Public Interest Shareholder Resolutions
Diocesan Press Service. February 20, 1973 [73055]
February 20, 1973 Executive Council Meeting
Committee on Social Responsibility in 2/20-22/73 Investments
Your committee has examined shareholder resolutions submitted to corporations in which the Domestic and Foreign Missionary Society owns stock.
The following resolutions contain our recommendations and are offered for your consideration:
RESOLUTION I (Adopted)
RESOLVED, That the Executive Council authorize the Committee on Social Responsibility in Investments to support and proceed with the shareholder resolution filed with Exxon Corporation by the Department of Education and Social Concern of the Unitarian Universalist Association (Appendix A) under the framework of the Charter.
RESOLUTION II (Adopted)
RESOLVED, That the Executive Council authorize the Committee on Social Responsibility in Investments to support and proceed with the shareholder resolution filed with American Metal Climax, Inc. by the Episcopal Churchmen for South Africa (Appendix B) under the framework of the Charter.
RESOLUTION III (Adopted)
RESOLVED, That the Executive Council authorize the Committee on Social Responsibility in Investments to support and proceed with the shareholder-resolution filed with IBM by the Project on Corporate Responsibility (Appendix C) under the framework of the Charter.
RESOLUTION IV (Adopted)
RESOLVED, That the Executive Council authorize the Committee on Social Responsibility in Investments to support and proceed with shareholder resolutions I and II filed with
General Motors and Kodak by the Project on Corporate Responsibility (Appendix D) under the framework of the Charter.
RESOLUTION V (Not Adopted)
RESOLVED, That the Committee on Social Responsibility in Investments is authorized to vote the proxies of the So- city in favor of shareholder resolutions advocating:
a. location of shareholders as factor in choosing sites for annual meetings;
b. the desirability of shareholder rather than management ratification of auditors;
c. the improvement of post annual meeting reports;
d. wider availability of transcripts of meetings;
e. the ending of the staffer system of board elections; and
f. the ending of management's automatic voting of unmarked proxies.
RESOLUTION VI: (Adopted)
RESOLVED, That the Executive Council authorize the Committee on Social Responsibility in Investments to support and proceed with respect to Resolutions II and III of the shareholder resolutions filed with General Electric and Exxon by Clergy and Laity Concerned, and to abstain from voting with respect to Resolution I-(Appendix E) under the framework of the Charter.
RESOLUTION VII (Not Adopted) RESOLVED, That the Committee on Social Responsibility in Investments is authorized to vote the proxies of the Society in favor of shareholder resolutions essentially similar to those approved with respect to other corporations in which the Society holds voting shares of stock.
RESOLUTION VIII (Adopted)
RESOLVED, That the Committee on Social Responsibility in Investments is authorized to request by letter that corporations in which the Society holds stock furnish information on employment practices and policies with respect to women and minority groups such as that filed with the Equal Employment Opportunity Commission, and is authorized to support share- holder resolutions requesting such disclosure.
APPENDIX A
Resolution and Statement Submitted to Exxon Corporation
A resolution has been filed by the Department of Education and Social Concern of the Unitarian Universalist Association with Exxon Corporation. The UUA holds 6,000 shares (approximate value $486,000) of Exxon. The resolution urges the company to set up a committee to fully examine the implications of its proposed investment in the Portugese colony of Angola.
WHEREAS Exxon Corporation has applied for rights to explore for oil offshore the Portugese colony of Angola,
WHEREAS a war for independence from Portugal is being fought in Angola,
WHEREAS the World Council of Churches, the Organization of African Unity, the United Nations General Assembly and many governments, private organizations, and individuals support this fight for independence,
WHEREAS foreign investment only serves to assist Portugal as it fights to control these colonies through military force,
WHEREAS Gulf Oil Corporation has been publicly criticized by numerous individuals and organizations for its sizable investment in Angola,
WHEREAS the proposed investment by Exxon Corporation could seriously damage the company's public image and could jeopardize sales both in the United States and overseas,
WHEREAS stockholders deserve an in-depth examination of such an investment,
BE IT RESOLVED that the shareholders of Exxon Corporation recommend to the Board of Directors that the Board establish a broad-based committee to fully examine the implications for both the company and for Angola of its proposed new investment in this Portugese colony. The committee shall have the following functions, structure and duties:
1. The Committee shall consist of no less than 15 and . no more than 20 persons to be appointed by the Board of Directors. The members of the Committee shall include representatives of Exxon Corporation, representatives of African independence movements from Angola, Mozambique and Guinea- Bissau, labor, religious organizations and black community organizations.
2. The Committee shall study and investigate a) the extent to which the Company's proposed investment will contribute to the maintenance of Portugese control in this area, b) the effect of this proposed investment in the colony of Angola upon stockholder investment, customer goodwill and the good reputation of Exxon Corporation internationally, c) the possibility of future losses to shareholders if the proposed oil operation were to be nationalized upon independence, d) the relationship between the company and the Portugese government with regard to the proposed Angola operation including monetary payments expected by the Portugese, and military protection to be provided by the Portugese.
3. The Committee shall prepare recommendations and make a public report to the Board within six months of the 1973 stockholders meeting.
STATEMENT OF SECURITY HOLDER
Our company's proposed investment in Angola has very serious implications. Such an investment will put an Exxon operation in the midst of a colonial war. All taxes and royalties will be paid to Portugal. Our company may be seen internationally as supporting colonialism, thereby hurting our image and sales in Africa and the U.S. This resolution establishes a committee to fully study this proposed investment.
APPENDIX B
Resolution filed with American Metal Climax, Inc., and Newmont Mining Co. by Episcopal Churchmen for South Africa, a shareholder
RESOLUTION
WHEREAS, the United States Government has declared that its policy is to discourage any further investments in Namibia (South West Africa); and
WHEREAS, such investment serves to strengthen the illegal control the South African Government maintains over Namibia and increases South Africa's vested interest in continuing its occupation of Namibia;
THEREFORE, BE IT RESOLVED that the stockholders request the Board of Directors to adopt appropriate resolutions to initiate the process of amending the Certificate of Incorporation of the Corporation by adding the following new sub-paragraph at the appropriate place:
"Notwithstanding the foregoing, the Corporation shall not conduct or be part to any operations in Namibia (South West Africa), either directly or through subsidiaries or affiliates, and shall use its best efforts to see to it that present operations in Namibia (South West Africa) in which it has an interest are wound up."
STATEMENT
The South African Government refuses to yield control over Namibia (South West Africa) to the United Nations, the lawful authority. The United Nations in 1966 terminated a League of Nations mandate by which South Africa had governed Namibia. Since then resolutions of the General Assembly and the Security Council and an advisory opinion of the International Court of Justice have consistently sustained the United Nations' lawful right in Namibia. The United States Government has accepted the World Court decision and has stated a policy of discouraging further investments in Namibia. The Corporation is part owner of Tsumeb Corporation, one of the largest investors in Namibia, which pays taxes to and accepts the racially discriminatory laws of South Africa in Namibia. Such cooperation presents a danger to the Corporation by involving it in direct support of an illegal regime and the use of forced labor.
APPENDIX C
Proposal Filed With IBM by Protect on Corporate Responsibility
BE IT RESOLVED: That the shareholders recommend that the Board of Directors amend the by-laws of the Corporation relating to the nomination and election of Directors to establish a procedure whereby, the Corporation's shareholders may submit nominees for the Board of Directors to be included on the Corporation's proxy statement.
SUPPORTING STATEMENT
Under the current practices, the only candidates listed on the corporation I proxy statement, which is furnished to all shareholders, are those intended to be nominated by management at the annual meeting. Shareholders may make nominations only at the annual meeting, after virtually all of the votes for Director have been cast on the Corporation's proxy. This proposal would permit candidates nominated by shareholders to be listed together with management's nominees on the Corporation's proxy, thus permitting all shareholders to consider candidates in addition to those proposed by management. Shareholders would still be permitted to nominate candidates at the annual meeting.
The reason the proponent favors the Board adopting the by-law, rather than having the shareholders amend the by-laws directly, is to enable the Corporation to adopt a nomination procedure that is practicable and workable for the company. Accordingly, the. proponent asks the shareholders to declare as a matter of principle that they favor a procedure that will permit candidates nominated by shareholders to appear on the Corporation's proxy statement but prefer to leave the implementation and details of such- a nominating procedure to the Board of Directors.
APPENDIX D
Proposals Filed With GM, Eastman Kodak by Project on Corporate Responsibility
PROPOSAL I
BE IT RESOLVED: That the by-laws of the Corporation be amended to include the following paragraphs:
The Corporation shall make a written report each year to its share-holders, in its annual report or elsewhere, setting forth the following information:
1. A description of the establishment, administration, or solicitation of contributions to any separate, segregated fund during the preceding year to be utilized for political purposes by the Corporation or its subsidiaries, as permitted by Section 205 of the Federal Election Campaign Act of 1971. For purposes of this by-law, a "subsidiary" is any company whose stock is at least 50% owned by the Corporation. Hereinafter, "the Corporation or its subsidiaries" shall be collectively referred to as "the Corporation." Such description shall include, for the preceding year:
a) The names of each fund's principal officers and their positions, if any, with the Corporation;
b) The names and principal occupations of any persons outside the Corporation who participated in the establishment of each fund;
c) An account of each fund's method of operation, including the manner in which contributions to the fund were solicited and the method(s) by which decisions were made (1) as to which political candidates or committees should be supported by the fund, and (2) concerning other activities of the fund;
d) The total contributions to each fund;
e) A reasonably detailed accounting of the contributions, expenditures or other transfers of funds made by each fund, including the name and party affiliation of each political candidate or committee to whom any transfer of funds was made and the amounts and dates of such transfers.
f) The total costs incurred by the Corporation in establishing, administering or soliciting contributions for each fund;
g) The total contributions to each fund by all directors and officers of the Corporation as a group, and the number of persons in that group who contributed to each fund. For purposes of this by-law, "officers of the Corporation" means all officers listed with respect to the Corporation in the most recent Standard & Poor's Register of Corporations, Directors and Executives and, if not so listed, the Corporation's director of public relations and director of government relations;
h) A statement whether each fund has registered as a political committee and filed reports pursuant to Sections 303 and 304 of the Federal Election Campaign Act of 1971 and, if so, under what name.
2. A list of any contributions the Corporation has made directly from corporation funds during the preceding year to political candidates or committees campaigning for state or local offices, or any expenditures the corporation has made directly from corporation funds on behalf of such candidates or committees, including the name, office sought, and party affiliation of each candidate or committee and the amount and date of each contribution or expenditure.
3. A list of any contributions or expenditures made during the preceding year by the Corporation directly or indirectly in support of or in opposition to proposals that appear on state or local election ballots, including the name of each proposal, the position taken by the corporation with respect thereto, and the amount and date of each contribution or expenditure.
PROPOSAL II
BE IT RESOLVED: That the by-laws of the Corporation be amended to include the following paragraphs:
The Corporation shall make a written report each year to its share- holders, in its annual report or elsewhere, setting forth the following information:
1. Brief descriptions of positions communicated by the Corporation or its subsidiaries to the Federal government during the preceding year concerning any matter of unusual significance to the Corporation. For purposes of this by-law, a "subsidiary" is any company whose stock is at least 50% owned by the Corporation. Hereinafter, "the Corporation or its subsidiaries" shall be collectively referred to as "the Corporation."
For purposes of this by-law, "any matter of unusual significance to the Corporation" means any matter about which a director or officer of the Corporation, acting in his official capacity on behalf of the Corporation, communicated directly with the President or Vice President of the United States, or with any United States Senator, Congressman, Executive Branch official appointed by the President with the advice and consent of the Senate, or White House staff member. An "officer of the Corporation" means any officer listed with respect to the Corporation in the most recent Standard & Poor's Register of Corporations, Directors and Executives and, if not so listed, the Corporation's director of public relations and director of government relations.
Such descriptions shall include, for each communication or for each series of communications on the same subject matter, identification of the subject matter, a summary of the Corporation's position on the matter, and the names of the Corporation officials and government officials involved.
2. The name of each trade, industry or business association, or ad hoc committee, that engages in efforts to influence proposed or pending Federal executive, legislative or administrative actions, of which the Corporation paid, contributed, or otherwise made available funds during the preceding year; and, for each such association or committee, the name of each director or employee of the Corporation who was employed by or held any position in the association or committee during the preceding year and the positions held by such person in the Corporation and in the association or committee.
APPENDIX E
Resolutions Filed By Clergy And Laity Concerned With EXXON Corp. And General Electric Co.
RESOLUTION 1.
WHEREAS the involvement of the corporation in military production and related research has placed it 4th among all military contractors in 1972,
WHEREAS a significant proportion of the corporation's military contracts are directly related to the continuation of the war in Southeast Asia and to the death and destruction resulting from that war,
WHEREAS over the long term such heavy involvement in military production and research is not in the best economic interests of the corporation, or of human welfare either at home or abroad,
BE IT RESOLVED that the corporation shall suspend all current military contracts, supplies and services with and for the Department of Defense, the Central Intelligence Agency or other agencies involved in the war in Southeast Asia until such time as it can be determined and substantiated that the contracts in effect in no direct manner support or are related to the military actions in Southeast Asia. All other contracts shall be terminated and no new contracts related to the war in Southeast Asia will be entered into by the corporation. A report on the determination and substantiation of current contracts shall be sent to all shareholders within 90 days of the 1973 annual meeting.
STATEMENT OF SECURITY HOLDER
The corporation is a major military contractor which supplies millions of dollars worth of weapons systems and components for the war in Indochina. Given the broad concern throughout the nation for a cessation of the war, it is socially and economically irresponsible for the corporation to continue to seek profits from death and destruction over the short-term at the expense of longer term human and financial considerations. Public revulsion of the war could have serious consumer and investor impact on the corporation, as could the economic problems the corporation will face once hostilities cease. It is imperative that the corporation disassociate itself immediately from further involvement in the war it Indochina.
RESOLUTION 2.
WHEREAS many stockholders believe from the information available that United States corporations deeply involved in military procurement and production, especially that which is directly supporting the military actions in Southeast Asia, should no longer conduct their business in such a manner,
WHEREAS specific information is vital for stockholders to make informed decisions about this corporation's involvement in military procurement and production and the military actions in Southeast Asia,
WHEREAS it is the right of a stockholder to have access to non-competitive information about the corporation's business,
BE IT RESOLVED that the Board of Directors shall provide a full written report to the shareholders within four months of the date of the 1973 annual meeting on the involvement of the corporation in military procurement and production or research on military-related projects, and in support of the military actions in Southeast Asia. This report shall include the following, provided that information directly affecting the competitive position of the corporation or information which can be proven to be of a classified nature may be omitted:
I DEFINITION - For the purposes of this report "military production, procurement and research on military-related projects" as related to the government of the United States shall be under- stood as including all contracts with the Department of Defense, the National Aeronautics and Space Administration, and the Atomic Energy Commission.
II HISTORY - The report will include annual information on all military contracts held by the corporation since 1961 with any government including that of the United States, the nature of the contracts, products and services supplied, the dollar amounts and percentages of the corporation's sales and profits related to such contracts, the use for which the products or services are designed and to which they have been put, and specific data about the quantities of products or services used in the Southeast Asian military actions since 1961.
III RELATIONS WITH THE MILITARY - The report will include annual information on the number of persons employed by the corporation since 1961 who are former high level officers of any branch of the military, or hold reserve status, the nature of their responsibilities with the corporation; the number and functions of persons employed by the corporation who spend a major portion of their time on contract negotiations, research or production related to military contracts annually since 1961; and any other such information as may assist the shareholder in understanding the nature of the relationships of the corporation and production or services rendered for military purposes.
STATEMENT OF SECURITY HOLDER
There is widespread public concern about the extent and nature of military production and research as it relates to further prolongation of the war in Indochina. Since the corporation has been one of the five largest military contractors since 1965, there is increasing concern about its involvement in military contracting. More detailed .information is needed by shareholders in order to make informed investment and policy decisions in matters relating to the corporation's involvement with military production, research, and high-level personnel who have been directly associated with the military. .It is not believed there would be any appreciable cost to the company in providing this data to shareholders.
RESOLUTION 3.
BE IT RESOLVED that the shareholders of this corporation hereby request that the Board of Directors take such action as may be necessary to amend the bylaws of this corporation or take such other action as is necessary in order to provide that:
There be established a committee of the corporation to assist the shareholders and the Board of Directors, and to have the duties stated herein, entitled the Committee on Economic Conversion, (herein after referred to as "the Committee"). The membership, purposes, general powers, and budget of the Committee shall, unless otherwise directed by a two-thirds vote of the Board of Directors, be as follows:
I MEMBERSHIP - The Committee shall be appointed by the Board of Directors, and shall consist of not less than five nor more than nine members, no more than three of whom shall be directors, but all of whom shall be directors and employees of the corporation. The Board of Directors shall seek to obtain representation from different levels and divisions of the corporation for membership on the Committee. The terms of the members shall be for one year with vacancies filled within thirty days.
II PURPOSES - The Committee shall be charged with the responsibility to make findings and recommendations to provide for an orderly transition to civilian oriented production, so that the employees of the corporation will be secure in their jobs, and the shareholders of the corporation will be secure in their investment, within the stated business purpose of the corporation. The Committee shall publish its findings and recommendations in a report which shall be presented directly to the Board of Directors and made available to the shareholders and employees of the corporation at some time before the next annual meeting of the shareholders.
III GENERAL POWERS - The Committee shall have the power to: adopt rules of procedure; elect Committee officers; employ outside advisors and counsel and other staff members who need not be affiliated directly with the corporation. The Committee shall be able to obtain any information from the corporation and its employees deemed relevant by the Committee, provided, however, that the Board of Directors or its Executive Committee may restrict the information to be made available to the Committee to information which the Board of Directors or its Executive Committee reasonably determine to be not privileged for business or competitive reasons or by reason of defense contract security restrictions.
IV BUDGET - The Board of Directors shall allocate to the Committee those funds the Board of Directors reasonably determine necessary for the Committee to accomplish its purposes, and the President and officers of the corporation are authorized to enter into contracts to accomplish these ends.
STATEMENT OF SECURITY HOLDER
The proposed Committee on Economic Conversion will study the effect of the generally unstable and cyclical business of government defense contracting on the, corporation. The cases of Lockheed and Boeing are examples of what can happen to corporations that become too dependent on the Department of Defense. The Committee's efforts to prepare for peace would be similar to efforts undertaken by General Electric and Firestone Tire and Rubber Co. during World War II. The Committee might look into the relationship between Pentagon procurement officers and company officials. It might also recommend profitable alternative to management's present emphasis of defense contracting.