This article presents a framework for examining the role of proxy advisors in campaigns for ethical investment. We argue that advisors have historically been assumed to be neutral and technical experts, when in fact they wield significant political influence, and can serve as gatekeepers or allies in campaigns for ethical investment. To substantiate these claims, we examined the role of proxy advisors as agents for disseminating norms of business behaviour. We first traced the ecosystem of actors in campaigns for ethical investment, highlighting the pivotal role that proxy advisors play in such movements and the market control of the two key players, and the implications of their potentially influential position. In doing so, we challenged some of the key arguments in favour of shareholder activism, predominately that it widens opportunities for political engagement. We introduced a norm contestation framework for analysis and applied this to proxy advisors as key actors in the ecosystem of market-based activism. Lastly, we explored this political influence through two case studies that illuminate proxy advisors’ role in judging companies on their ESG performance. We also detailed the backlash to the proxy advisory market, which affirms the arguments we regarding the political influence of proxy advisors, highlighting that this is recognised by regulators, and justifies further scholarly scrutiny.
Tag Archives: shareholder resolution
Final Update: Coles Shareholder Resolution
Earlier this year Justine Nolan, Laurie Berg and myself supported a shareholder resolution filed by the Australasian Centre for Corporate Responsibility, which was heard at the Coles Annual General Meeting on 13 November 2019.
The resolution asking the supermarket to reassess its supply chain policies to reduce reliance on third-party audits, and to consult more with unions. At the meeting, workers from the supermarket’s farmer suppliers challenged Coles’ executives over its ethical sourcing policy, asking the retailer to work with unions to ensure workers are fairly treated and paid. The resolution was supported by 12.8 per cent of shareholders.
Coles recently signed memorandum of understanding with three major Australian unions as a sign of the retailer’s willingness to work with unions. Unfortunately this does not include the National Union of Workers (who recently merged with United Voice to form the United Workers Union). This is a missed opportunity for Coles to embrace Worker-Driven Social Responsibility.