By Stephone Coward
- The number of environmental and social responsibility shareholder proposals over the last 12 months jumped by 61% from a year ago
- Shareholders of McDonalds went against company recommendations to approve independent civil right audits
The demands for social reform have made it from the streets to shareholder suites. Companies are now being called upon by their shareholders to address race-related policies and practices that impact their workforce and the communities they serve. Bloomberg reported the number of environmental and social responsibility shareholder proposals over the last 12 months jumped by 61% from a year ago among companies in the Russell 1000 stock market index.
Why This Matters: In the wake of racial injustice at the hands of those in power, or able to enforce power, equity shareholder calls for change are being heard with 230 of the 298 proposals reviewed by them were related social responsibility resolutions. These company stakeholders have been known to make their voices heard when a corporation is under performing. Now there are shareholders making their voices heard over racial injustice.
As leaders of large companies have the ability to impact labor numbers through job creation, being a good corporate citizen should be par for the course. It is good business to do good, companies should not need to be pressured into taking matters of racial inequity seriously by performing civil rights audits.
However, not all companies think that way, initially JPMorgan Chase (JPM -0.46%) CEO Jamie Dimon dismissed it as “bureaucracy and BS,” but eventually agreed to join the likes of Verizon (VZ +0.72%) and Citi (C -1.72%) to perform racial audits, although it was a narrow analysis. The shareholders of McDonald’s (MCD +1.92%) had to go against the company’s recommendation and approve a proposal calling for an independent civil-rights audit.
Situational Awareness: In 2020, after the world witnessed, the heinous murder of George Floyd by a Minneapolis police officer, companies felt compelled to put out statements of solidarity with the people across the country demanding change. Many of those statements came with promises to be a part of the change. Two years later, we still are waiting for those promises to be kept, seeing the results of these audits is a step in the right direction along the long journey we are on to equality.
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