Press Release
Socially Responsible Investors Applaud SEC Decision Not To Curtail Shareholder Resolutions, But Strongly Oppose Curbs On Director Nomination Process
CONTACT: Patrick Mitchell
(703) 276-3266
pmitchell@hastingsgroup.com
WASHINGTON, D.C. |
November 28, 2007 |
The following statement was issued today by Social Investment Forum (SIF) Board Chair Tim Smith, who also is senior vice president of Walden Asset Management, and SIF CEO Lisa Woll:
“Socially responsible investors and shareholder advocates applaud the decision by the Securities and Exchange Commission (SEC) not to pursue its controversial process to curtail or even eliminate the right to file shareholder resolutions. Organizations in our ranks helped to organize many of the 34,000 comments the SEC has reported that it received in opposition to limiting shareowner proposals thus stifling shareholder speech. However we note that the Commission has left the door open to such changes in 2008. Thus, we will remain vigilant in safeguarding the rights of American investors.
At the same time, we strongly oppose the SEC decision to limit the rights of shareholders to participate in the nomination of directors. We join with those investors who urge the Commission to reconsider immediately this anti-investor decision. Nominating Directors for a vote is a basic shareowner right that deserves respect – not intrusive government limits that harm shareholders.
Most U.S. investors, when polled, believe that the SEC should be further opening up corporate boardrooms, rather than shielding them from the scrutiny and feedback legitimately offered by the investors who are stakeholders in these publicly owned companies.
The SEC made the right decision today in not abridging the ability of shareholders to sponsor proxy resolutions. We urge the Commission to reverse itself on the director nomination process question.”
BACKGROUND
On August 29, 2007, SIF and ICCR launched the http://www.SaveShareholderRights.org Web site, which facilitated the submission of roughly 9,000 total investor emails (as of 5 p.m. EDT on October 5, 2007) to the Securities and Exchange Commission and Congress in opposition to the shareholder curbs now under discussion at the SEC.
Socially responsible and religious investors first indicated on July 24, 2007 that they would oppose any SEC rollback of shareholder rights – one day before the Commission put out for comment two proposals that would open the door to a substantial weakening of shareholder rights in the proxy process and in the selection of board members.
With only a tiny handful of comments on the public record supporting the controversial proposals, the overwhelming expression of opposition paralleled national opinion survey findings released on September 25, 2007 by nine leading investment companies and religious institutional organizations. That scientific survey found that only about a third or less of U.S. investors support any of the five potential approaches outlined by the SEC to curb the rights of shareholders to file shareholder resolutions and participate in the process of selecting members of corporate boards. The September 25, 2007 survey of U.S. investors was sponsored by Calvert Group Ltd., Pax World Management Corp., Trillium Asset Management Corporation, SIF, ICCR, Boston Common Asset Management, First Affirmative Financial Network, Marianists Province of the United States, and Green Century Capital Management. For full findings from the survey of 1,133 U.S. investors, go to http://www.saveshareholderrights.org/092507release.cfm on the Web.
This is not the first time that socially responsible and religious investors have challenged a potential SEC curb on the voice of shareholders. The current campaign by concerns investors surpassed by a significant margin the outcry that ensued in 1997-1998 when more than 300 socially responsible investing, religious, labor and other groups coalesced to oppose an earlier SEC staff plan to gut the shareholder resolution process. The groups prevailed in that fight in which the SEC was forced to withdraw its widely criticized proposal.
ABOUT THE GROUPS
The Social Investment Forum (http://www.socialinvest.org) is the national membership association for the social investment industry. It is dedicated to the concept, practice, and growth of socially responsible investing. The Forum's 500-plus members include financial planners, banks, mutual fund companies, research companies, foundations, and community investing institutions.