Faith-based investors say proposed rule could gut shareholder rights

Published: 2007-08-10

WASHINGTON (CNS) -- In the 10 years since John Wilson joined Christian Brothers Investment Services, the number of shareholder resolutions filed by the socially responsible investment firm has decreased and the number of resolutions withdrawn after being introduced has increased. That might not sound like progress, but for Wilson and others in the corporate responsibility movement it means that the boards of large corporations are now willing to dialogue with shareholders about climate change, compensation for top executives, human rights and other social justice issues. With dialogue, the shareholder resolutions are no longer needed to push a company toward doing the right thing. "More companies are seeing the value of dialogue with the shareholders," said Wilson, now director of socially responsible investing for Christian Brothers Investment Services in New York and a board member of the Interfaith Center for Corporate Responsibility, which brings together like-minded faith-based investors. But the progress could come to a screeching halt if a rule proposed by the Securities and Exchange Commission is adopted, according to Wilson and others. The proposal, which would revise SEC Rule 14a-8, could limit the right of shareholders to sponsor advisory resolutions by requiring the prior approval of shareholders who together hold at least 5 percent of all company stock.

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