As group of CEOs is praised for hollow statements about corporate responsibility, they push to undermine processes to hold corporations accountable to higher values.
Even as the Business Roundtable is being valorized for asserting that companies have obligations to more than just their shareholders, the Roundtable is a leading advocate for measures currently being considered by the Securities and Exchange Commission that would undermine efforts to hold companies to higher values.
The SEC is currently considering making it harder for shareholders to hold corporations accountable — for instance by vastly increasing the ownership threshold for filing a petition and by undermining the role of proxy advisors in corporate governance processes.
In direct contradiction to this week’s letter, the Roundtable’s engagement in this proceeding has consistently been predicated on the notion that advocacy for social aims must be constrained because it distracts from shareholder value and financial impact on corporations.
For instance, this is a direct quote from a June 3, 2019, filing with the SEC:
The low proposal submission threshold permits shareholders to make a nominal investment in a company to present proposals as a form of social commentary or to advocate for a social aim, regardless of the proposal’s financial impact on the company, its relevance to long-term shareholder value or the cost to other shareholders.
According to David Segal, Executive Director of the Demand Progress Education Fund:
"The Roundtable letter smacks of thin rhetorical cover for continued predation by the world’s biggest corporations. If the Roundtable wants us to believe that it and its members are anything better than brazen hypocrites, the Roundtable will immediately reverse its encouragement of SEC efforts to undermine shareholder petitioning and proxy voting.
"Rather, the Roundtable will urge the SEC to ensure that investors are allowed to continue to hold corporations accountable — to good internal governance and to what is best for their workers, consumers, and the communities and broader world in which they operate."
Demand Progress Education Fund is a nonprofit 501(c)(3) entity that educates our more than two million members about matters pertaining to the impacts of corporate power over our economy and democracy. Visit our website: https://demandprogresseducationfund.org