Brief Guide to Proxy Fights

The issues shareholders fight companies over don't change much from year to year.

There are still companies with African investments paying taxes to and generally helping out racist regimes and colonial rule. There are still companies making money by supplying the equipment the military uses to teach the peoples of Indochina their place. There are still companies engaging in dubious political activities at home and abroad. And there are still companies whose products and plants could be considerably safer or whose wastes could be disposed of more cleanly. So the battle lines are drawn, it would seem, for some time to come. But the terrain does vary from year to year. This year the battle for Harvard's proxies is being fought on the following ground:

SOUTH AFRICA

The Church Project on U.S. Investments in Southern Africa, a coalition of Protestant denominations is sponsoring resolutions that would force a number of American companies to send their stockholders information on their South African operations.

What the church group wants is detailed figures on how much support U.S. corporation's taxes, "charities," and sales give the South African government; statistics on their treatment of nonwhite workers (most companies claim to be trying to mitigate South Africa's apartheid laws, but their nonwhite workers' average salaries are always lower than their white ones', and nonwhites rarely if ever advance beyond the lowest positions); and accounts of their investments or plans for investment in the Bantustans, undeveloped and generally barren areas where the South African government says it will permit African autonomy.

South African official policy "assumes that South Africa will continue to rely for an indefinite period on a net inflow of foreign exchange to supplement local sources of finance," said a report by the Investor Responsibility Research Center, (IRRG), a factfinding organization Harvard joined other universities and foundations in setting up last Fall. American investment, about 15 per cent of total foreign investment in the country, was close to $1 billion in 1971.

A few companies--notably Ford, Xerox, and Kodak--defused the Church Project resolution by agreeing to disclose the information called for voluntarily. But other companies say they don't want to waste money and effort on gathering facts they think aren't needed. The two corporations Harvard holds stock in, (with the number of shares Harvard owns and the date of the annual stockholder meeting where it will have to take a stand on the Church Project resolution), are GENERAL ELECTRIC (225,000 shares; April 25) and IBM (200,000 shares; April 30). The University will most likely support the resolution, since it voted for it last week in a proxy battle over Caterpillar Tractor's activities.

Last year activist groups sponsored a resolution to have MOBIL OIL (250,000 shares; May 3) disclose information on its South African operations. With most of that information now available, the United Church of Christ has moved on to bigger and better things, notably a shareholder resolution to have the company adhere strictly to principles of fair employment by starting affirmative action programs in "countries where local laws or customs involve discrimination on grounds of race, sex, or religion."

If the IRRC or other groups convince the Corporation committee on shareholder responsibility that Mobil isn't adhering to these principles now, Harvard will probably support this resolution too; otherwise it will probably oppose it as a "Have-you-stopped-beating-your-wife" affair.

In 1966, the United Nations General Assembly revoked South Africa's mandate over Southwest Africa's mandate over Southwest Africa, which it had ruled since 1919, and turned legal authority over the province--renamed Namibia--to a Council of Namibia, which has sat powerless in New York ever since. In 1970, the Security Council endorsed that decision and declared South Africa's presence in Namibia as illegal. The U.S. government has warned American firms still operating in the province--and still making payments to South Africa--that it will not protect them when the Namibians take over, but plenty of companies are continuing undaunted.

So the United Church and the Church Project are sponsoring resolutions to amend the certificates of incorporation of CONTINENTAL OIL (225,000 shares; May 1) and PHILLIPS PETROLEUM (70,000; April 24) to prohibit them from conducting operations in Namibia, and to require them to wind up their current operations there. Harvard has never supported substantive resolutions like this in the past; but because of the clear illegality of South African rule in Namibia it is possible that the Corporation will make an exception in this case.

At any rate, the student-faculty-alumni Advisory Committee on Shareholder Responsibility (ACSR) called last week for support of the Phillips resolution.

The African country whose problem with American investments most Harvard students are most conscious of is probably Angola, because it was Gulf Oil's involvement in that Portuguese colony that sparked the occupation of Massachusetts Hall last Spring. Gulf faces no shareholder resolutions this year, though there is a somewhat desultory boycott of its products.

But the Church Project is sponsoring a resolution to have EXXON (275,000; May 17) establish "a broadbased committee including outside representatives" to investigate the implications of the new oil exploration the company plans to begin off the coast of Angola. Unless Exxon comes up with a tolerably complete study of these implications, which include increased payments to repressive Portugal, it's hard to see how Harvard can oppose this resolution, even if it accepts Portugal's claim that Angola's not a colony at all, but an integral part of Portugal.

AT HOME

The ACSR came down hard last week against the first of a second class of shareholder resolutions, one calling on G.E. to stop influencing politics in this country. "Most of the ways of influencing were illegal anyway," Martin J. Auerbach '73, an undergraduate member of the committee, explained, "and we didn't have any evidence that G.E. was using them."

Besides G.E., companies facing shareholder resolutions dealing with their political activities include EASTMAN KODAK (250,000 shares; April 24), GENERAL MOTORS (275,000 shares; May 25), and IT&T (325,000 shares; May 9). Ralph Nader's Project on Corporate Responsibility is asking all three to issue an annual report on its political contributions, including "brief descriptions of positions communicated between high-level personnel...and high-level officials of the federal government concerning any matter of unusual significance to the corporation." Particularly in view of the continuing furor over IT&T's attempt to buy the Chilean election, Harvard may well decide to support these resolutions.

SOUTHEAST ASIA

Until Mass Hall, demonstrations against large corporations were generally directed at Vietnam war profiteers. This year Clergy and Laity Concerned is sponsoring resolutions calling on G.E. and Exxon to report to their shareholders on their involvement in military projects in Southeast Asia and to establish committees "to provide for an orderly transition from military to civilian-oriented production." The ACSR came out against the G.E. resolution last week, not so much because it likes the company's military contracting, Auerbach said, as because most of the information G.E. hasn't already released is classified anyway.

No shareholder in LEAR SIEGLER (150,000 shares) is sponsoring an antiwar resolution, but the New American Movement is interested in the company anyway. At an open ACSR hearing a few weeks ago, NAM members raised the issue of Lear Siegler's training pilots and supplying equipment to South Vietnam, citing Boston Globe reports of skyrocketing numbers of American civilians in the country as evidence that such corporate involvement not only helped kill people but also risked a recommitment of American troops.

NAM asked that Harvard sell its stock in the company and make a public statement about it; Stanley S. Surrey, Smith Professor of Law and the ACSR's chairman, said the ACSR would try to consider the matter after the proxy season.

IN THE APPALACHIANS

The first proxy campaign of them all was Campaign GM, which wanted, among other things, safer cars. Recently, activists have been more interested in the safety of companies' employees, and this year a group of staffers from the UMW's Miners for Democracy and various Ralph Nader groups--with occasional advice from outsiders like Martin Peretz, Master of South House--formed Campaign Continental.

Campaign Continental would require Continental Oil to improve conditions in its Appalachian coal mines, where most of the recent great mining disasters have occurred. Because Conoco filed its resolution late, the Securities Exchange Commission does not force it to include the resolution in management's proxy solicitations, so the Campaign is soliciting on its own. It's unlikely that Harvard will support this resolution, since the ACSR, for example, considers solicitations from non-management groups, if at all, only after its other business--in all probability, after Conoco's annual meeting.

Finally, the ACSR has accepted a request from Richard Wilson, professor of Physics, that it look into the information G.E. and WESTINGHOUSE (200,000 shares) offer the public on the safety of their nuclear reactors. Neither company provides nearly enough information, Wilson said last week. "The University should point this out, since its job is to educate and inform people."

Wilson said he would have bought a share of Westinghouse and sponsored a resolution on the matter himself if he had known in time of the University's policy of deciding on resolutions raised by others but not sponsoring resolutions of its own. As it is, he said, "Harvard could say, 'we have 200,000 shares and you should listen to us even if there's not a shareholder meeting.'"