutions) and New Covenant (dedicated to advancing the Presbyterian mission through investment) along with independent, socially conscious investment firm Trillium Asset Management. Among the thirty proposals is one from Amnesty International; a handful of individual investors submit their own proposals. So far, no big surprises. The only standout entry in the list of human rights proponents is the New York City Comptroller’s Office, shareholders in Archer Daniels Midland.

It’s no surprise, either, that shareholder support for these proposals is usually weak, ranging from around 3-8 percent. There are a few notable exceptions. The NYC Comptroller’s Office proposal to ADM — requesting “that the company commit itself to the implementation of a code of conduct based on…ILO human rights standards and United Nations’ Norms…by its international suppliers and in its own international production facilities” — garnered 20 percent and 25 percent of the vote in 2008 and 2009 respectively. A 2010 proposal would have required Caterpillar to “review and amend, where applicable, Caterpillar’s policies related to human rights” and to post “a summary of this review…on Caterpillar’s website by October 2010”; that gained 20 percent support. And a proposal put forward by Chevron shareholders — that the Board “adopt a comprehensive, transparent, verifiable human rights policy and report to shareholders on the plan for implementation by October 2008” – won almost 28 percent support.

Why these proposals fared so much better than others is a question for another day. Why they didn’t ultimately succeed merits discussion as well. Despite impressive levels of support, they met with the same objections as all the other human rights resolutions in the ProxyMonitor database.

Why do Boards of Directors oppose these resolutions and recommend that shareholders vote against them? Or, at least, why do they say they can’t get behind human rights resolutions? What reasons do they offer?

Board opposition falls roughly into three categories.

First, the proposals are opposed because they are restrictive. The argument here is that the proposal would limit the company’s autonomy and blanket policies will hamper the company’s ability to operate. As JPMorgan Chase notes in its response to a 2008 human rights proposal, these matters are “complex” and “fact-specific,” so they need to be taken on a case-by-case basis. Good judgment deals in particulars, without having to check each call against abstract measures; and since “opportunities for engagement” on these issues “vary greatly,” blanket policies might prevent the company from responding to a particular case in an appropriate way; and they might also hinder the company from pursuing “objectives and policies” they are charged with.

Second, they are opposed because they are burdensome. Putting human rights proposals into practice can be expensive, and it can place other burdens on company resources. Some companies make it sound as if they would simply be overwhelmed. This argument is taken to an absurd extreme by Wells Fargo in a 2008 filing.

Proponents were moved by the example of Sudan to put forward a resolution to “authorize and prepare a report to shareowners which discusses how our investment policies address or could address human rights issues.” The report was to specify “appropriate policies and procedures to apply when a company in which we are invested, or its subsidiaries or affiliates, is identified as contributing to human rights violations through their businesses or operations in a country with a clear pattern of mass atrocities or genocide.” Wells Fargo took refuge in its position as “a diversified financial services company”:

we invest on behalf of clients and customers in thousands of domestic and foreign companies, many with complex and far-reaching global operations. The effort required to screen thousands of individual companies, as the Proponents would seem to advocate, would be a task of tremendous scope requiring in-depth research and detailed evaluations of the nature and extent of each company’s global operations. We simply do not have appropriate resources or access to adequate and accurate information to make informed judgments on these complex issues.

So the argument that won the day came down to this: Wells Fargo can’t really track its own investments. The world is just too complex. Unable to do the research required to clarify its positions in “thousands of individual companies” and to make “informed judgments,” Wells Fargo simply can’t account for all the places it puts its clients’ money. This is not exactly reassuring. Still, the argument seems to have served its intended purpose. The proposal only received 6.81 percent support.

The third and by far the most common objection to human rights proposals is simply that the resolution is unnecessary or redundant. We see this argument made again and again in the SEC filings: the company already has a human rights framework or a code of conduct in place; the proposal, as one Chevron filing says, would “merely duplicate…current efforts” – an “unnecessary and inefficient use” of company resources.

Chevron has The Chevron Way. Caterpillar has its Worldwide Code of Conduct. ADM “believes that our company’s Business Code of Conduct and Ethics and our existing business practices address the substantive areas covered by the proposal.” Coke and Motorola say that when it comes to human rights, they already have it covered. Microsoft “continues to take steps we believe are appropriate” in the area of human rights and requires no additional prodding or cajoling. Citigroup has “implemented best practices regarding human rights,” so “a report concerning the company’s investment policies with respect to human rights issues would provide no meaningful benefit” to shareholders.

So much for scrutiny. In nearly every response to human rights resolutions, we are asked to believe that the company’s good faith, code of conduct and current efforts will be sufficient. Over and over again, companies assert against human rights proponents that they are perfectly capable of monitoring themselves and governing their own behavior. They have already incorporated existing human rights frameworks, such as the non-binding UN/Ruggie framework, into their deliberations, or developed their own codes of conduct with reference to those frameworks. Additional human rights reporting would be meaningless and probably just interfere with business operations. What could a report possibly turn up, these companies ask, that we ourselves have not already seen?

Call it arrogance, but these Fortune 100 companies are now confidently asserting their own human rights competence. They refuse to be held accountable because in their own estimation they are already socially responsible.