Characteristics
of a Successful Shareholder Activism Campaign
Shareholder campaigns can be issue-oriented,
or community-oriented.
Although each type of shareholder campaign is informed by different concerns,
processes and strategies, successful shareholder campaigns have certain
elements in common, such as:
-
Alliances with social movements or public interest groups,
where shareholder concerns and activity mesh with and play a part in a
larger, multi-faceted campaign
-
Grassroots pressure, such as letter-writings or phone-ins
to public investors to generate support for the resolution
-
Communications: media outreach, public and shareholder
education, etc.
-
High-level negotiations with senior decision makers
-
Support and active involvement from large institutional
investors
-
A climate that makes it difficult for the company not
to make the "right decision." For example, if you have plainly compelling
financial argument, you have a better chance of getting company management
and other shareholders on board with your proposal.
-
Persistence. Shareholders don't go away. They own the
company and have a right to be heard. Often shareholder activists stick
with issues for years.
Example: 1999 Home Depot Resolution
to Stop Sale of Old Growth Wood Products
The Home Depot old growth wood campaign gained significant
votes at the company's 1999 shareholder meeting and affected the perceptions
of the shareholders. A few months after the annual meeting, Home Depot
announced that it would phase out the sale of wood from environmentally
sensitive origins, such as primary tropical forest and old-growth stands.
For its reach and exposure the shareholder activism component of this campaign
took relatively little coordination time. This campaign possessed the following
characteristics:
-
Concerned shareholders built on existing strong coalitions
and existing campaigns with forest groups and communities.
-
The overall effort incorporated a strong media outreach
plan, which successfully framed the argument and placed articles.
-
The public interest community built a business climate
and an argument where a phase out of old growth wood products was perceived
as a reasonable request.
-
The overall campaign had more than one organizing center.
Although the campaign could have benefited from a campus
organizing component to solicit votes from university endowments, and despite
the company's relatively poor treatment of shareholders, Home Depot announced
a phase out of wood products from environmentally sensitive areas shortly
after its 1999 shareholder meeting. The company used its 10th
anniversary as an opportunity to make this announcement; although shareholder
pressure was not cited as one of the reasons why the company decided to
make the pledge, shareholders believe that their concern raised awareness
and pressure, and contributed to the change in Home Depot's mindset.
Follow these links to see how shareholder
activism has worked in the context of issue campaigns,
community campaigns in the US, and community
campaigns abroad.
Back
to Shareholder Activism Index
To Shareholder
Dialogue: The Goal of Shareholder Resolutions