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December 17, 2003
2003 Proxy Season Roundup: Shareowner Action Success Measured On and Off the Record
    by William Baue

While the 2003 proxy season produced some impressive numbers, shareowner advocates also define success in ways that are not easily quantifiable (Part one of a two-part article.)

The numbers tell an impressive story about the 2003 proxy voting season. A record number of resolutions, more than 1,080, were filed. Resolutions received very high votes. For example, a resolution calling for annual election of directors filed at 38 companies averaged 62.7 percent of the vote, according to the Investor Responsibility Research Center (IRRC), an independent corporate governance and social responsibility research firm. The resoluti on received an astounding 92.89 percent vote at Avon (ticker: AVP), according to the Interfaith Center on Corporate Responsibility (ICCR), an association of 275 faith-based institutional investors who collectively manage over $110 billion in assets.

"We would characterize this past proxy season as very successful," said Sister Pat Wolf, executive director of the ICCR, which tracks more than 100 shareowner resolutions sponsored by its members each year and publicly reports on their progress on its website.

Sr. Wolf noted that higher vote numbers reflect greater shareowner interest and garner more attention from senior managers.

"I think many of the corporations were particularly surprised with the growth of the vote on climate change and energy resolutions," Sr. Wolf told "Topping 20 percent was the big achievement last year; this year, seven of the nine resolutions received 20 percent of the vote, and the other two received over 25 percent."

A resolution asking American Electric Power (AEP) to report on greenhouse gas emissions reductions received 26.9 percent of the vote. A resolution asking ChevronTexaco (CVX) to report on its plans for developing renewable energy sources received 25.06 percent of the vote.

However, success in shareowner advocacy sometimes cannot be measured statistically. For example, ICCR withdrew its resolution on embedded climate risk at ConocoPhillips (COP) and Staples (SPLS) in favor of dialogue with the companies.

"Our dialogue with ConocoPhillips led to a pledge from the CEO to produce a climate change plan," reported Sr. Wolf. "Staples agreed to set greenhouse gas emissions reduction targets, and to join the World Resources Institute Green Power Market Development Group."

Dialogues on other issues result in concrete change as well. ICCR uses the Principles of Global Corporate Responsibility--Bench Marks for Measuring Business Success to work with corporate boards and management to develop human rights codes and business principles. For example, an ICCR dialogue group inspired Ford (F) to adopt a human rights code and a set of business principles focused on corporate social responsibility (CSR), labor rights, and environmental issues such as climate change.

"The cooperative model really produces results," Sr. Wolf said.

Sometimes, stalled dialogues can transform into success stories as well. For example, in 2002 the Calvert Group, one of the largest socially responsible investment (SRI) firms in the US, conducted a full review of the 27 largest domestic companies in the semiconductor industry.

This survey revealed that TriQuint Semiconductor (TQNT) lagged its peers in social and environmental disclosure. At the time, TriQuent had no policy, management system, certification, or voluntary initiatives concerning environmental, health, and safety (EHS) available to shareowners or the public.

"After initial attempts to dialogue with TriQuint, we filed a shareholder resolution in November 2002 asking management to report on TriQuint's EHS performance and management," said Nikki Daruwala, senior social research analyst and shareholder advocacy coordinator at Calvert.

The resolution received 31.5 percent of the vote at TriQuint's May 2003 Annual Meeting.

In December 2003, the company unveiled a new section on its website devoted to EHS issues. The site features an EHS policy, a statement on environmental management, injury and illness rates benchmarked to the industry, airborne emissions figures, information on hazardous waste management, and a statement on risk assessment.

"TriQuint's disclosure of basic environment and worker safety data is a direct result of Calvert's engagement with the company," Ms. Daruwala told

Part two of this two-part article will preview the upcoming proxy season.


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