Nov. 18 /CSRwire/ - While Citi is hemorrhaging over 50,000 jobs in response to the market collapse triggered by the subprime mortgage meltdown, the bank is foregoing the band-aid measure of sacrificing executive bonuses, which Goldman Sachs did this week (followed by others.) This voluntary sacrifice of executive compensation is a welcome symbolic gesture addressing the symptom, but it falls short of a comprehensive cure to the core problem. Starting in 1993, socially responsible investors have been filing shareholder resolutions urging banks to root out the cause - predatory subprime lending - as well as resolutions on obscene executive compensation and obscure derivatives as problems persisted.
Now, SRI firm Harrington Investments, Inc (HII) is raising the stakes by filing resolutions asking banks receiving billions of Federal assistance under the Troubled Asset Relief Program (TARP) to institutionalize board-level accountability for economic security. HII seeks to fill the accountability void when the US Treasury handed over US taxpayer money to the likes of Bank of America ($10 billion), Citi, and Goldman Sachs ($25 billion each) in exchange for preferred stock -- with no voting rights -- by creating Board Committees on US Economic Security. The HII resolution defines economic security in terms that may sound unfamiliar to banks, such as long-term health of the economy and economic well-being of US citizens.
HII innovated "Shareholder Activism 2.0" strategies by filing resolutions seeking binding bylaws amendments, instead of the “precatory” or advisory nature of most shareholder resolutions where companies can ignore even 99 percent votes. In other words, the resolutions seek to leverage shareholder power to codify risk management mechanisms into company DNA to counteract the lax board oversight that "brought the global economy to the brink of disaster." It will be interesting to see if a majority of shareholders want accountability from those who gambled away the security of their shareholder value -- and of overall economic stability.
This article was written by CSRwire contributor Bill Baue.
CSRwire's Multimedia Picks of the Week
It seems everybody's got a message for Obama these days. Check out the video from Kitchen Gardeners International's "Eat the View!" campaign encouraging the President Elect to convert part of the White House lawn into an edible landscape. It features KGI founder, Roger Doiron, digging a new garden on his own "white house" lawn.
Intel Chairman Craig R. Barrett talks with top engineers from around the world at the Intel Developer Forum. His "Inspire-Empower contest," calls for the best technology solutions to address education, healthcare, economic development, and the environment. The contest will award $100,000 to one winner in each category.
For another inspiring talk from a Chief Executive, check out this video message from Stephen Howard of Business in the Community. Howard asks if CSR concerns can withstand the recession and reminds fellow CEOs that CSR should be of even greater emphasis in times of hardship.
This might be the week of inspiring CEOs: Jean-Philippe Cousteau, the co-founder and CEO of Earth Echo International, is also the grandson of the famous oceanic explorer Jacques Cousteau. In this video he tells young people all over the world that every choice they make is making an impact - and they get to choose whether or not that impact is positive.
Don't miss this new report that tracks the trends in environmental reporting of the FTSE 100 Sustainability Reports. FTSE is a British provider of stock market indices and associated data services. The report investigates the terminology, thematic content and length of Britain's leading corporate reports on sustainability.
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