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June 15, 2012
Shareowners Vote on Resolution Asking Target to Refrain from Political Spending
    by Robert Kropp

Filed in the aftermath of a 2010 consumer boycott over a political donation by the retailer, the resolution wins enough support to reappear on next year's proxy ballot.

The US Supreme Court was scheduled to decide in private conference yesterday whether it will revisit its controversial 2010 decision in the Citizens United case. The Court has temporarily blocked a Montana Supreme Court decision that reinstated the state's century-old prohibition against political expenditures by corporations to support or oppose candidates for public office, and was to decide whether to hear the case during this year's session.

The New York Times reported this week that the Court's agreeing to hear the case "is pretty much a sure thing."

Meanwhile, sustainable investors and other shareowner activists continue to pressure corporations on their political spending activities. The Center for Political Accountability (CPA) recently reported strong shareowner support for resolutions requesting disclosure this year. "At 12 of 18 companies where the resolution was resubmitted from the prior year, shareholder support for disclosure resolutions increased," CPA stated.

A coalition of investors led by Walden Asset Management has expanded shareowner action into the realm of corporate lobbying, filing resolutions with 40 companies requesting that they disclose policies and procedures governing lobbying, including lobbying done on their behalf by trade associations. Almost 90% of all money spent by corporations to influence the political process consists of lobbying rather than the direct expenditures addressed by CPA and its allies.

Also, Green Century Capital Management and Trillium Asset Management filed resolutions with three companies—Bank of America, 3M, and Target—requesting that the companies refrain from political spending altogether.

Target represents a particularly glaring example of the reputational risks associated with political spending. During the 2010 gubernatorial election in Minnesota, the retailer donated $150,000 to a group supporting a candidate "whose stance on LGBT rights was contradictory to Target's corporate policies," Green Century stated. "In response to the donation, the company experienced boycotts, public backlash and degradation of employee morale."

"Target has experienced firsthand the impact that controversial contributions can have on the company’s reputation and employee morale demonstrating that such spending can result in business risk," said Larisa Ruoff, Director of Shareholder Advocacy for Green Century. "As a result, we believe the only way to eliminate such a risk entirely is to refrain from making political contributions."

Target held its annual general meeting yesterday. In an email to, Ruoff stated, "The company announced the proposal got less than 7% of the vote. It is unclear to me whether the company included abstentions in its calculations."

In either case, the resolution gained enough support to qualify for inclusion on next year's proxy ballot. "We are pleased with the outcome and consider it to be a strong vote for a first year proposal of this type," Ruoff continued.


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