After climate, abortion rights are invited to general meetings of listed companies
Abortion rights are becoming a topic for corporate boards in the United States, and a textbook case for all listed companies, listening to activism and anti-activism tactics. Shareholder resolutions on this topic reached a record high across the Atlantic this year, as did the most famous resolutions in Europe in favor of climate change or gender equality.
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in view of the Supreme Court
The fever began in June 2022 following the US Supreme Court’s decision to strike down federal abortion rights, leaving each state free to define its own law on the subject individually. The 2023 general meeting season is the first opportunity for shareholders to put the issue on the table. The possible consequences of a negative vote on stock market prices, of course with the key.
Credit card company American Express, which just held its general meeting, has faced two shareholder proposals from Change Finance, a CSR investor. They have filed abortion-related motions with several financial companies, seeking more information about whether these companies provide information about their customers to police in states that ban abortion. Change Finance now owns over $1 million in American Express stock. Both of these dissenting resolutions were voted on by shareholders, but Amex did not disclose how they were scored.
Promotion of values…
Like many American companies, the members of Amex’s board of directors faced a difficult situation. On the one hand, they promote the company’s values, the group’s reputation internally and externally, and its ability to recruit employees worldwide. The consensus for all these groups goes in favor of protecting the privacy of the women concerned. Soon after the Supreme Court’s decision in June 2022, several large American companies also organized “abortion benefitsfor our female employees. American Express was one of the first to speak. The company said the group will cover travel and other related expenses for employees and their dependents if they need abortion or gender-affirming treatment that is not available where they live. Amazon, Microsoft, Meta, Walt Disney, Netflix, Citigroup , JP Morgan Chase, Starbucks, Uber, Goldman Sachs announced that they are also offering similar benefits.
… and respect for the law
On the other hand, of course, American companies must follow the law. federal law, and the law of the state where their head office is located. What can be done to overcome all these hurdles, when the concerned state is one of those which has prohibited abortion? Women’s movement, health expenditure to most states; Data falling within the scope of data protected by equivalent measures of the European GDPR. The legal protection barrier has fallen, companies must choose whether or not to protect their employees and their customers, while respecting the law.
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split between investors
Ultimately, these same companies are bound by their investor base, which funds them and elects them to governance positions. This investor base, largely made up of US funds, is itself divided over the abortion issue that is currently dividing the United States. From one end of the chain of American investors to the other, today no one is neutral on the subject and everyone is angry. On the one hand, ESG investors and NGOs such as Change Finance have so far submitted dissent resolutions to more than 30 US companies, demanding more details about their abortion policies. At the other end, conservative activist investors, such as the National Center for Public Policy Research, a conservative-leaning nonprofit organization, have also filed shareholder proposals seeking more information about the potential risks associated with the implementation of supporting policies. Example covering travel expenses to leave the state concerned, in response to anti-abortion laws as well as legal costs. Eli Lilly, a pharmaceutical conglomerate based in Indiana, is facing this case, for example.
Companies have traditionally tried to leave the subject off the agenda of shareholders’ meetings in the traditional way. The traditional approach, which usually works quite well, is to ask the Securities and Exchange Commission (SEC) to reject shareholder proposals on the grounds that they are not eligible for voting. American Express, Eli Lilly and HCA Healthcare, which operate hospitals in the United States and the United Kingdom, have taken this step. But the SEC said investors should be given an opportunity to vote on these abortive shareholder proposals, whatever they are.
The board of directors then had to clearly establish itself. American Express has declared itself “neutral” on all dissenting proposals, regardless of their side. Eli Lilly and the HCA have come out openly against the demands of conservative investors, asking the police to release the data, and have been neutral to the demands of progressive investors, who seek more transparency on the companies’ actions on the subject. Are. The other 27 related US companies have not yet spoken.
success over climate
American Express and Eli Lilly have just had meetings and dissenting resolutions from both sides have been thrown out, by progressives as well as conservatives. All shareholders’ resolutions on this subject so far. But the scores are rising: some rose to 32% at Lowe’s, a US retailer in North Carolina, where abortion up to 20 weeks is legal but difficult. This score far exceeds the record scores achieved by shareholder resolutions on other topics such as climate or diversity.
Of course, such debate is not possible in Europe today, especially thanks to the GDPR laws. But with the advancement of “extra-financial performance measurement,” the social debate is increasingly coming into the realm of shareholder dialogue. And with them, there’s always this potential gap between the law, the historical culture of the company, and the investor base that’s often divided on these topics.
Benedict Hautefort (Scallens), for the challenges. FR