Corporation Subcommittee on Shareholder Responsibility Considers 56 Proposals in 2013

Over the past year, two subcommittees of the Harvard Corporation considered 56 shareholder proposals regarding the social responsibility of the University’s investments, according to the annual report of the Corporation Committee on Shareholder Responsibility released Thursday.

During this spring’s proxy voting season between March and June, the committees called on McDonald’s to evaluate its nutritional initiatives in the face of childhood obesity rates, urged multiple companies to produce reports on their lobbying activities, and weighed in on proposals concerning best practices for multinational energy companies.

As an institutional investor, the University annually votes its stockholder positions based on recommendations from members of two committees of the Corporation, the University’s highest governing body. The CCSR consists of four Corporation fellows—William F. Lee ’72, Robert D. Reischauer ’63, Lawrence S. Bacow, and Nannerl O. Keohane—who cast the final vote on shareholder proposals. The Advisory Committee on Shareholder Responsibility, a 12-member panel of students, faculty, and alumni, advises the CCSR.

Following the Supreme Court’s controversial 2010 ruling in Citizens United v. Federal Elections Commission, which allows corporations and unions to make unlimited donations on political campaigns, nearly half of the proposals reviewed by the two committees in 2013 related to the political spending habits of corporations.

The committees voted to ask several companies to disclose their policies and procedures regarding electoral campaign participation, as well as their contributions to any political activity. The ACSR unanimously favored proposals to CVS Caremark, Amazon.com, and the Bank of America, citing lack of detail in the companies’ current policies. Meanwhile, resolutions to prohibit political spending by Chevron and ExxonMobil elicited unanimous opposition, for “ACSR members believe it is inappropriate for shareholders to request companies unilaterally to end all political spending,” according to the report.

Out of the 16 proposals demanding more transparency for corporate political lobbying, the ASCR voted in favor of 11, abstained on three, and were split on the rest, indicating a general trend of demands for greater transparency as “an important counter-balance to the Citizens United ruling,” according to the report. Similarly, the CCSR voted in favor of 11 proposals and abstained on the remaining five.

The committees also considered a number of environmental resolutions. The CCSR voted for proposals urging ExxonMobil and Chevron to present more detailed evaluations of company policies regarding “fracking,” or hydraulic fracturing, a controversial natural gas extraction technique. As is custom, the ACSR reviewed the resolutions first, with members in unanimous support “given that [hydraulic fracturing operations] have the potential to cause serious environmental damage and negatively affect surrounding communities.

In addition, following the ACSR’s recommendation, the CCSR voted to oppose a resolution calling on Entergy, an energy provider, to appoint an independent commission to review its nuclear energy safety policies. Opponents of the proposal remarked that the nuclear power industry is “most highly regulated industry in the country” and that Entergy has a good safety record.

Fast food giant McDonald’s was the target of three proposals. The committees voted in favor of resolutions that called on the company to prepare reports on its human rights practices and on its nutritional initiatives, respectively. The committees abstained on a proposal urging the company to calculate and release the salary ratio between its CEO and its lowest-paid employee.

Other proposals concerned issues such as JPMorgan Chase’s investments in PetroChina and, for the first time, the efforts of companies to advance the economic rights of women in developing countries.

—Staff writer Matthew Q. Clarida can be reached at matthew.clarida@thecrimson.com. Follow him on Twitter @MattClarida.

—Staff writer Amna H. Hashmi can be reached at amnahashmi@college.harvard.edu. Follow her on Twitter @amna_hashmi.