Wednesday, September 26, 2007

BBT issues alert about proposed rules on minority shareholders.

Brethren Benefit Trust (BBT) has issued an alert about proposed rule changes by the Securities and Exchange Commission that, if implemented, would render the voice of minority shareholders silent. BBT manages $435 million for Brethren Pension Plan and Insurance members and Brethren Foundation clients. All of the funds are invested in a socially responsible manner, with investment screens and activist initiatives guided by Annual Conference statements and resolutions.

Citizen action to avert the proposed rule changes “will only take five minutes, but needs to be done no later than Oct. 2,” the alert said.

The SEC is holding a 60-day open comment period for feedback on several proposals related to shareholders. If implemented, the proposals would severely limit the capabilities of minority investors to sponsor shareholder resolutions by eliminating nonbinding resolutions, by allowing companies to opt out of receiving shareholder resolutions, or by doubling the current voting percentages needed by resolutions to be allowed to be refiled with the same companies the following year. The proposed changes would also limit or eliminate the ability of shareholders to nominate members of corporate boards.

Over the past 35 years, 95 percent of shareholder resolutions filed have been nonbinding, in an attempt to give shareholders the ability to advise companies on shareholder sentiment, the alert said. “Such resolutions do not force companies to run at the whim of their shareholders; rather, they allow shareholders to address a number of critical issues, such as non-responsive corporate boards, a history of pollution and/or inaction on climate change, a history of racial- or gender-based lawsuits, failure to recognize indigenous peoples rights, and other issues of sustainability.”

Faith-based investors, such as BBT, are nearly always minority investors. “Although the Church of the Brethren and other faith-based investors are small in voice, the impact our organizations have had in effecting change in corporate board rooms over the past 35 years has been remarkable,” said Nevin Dulabaum, BBT’s interim director of Socially Responsible Investing.

One recent example is a proposed resolution submitted to Aflac earlier this year that pertained to executive compensation. The resolution was filed by Boston Common Asset Management using BBT’s shares in the firm and prompted the company to agree to giving shareholders a nonbinding vote on executive compensation. The initiative, which included Interfaith Center on Corporate Responsibility (ICCR) members petitioning 50 Fortune 500 companies, proved to be a success. Not only did Aflac become the first major company in the US to agree to give its shareholders such a vote, similar resolutions with other companies also garnered a good percentage of votes.

BBT staff learned of the SEC comment period last week during the ICCR’s fall meetings. ICCR and the Social Investment Forum has established to allow organizations and individuals to quickly send such letters. The website also offers links to additional resources. For more go to

Source: 9/26/2007 Newsline

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