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February 20, 2004
Fifth Third Bank Shareowners To Decide on Sexual Orientation Non-Discrimination Policy
    by William Baue

In an unusual move, Fifth Third Bank is leaving it up to its shareowners to decide by their proxy vote whether or not the company will adopt a sexual orientation non-discrimination policy.

On corporate proxy ballots, senior management typically recommends a vote against shareowner resolutions. If management or the board of directors did not oppose the measure, they would simply implement it, obviating the need for the resolution. This proxy season, however, Cincinnati-based Fifth Third Bancorp (ticker: FITB) is bucking this trend. Instead of recommending a "no" vote, the company will allow shareowners to determine whether or not to add sexual orientation to its non-discrimination policy.

"We commend Fifth Third for allowing an open vote on this issue and for agreeing to implement the non-discrimination policy change should the majority of shareholders vote for the resolution," said Julie Goodridge, president of Boston-based NorthStar Asset Management, which filed the resolution.

The resolution says that over 60 percent of Fortune 500 companies have adopted written policies prohibiting harassment and discrimination based on sexual orientation, according to Human Rights Campaign, a sexual orientation equal rights advocacy group. Likewise, more than 95 percent of Fortune 100 companies have done so.

The resolution also points out that fourteen states, the District of Columbia and more than 150 cities and counties, including the Ohio cities of Cleveland, Columbus, Toledo and Dayton, have laws prohibiting employment discrimination based on sexual orientation.

"Adding fuel to the fire, Ohio Governor Taft signed a so-called defense of marriage act outlawing same sex marriage just recently," said Ms. Goodridge. "Activists fear that this sweeping new law may be used to deny domestic partner benefits now provided by private companies in Ohio."

In support of the sexual orientation non-discrimination policy, the resolution cites June 2001 Gallup poll findings that 85 percent of respondents favored equal opportunity in employment for gays and lesbians.

Documenting the discrimination, the resolution cites a September 2002 Harris Interactive study that found 41 percent of gay and lesbian workers in the US reported an experience with some form of job discrimination related to sexual orientation.

"We believe that corporations that prohibit discrimination on the basis of sexual orientation have a competitive advantage in recruiting and retaining employees from the widest talent pool," the resolution states.

The issue will be decided at Fifth Third's March 23 annual meeting.

Editor's Note:
On May 7, 2004, Fifth Third revealed in its quarterly filings with the US Securities and Exchange Commission (SEC) that 62.8 percent of its voting shareowners supported the resolution calling for the addition of sexual orientation to its non-discrimination policy. The 40 percent tally announced at the March 23 annual meeting included abstentions; the revised total followed the SEC protocol of excluding abstentions from the count. "The vote at Fifth Third was the highest vote we've seen on a social issue that was not supported by management since 1986 at the height of the anti-apartheid movement in South Africa," said IRRC's Meg Voorhes.


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