14 May 2020 Conservatives, Take Back the Franchise With Proxy Voting
When it comes to voting, most Americans instinctively think of large national elections that occur in November. The amount of money that politicians spend to get their supporters to the ballot box is staggering. For example, in their respective 2016 campaigns, Hillary Clinton raised $1.4 billion and Donald Trump brought in around $950 million.
While this money was spent on a single presidential election, many more votes were cast in 2016 with far less expense and fanfare that arguably have a more profound impact on American society. And these votes are cast every year. I am not talking about federal, state or local elections, but rather, thousands of corporate proxy votes.
After all, politics is downstream of culture, which is upstream from business.
Increasingly, American businesses play a major role in shaping not just politics but our collective ethos. And they are doing so with a decidedly left-leaning skew. Just as we realize the importance of political votes, conservatives need to wake up to the fact that liberals are dominating corporate votes. The result is seen every day as corporate America marches further to the left and takes actions that offend conservative and traditional values.
How do liberals do it?
Every publicly traded company must host an annual shareholder meeting. At these meetings, investors cast votes for board members, management proposals and shareholder proposals. It’s among that final set — shareholder proposals — where the left is especially adept at influencing corporate decision-making.
The left dominates the shareholder proposal space, annually filing 95 percent of Environmental, Social and Governance (ESG) proposals. With 400 to 500 ESG proposals filed per year, that’s a lot of opportunities to influence corporate behavior. Compounding this is the fact that the organizations that advise investors on how to vote for these ballot initiatives have become fully “woke.”
Until about five years ago, ESG proposals generally received single-digit support. But in recent years, the two primary proxy advisors have shifted dramatically to the left. As a result, liberal ESG proposals now receive record support. This year, Morningstar reported that 2019 “ESG-related shareholder resolutions were supported, on average, by 29 percent of investor shares voted. The previous record high was 25 percent in 2018.”
As the director of the conservative movement’s most effective shareholder activism organization, I can attest that any proposal receiving more than 10 percent of the vote is going to get the attention of the C-suite and board.
With the left dominating this landscape, it’s unfortunately no longer surprising that:
- Dozens of major American corporations fund Planned Parenthood;
- Major American companies support policies to restrict the Second Amendment;
- Corporations have donated massive sums to the Southern Poverty Law Center (SPLC), and others rely on the SPLC to limit conservative and Christian voices and funding;
- Hundreds of companies threatened to leave Georgia in 2016 after its legislature passed a religious freedom bill; and
- Last year, after Georgia passed pro-life legislation, more than 180 CEOs signed an advertisement in the New York Times declaring that pro-life laws are “bad for business” — as film studios threatened to stop all filming in the state.
These actions do not occur in a vacuum. Many of these misdeeds are the result of the left’s methodical, vigilant shareholder pressure campaigns. And as noted, these shareholder campaigns are yielding record support.
So what can conservatives do about it? In a word: engage.
At the Free Enterprise Project we have developed a tool to help conservatives take back the franchise. We recently launched the first-ever resource to help conservative investors navigate proxy ballot voting. Our Investor Value Voter Guide aims to equip conservatives with the power to reclaim their voices within corporate America and to neuter the left’s undue influence.
Before now, conservatives could (sort of) be forgiven for not engaging with the corporate ballot box. But not anymore. Our guide is a comprehensive educational tool that shows how left-wing ESG proposals not only fail to deliver on promises of increased investor return, they actually destroy shareholder value. We demonstrate in painstaking detail that proxy advisors are doing a wild disservice and unimaginable financial harm to their clients. But more importantly than all of that, we provide a better way.
By empowering conservatives to engage the franchise and vote down the most offensive left-wing proposals, while at the same time supporting good conservative resolutions, together we can stem the tide of corporate America’s slow march to the left.
Justin Danhof is general counsel for the National Center for Public Policy Research and director of the center’s Free Enterprise Project. Prior to joining the center, he worked in the Miami-Dade State’s Attorney’s Office in the Economic Crimes and Cybercrimes Division, for the Massachusetts Alliance for Economic Development and at the U.S. Securities and Exchange Commission. Follow him on Twitter @DanhofJustin. This was originally published by The Hill.