Shareholder activism, at least when it comes to the kinds of proposals activist shareholders shoehorn onto company proxies, is generally seen as the province of unions, environmentalists, good-government groups and others seeking to rein in what they see as corporate excess, self-dealing and similar sins.
So as we were browsing the proxy that Apple (AAPL) filed earlier this week, one of the four shareholder proposals caught our eye. Now, Apple has long been a magnet for shareholder campaigns. In the past, stockholders have demanded a public succession plan, environmental reports and more (generally with little success). But this one struck us as a little different, in part because we weren’t sure we had ever heard of the blandly named sponsor, the National Center for Public Policy Research.
As the group’s proposal suggests, and its website confirms, this is shareholder activism from the right: The NCPRR’s website at one point bills itself as a (or perhaps the) “Leading Free-Market Group“. Other parts of its website make clear it’s a squarely conservative organization — it’s replete with scary headlines criticizing government in general and the Obama Administration in particular (“the federal government is now looking to nationalize every drop of water in the U.S.” and the “Obama Administration Urges Students to Drop Out”) and backing big-business-friendly policy positions. (Its own commitment to transparency and accountability are another issue: Charity Navigator gives it low marks on that front, criticizing it in part for not posting the names of its board members or its audited financial statements on its website.)
The proposal put before Apple shareholders by the NCPRR fits the mold: It lambastes the company and high-profile board member Al Gore — yes, that Al Gore, the former U.S. vice-president — for Apple’s decision to pull out of the U.S. Chamber of Commerce over policy positions on global warming.
That spat goes back to October 2009, when Apple became one of a handful of big companies to quit the U.S. Chamber of Commerce in protest over its rigid position against a variety of measures intended to slow human contributions to global warming (for more, see The Unofficial Apple Weblog and the New York Times Green blog). Now, NCPRR is asking Apple shareholders to request a “Conflict of Interest Report” from the board, arguing that the decision to leave the Chamber “was developed to personally benefit a board member” — namely Gore, a longtime environmental advocate who has put put much of his clout behind sustainable-energy policies and business ventures.
The NCPPR’s argument is pretty straightforward: It says Apple’s stake in global-warming regulation is small (its “business in computers and electronic devices does not make the Company a major emitter of greenhouse gases” and so “global warming regulations are not a core business issue for the Company.”) and argues that “[r]esigning from the U.S. Chamber could harm Apple’s business interests in other policy matters.” We think Apple investors would probably disagree with that, given how the stock has performed since quitting the Chamber.
At the same time, the group says, Gore’s various business interests stand to benefit benefit from tighter regulation of carbon emission and other climate-change policies the Chamber opposes (“global warming regulations are central to Gore’s personal investments”). Apple doesn’t disclose enough about conflicts and potential conflicts with board members’ interests, and “[s]hareholders have a right to know if Apple’s involvement in greenhouse gas regulations is being driven by Gore’s personal interests.”
From our perspective, other than pointing out the well-known fact that Gore is an environmentalist who has put his money where his mouth is (presumably his fellow Apple directors knew that when he was invited onto the board), the evidence of some kind of skulduggery is pretty thin gruel, and reads more like polemic than indictment. That said, we wouldn’t be averse to seeing more detail about board members’ financial interests, not just at Apple, but across public companies.
This isn’t NCPPR’s first shareholder proposal, but it does appear to be a relative newcomer to the game, with only three others that we can find, all last spring: One seeking board conflict information from Google (GOOG) and citing clean-energy investor and Obama adviser John Doerr, and two seeking climate-change reports at Goldman Sachs (GS) and General Electric (GE).
Whatever the political orientation of the sponsor, NCPPR’s proposal at Apple certainly have one thing in common with most of its more liberal counterparts: The board opposes it. Urging shareholders to vote against the measure, Apple’s board says the company “has not seen any impact on its business” since leaving the Chamber two years ago, and they don’t expect any down the pike. In addition,
“The decision to quit the Chamber was not driven by any conflict of interest or undue influence by any member of the Board. The Company resigned its membership because the Chamber’s position on climate change differed so sharply with the Company—s.”
Its opposition statement includes a lot more, including a summary of the company’s conflicts-of-interest and environmental policies, but you get the idea.
Stepping back a little, we like this development, and can’t help but hope it’s a trend toward more varied proxy measures from more varied groups. At the very least, proxies could become a lot more entertaining.
Still, barring the discovery of some smoking gun regarding Gore’s involvement in the decision, we do wonder how the group’s position on the matter squares with some pretty broadly held conservative positions, including the idea that corporate boards should more or less be allowed to run companies and take policy positions as they see fit. Conservative commentators have generally not been kind when it comes to activism-by-proxy-contest, as we’ve seen in the debate over board nominations.
But hey, maybe that will change as well.
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