On April 13-14, 2019, The Intentional Endowments Network co-hosted The Student Conference for Corporate Responsibility with The Dwight Hall Socially Responsible Investment (SRI) Fund at Yale University. This conference convened undergraduate and graduate students and faculty involved in running student-managed funds across the country, with the goal of broadening students' understanding of both sustainable finance and shareholder engagement.
This is not the first time students managers of the Dwight Hall SRI Fund at Yale Unversity have engaged in dialogue around shareholder engagement opportunities. They have been actively exercising their voices as shareholders since 2014, when the Yale Corporation Committee on Investor Responsibility announced that the Yale Endowment would adopt a special proxy voting directive for the issue of climate change. As a student-run socially responsible investment fund, Dwight Hall SRI students sought to file a resolution that the Yale Endowment might be able to vote for in accordance with the new directive. In 2016, the group co-filed a shareholder resolution at ExxonMobil and attended ExxonMobil's Annual General Meeting to vote on the resolution alongside their fellow shareholders. The students found the process extremely valuable from an educational standpoint, and when they approached other student-managed funds to see how they could potentially work together on shareholder engagement work, realized there was a huge lack of understanding around the engagement process and the value of participating.
According to Gabe Malek, a Co-Chair of the Dwight Hall SRI Fund, "My fellow Dwight Hall SRI Fund Co-Chair Trina White and I decided to organize the Student Conference for Corporate Responsibility to teach undergraduates about the importance of shareholder engagement and, in the process, facilitate dialogue between students interested in finance and students passionate about activism. Too often, young people on college campuses see investing and social justice as mutually exclusive. In actuality, though, portfolio management can be used as a tool to address environmental, racial, gender, and corporate governance issues."
Day One: Expert Speaker Presentations & Discussions
On the first day of the conference, the format was highly interactive, with brief presentations from expert speakers who delivered content and seeded conversation, integrated with significant time spent in small-group dialogue sessions at round tables. Panelists introduced the shareholder engagement process, shared hot topics in investor activism, and highlighted engagement in practice.
Main presentation and discussion takeaways included:
- An Overview of Proxy Voting: Learning that shareholders are company owners and have the right to weigh in on critical decisions about company strategy and governance by voting on issues raised at the company’s annual general meeting (AGM). Shareholders can weigh in on many actions “by proxy” without attending the AGM -- including by mail, by electronic voting, or through a proxy voting service (i.e. Institutional Shareholder Services, ISS). Any shareholder who has held at least one share of company stock for at least two months may vote on resolutions, and if you don’t actively vote your proxies, they automatically default to a vote for management.
- An Overview of Shareholder Resolutions: Any shareholder or group of shareholders owning $2,000 or more of a company’s stock for a minimum of a year can introduce a proposal. A resolution must get at least 3% of the vote in its first year; 6% of the vote in the second; and 10% in the third year to remain on the ballot.
- Other Ways to Engage: In addition to proxy voting and shareholder resolutions, panelists shared several ways to engage, including joining an investor collaboration, writing an Op-ed in the city where AGM is held, attending and saying something powerful at an AGM, amplifying an issue on social media, planning a rally around the AGM, taking on powerful special interests who are trying to diminish shareholder rights, and issuing or signing open letters from a group of investors.
- The Need to Defend Shareholder Rights: Shareholder engagement strategies are a powerful mechanism for corporate management and boards of directors to gain a better understanding of shareholder priorities and concerns. Despite this, there are several current efforts to limit shareholder rights by changing the rules of the proxy process to make the filing of resolutions more onerous for investors.
Day Two: Peer Learning & Action Planning
The second day on the conference was entirely dedicated to action planning, with a focus on peer learning and coalition building to advance shareholder engagement opportunities within student-managed funds. Student, faculty, and staff attendees discussed their main limitations and exciting opportunities, and brainstormed several opportunities for individual and collective action.
Main takeaways included:
- Vote Your Proxies: The main point of contact for your holdings should receive a proxy ballot ahead of each Annual General Meeting. These ballots should be discussed, filled out, and returned. If you don’t actively vote your proxies, they automatically default to a vote for management. Proxy Preview is a comprehensive data source on hundreds of shareholder resolutions - including environmental, corporate political spending, human rights, diversity, sustainable governance issues, and much more. If you own mutual funds instead of direct shares in a company, search SEC’s EDGAR database- Form N-PX (that provides a mutual fund’s proxy voting record by year), or utilize collective action databases like Stake.
- Co-File Shareholder Resolutions: Many shareholders submit resolutions annually. As student groups, the most impactful way to participate in this process is to work with investor coalitions (ICCR, As You Sow, SCCR) to co-file on resolutions with other investors.
- Defend Shareholder Rights: To learn more about how current shareholder rights are under attack, ways to engage, and read recent news and updates, visit this page.
- Engage in a Coalition of Student Managed Funds Pursuing Engagement: At this conference we launched The Student Coalition for Corporate Responsibility (SCCR). Led by students at the Dwight Hall SRI Fund at Yale University, and supported by the SIILK Network, the SCCR is a coalition dedicated to shareholder advocacy. The SCCR brings student-led investment funds from around the country together to coordinate shareholder engagement initiatives designed to make companies more socially responsible. Learn more here.
In reflecting on the conference, Gabe Malek, a Co-Chair of the Dwight Hall SRI Fund, said "I hope that attendees walked away from the SCCR with a novel outlook on what it means to own stock in a company, with the understanding that shareholders have the right, and frankly the duty, to hold corporations accountable for negligent business practices. More importantly, I hope the SCCR kickstarts a larger student-led conversation surrounding corporate responsibility in the United States."
If interested in learning more about this conference, the Student Coalition for Corporate Responsibility, or additional ways to engage in IEN's work with student-managed funds and faculty teaching sustainable investing, reach out to Nicole at [email protected]
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