Boardroom battles: Shareholders, companies scuffle over activism stances

Shareholders are increasingly requesting that companies take a stance on environmental and social issues, The Wall Street Journal reported May 23. 

Proposals questioning companies' stances on such issues increased to 74 for annual meetings held before May 31, up from 43 last year, according to data from ISS Corporate Solutions. 

The pressures come from advocacy groups and shareholders on both sides of the political aisle. Eli Lilly was asked to report on the risks of supporting abortion after openly opposing Indiana's abortion ban last year; Mastercard was asked to address gun violence by implementing separate tracking merchant codes for gun stores. 

As proxy season wears on, companies can no longer avoid these "partisan fights," Heidi Welsh, executive director of the Sustainable Investments Institute, told the Journal

Hospitals and health systems are also susceptible to shareholder pressures. Corporate shareholders recently asked Nashville, Tenn.-based HCA Healthcare and Dallas-based Tenet Healthcare to clarify their stances on emergency abortions — particularly for their physicians practicing in states with strict abortion laws. 

Not all proposals pertain directly to the company's mission, however, which some leaders worry will divert attention from governance and long-term success. 

"They're in the business of doing business. Most companies would probably rather stay out of the political discourse," Michael Littenberg, a partner at law firm Ropes & Gray who advises companies on environmental, social and governance issues, told the Journal. "There's an increasing amount of proposal fatigue. The more proposals that companies get, the more proposals they have to spend time thinking about at the board level."

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