Shareholder resolution


Shareholder resolution

Shareholder resolutions are proposals submitted by stockholders for a vote at the company's annual meeting. Typically, resolutions are opposed by the corporation's management, hence the insistence for a vote. For publicly-held corporations in the United States, the submission and handling of resolutions is regulated by the Securities and Exchange Commission (SEC). A shareholder resolution to protest napalm manufacturer Dow Chemical resulted in a landmark 1970 U.S. Court of Appeals decision to prod the SEC toward facilitating shareholder resolutions.

Shareholders submit resolutions dealing primarily with corporate governance, such as executive compensation, or corporate social responsibility issues, such as global warming, labor relations, tobacco smoking, and human rights. [cite web|url=http://money.cnn.com/2006/04/25/magazines/fortune/pluggedin_fortune/|title=FORTUNE Magazine: Corporate America backs gay rights|accessdate=2008-03-09]

Virtually all shareholder resolutions are non-binding (or "precatory," to use the legal term of art). [Monks, Robert A. and Nell Minow. "Corporate Governance". Blackwell Publishers, 2001.] In this sense the voting on these resolutions more closely resembles a poll than it does a (binding) referendum or plebiscite. Still, media coverage of voting on shareholder resolutions tends to focus on whether the proposal received a majority of votes, which occurs in a very small but increasing proportion of cases. According to SEC rules, defeated resolutions may be resubmitted only if they pass certain election hurdles (percentage of affirmative votes).

Shareholder resolutions have been an important part of activist campaigns in several cases. For example, resolutions were effective at raising public awareness and thereby pressuring corporate management about investments in apartheid South Africa, nuclear power, and labor disputes. Given these results, resolutions have been spearheaded by several coordinating groups, including the AFL-CIO and the Interfaith Center on Corporate Responsibility. Governmental and labor union pension funds also have become involved in supporting and submitting shareholder resolutions.

References

ources

*AFL-CIO. "How to File a Shareholder Resolution" [http://www.aflcio.org/corporatewatch/paywatch/what2do/w_howshare.cfm]
*Gartman, Grant A. "The IRRC handbook on proxy voting duties and guideline development". 1999
*Gray, Hillel. "New Directions in the Investment and Control of Pension Funds". DC: Investor Responsibility Research Center, 1983.
*"Medical Committee for Human Rights v. SEC" 432 F.2d 639 (DC Cir. 1970, cert. granted) 401 US 973 (1971)
*SEC "Shareholder Proposals" Staff Legal Bulletin No. 14B, September 15, 2004 [http://www.sec.gov/interps/legal/cfslb14b.htm]
*"Shareholder Activism" IRRC
*Simon, Powers and Gunnemann. "The Ethical Investor" Yale Univ. Press
*Voorhes, Meg. "The Rising Tide of Shareholder Activism" DC: IRRC, 2005


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • shareholder resolution — n: a formal resolution by shareholders ratifying or requesting a specified action by a corporate board Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • resolution — A document that records a decision or action by a Board of Directors, or a bond resolution by a government entity authorizing a bond issue. Bloomberg Financial Dictionary * * * resolution res‧o‧lu‧tion [ˌrezəˈluːʆn] noun 1. [countable] an… …   Financial and business terms

  • resolution — noun 1 formal decision taken after a vote ADJECTIVE ▪ draft ▪ formal ▪ proposed ▪ joint ▪ a joint US British resolution …   Collocations dictionary

  • Conflict Resolution (The Office) — Conflict Resolution The Office episode Michael attempts to better perform Conflict Resolution than Toby …   Wikipedia

  • Ordinary resolution — In business or commercial law in certain common law jurisdictions, an ordinary resolution is a resolution passed by the shareholders of a company by a simple or bare majority (for example more than 50% of the vote) either at a convened meeting of …   Wikipedia

  • Criticism of Coca-Cola — The Coca Cola Company, its subsidiaries and products have been subject to sustained criticism by both consumer groups and watchdogs, particularly since the early 2000s. Allegations against the company are varied and criticism has been based… …   Wikipedia

  • Jewish Voice for Peace — (JVP) (קול יהודי לשלום Kol Yehudi la Shalom) is a United States Jewish organization which describes itself as a diverse and democratic community of activists inspired by Jewish tradition to work together for peace, social justice, and human… …   Wikipedia

  • Fossil-fuel phase-out — A fossil fuel phase out are plans for transport electrification, decommissioning of operating fossil fuel fired power plants and prevention of the construction of new fossil fuel fired power stations. The purpose of this is to decrease the high… …   Wikipedia

  • Farm Labor Organizing Committee — Infobox Union name= FLOC full name= Farm Labor Organizing Committee founded= 1967 country= United States office= Toledo, Ohio people= website= [http://www.floc.com/ www.floc.com] affiliation= AFL CIO members= 23,300 native name= current= head=… …   Wikipedia

  • Cook v Deeks — Court Privy Council Date decided 23 February 1916 Citation(s) [1916] 1 AC 554 Judge(s) sitting …   Wikipedia