TheCorporateCounsel.net

We’re exactly 8 months out from Festivus 2024 (for those who celebrate) – but it is never too early for the Airing of Grievances. Yesterday, the Interfaith Center on Corporate Responsibility filed a notice of exempt solicitation in response to the “scorching diatribe” (John’s words) against shareholder proposals & proponents that Exxon included in its proxy statement earlier this month. ICCR’s statement is also strongly worded. It concludes:

Shareholder proponents fully recognize the challenges an authentic commitment to decarbonization presents for the oil and gas sector, and are eager to work with companies like Exxon Mobil to help make the inevitable transition a smoother one for everyone involved. What is not helpful, however, is the company’s adoption of an aggressive stance towards its investors through litigation and disparaging remarks in its proxy statement to silence dissent. Given the existential stakes for both the business and its stakeholders, it is disappointing that leadership has chosen tactics of intimidation rather than embracing a more open and productive route forward.

As part owners, investors have the right, and indeed the obligation, to engage management and the board on corporate governance concerns or harmful societal impacts that may flow from a company’s operations or strategy. Investors are concerned with corporate impacts that may translate to systemic financial risks to their portfolios in the future and they utilize the proxy process to voice these concerns as is their right. Strong corporate leaders will not find this give-and-take “obstructive or abusive” but will recognize it for the important private ordering mechanism it is intended to be.

ICCR obviously has a dog in this fight – it exists as a coalition of 300+ active institutional investors who regularly submit shareholder proposals. ICCR’s membership ranks include Arjuna Capital, who is one of the proponents Exxon sued earlier this year when seeking a declaratory judgment to exclude a proposal from its proxy statement. Time will tell whether other coalitions and/or proponents join the fray.

– Liz Dunshee