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UPDATED: Dec. 24, 2014, at 8:05 p.m.
Two subcommittees of the Harvard Corporation, the University’s highest governing body, assessed the social responsibility of 56 shareholder proposals in 2014, focusing on lobbying and concerns related to the environment, according to the 2014 Corporation Committee on Shareholder Responsibility annual report released last week.
The CCSR and the Advisory Committee on Shareholder Responsibility determine how Harvard votes its stakeholder positions on a number of ethical and social issues. The ACSR, which consists of four faculty members, four students, and four alumni, analyzes each potential vote and provides a recommendation to the CCSR, whose four members then determine Harvard’s position.
In 2014, those four members included Corporation Senior Fellow William F. Lee ’72, Corporation fellows Lawrence S. Bacow and Nannerl O. Keohane, and former Senior Fellow Robert D. Reischauer ’63. University Treasurer Paul J. Finnegan '75 has since replaced Reischauer on the committee.
During the 2014 spring proxy voting season, the committees addressed several new topics, including fast food advertising and its possible connection to childhood obesity, corporate tax policies, and the impact that investing activities of certain companies may have on greenhouse gas emissions and climate change. The ACSR and CCSR agreed on 51 proposals, and the CCSR abstained from voting on five.
The CSSR considered the same number of proposals this year as in 2013, when the issues addressed similarly included concerns related to lobbying and the environment.
This year, the CCSR voted in favor of all 21 proposals urging companies to disclose information about direct or indirect lobbying practices and expenditures, noting in the report that “shareholder support for this type of request has been growing, suggesting an evolving perception that detailed disclosure about lobbying expenditures is becoming best practice.”
The ACSR also supported new guidelines for evaluating companies’ lobbying practices and the information they disclose about them. According to the report, the ACSR deemed that procedure an “important counter-balance” to the U.S. Supreme Court’s 2010 ruling in Citizens United vs. Federal Elections Commission, which forbade government restrictions on independent political expenditures by non-profit corporations. The ruling now applies to labor organizations and for-profit companies as well.
Several technology companies were the subjects of proposals considered by the committees. Last year, no proposals involved Facebook, the social network company founded by former Harvard undergraduates, but this year, it was the subject of four. The CCSR voted in favor of two of those proposals, one urging Facebook to report on lobbying and the other asking the company to publish a sustainability report “describing the company's short- and long-term responses to [environmental, social, and governance]-related issues.”
The CCSR abstained from voting, meanwhile, on a proposal that asked Facebook to create a policy pertaining to corporate values and political contributions. The committee voted against another proposal concerned with childhood obesity that asked Facebook to issue a report on the effects of fast food advertising. The report cited free speech concerns and argued that the proposal did not offer “an effective approach to addressing the proponent’s concerns about childhood obesity.”
Additionally, the CCSR voted in favor of several proposals related to the environment, such as requesting that DuPont prepare a report on herbicide monitoring and asking Berkshire Hathaway and ConocoPhillip to establish greenhouse gas reduction targets. It also urged Occidental Petroleum, one of the largest oil and gas companies in the U.S., to generate reports on the risk of hydraulic fracturing, or “fracking,” and to establish methane emissions targets.
Of five proposals addressing Chevron, the American energy giant, the CCSR voted in favor of demanding that the company prepare reports on lobbying, hydraulic fracturing risks, and its process for deciding in which countries it operates. The CCSR opposed, however, proposals requesting that the company nominate an environmental expert to its board of directors and list charitable contributions of more than $5,000 on its website.
The committees also considered proposals on a variety of other topics, including a request that Verizon issue a report detailing its response to ongoing discussions over net neutrality, which would required all internet providers to treat all internet data equally. The CCSR abstained from voting on the proposal after ACSR was split in its recommendation.
The ACSR also unanimously voted in opposition of a group of shareholders asking DuPont, which was the subject of three proposals, to cut all of its political spending, describing the request as “inappropriate” because such an action would put companies at a “competitive disadvantage.”
—Staff writer Theodore R. Delwiche can be reached at firstname.lastname@example.org. Follow him on Twitter @trdelwic.
—Staff writer Mariel A. Klein can be reached at email@example.com. Follow her on Twitter @mariel_klein.
This article has been revised to reflect the following correction:
CORRECTION: December 24, 2014
Due to an editing error, an earlier version of this article incorrectly stated that Paul J. Finnegan '75 is a fellow of the Harvard Corporation. In fact, while Finnegan previously served as a Corporation fellow, he is now University treasurer.
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