Sanford Lewis, Director
Shareholder Rights Group
A letter to the editor of the Wall Street Journal:l
On September 29, Vivek Ramaswamy of Strive Asset Management published an opinion piece in the Wall Street Journal alleging that Chevron and Apple, among other companies, had engaged in social activism under the guise of creating long-term value to shareholders.
The article portrayed corporate policy changes as simply an outcome of pressure politics by outside groups who cared about non-pecuniary concerns over investment outcomes. Glaringly absent from Mr. Ramaswamy’s article is any acknowledgement that the boards’ “sudden changes of heart” in support of ESG-focused issues occurred after a majority of the companies’ shareholders voted for a change. At Apple, 54% of votes favored a shareholder proposal requesting a civil rights audit. At Chevron, 61% of voting shares supported a shareholder proposal asking the company to track and cut emissions generated by the use of the company’s products.
The genius of shareholder democracy is that it invites perspective-taking by the shareholders that have a vested interest in the success of the company as well as in the economy writ large. Indeed, recent polling shows that investors are heeding environmental and social concerns now more than ever, with nearly 80% saying that ESG is an important factor in their investment decision-making. Investors are at least as savvy about these issues as board and management.
Mr. Ramaswamy has certainly made it clear that he does not believe in the long-term value proposition of ESG. There is no controlling authority as to what will produce long term value for a company, only diverse views, and what we believe is a well-founded resulting surge of interest in ESG investing strategies. Neither the management, board, nor the investors have a monopoly of insight.
The shifting position of corporate boards is not a failure of oversight or an unfounded change of heart, but rather reflects a healthy openness to heed the perspectives of investors on the long-term value proposition and a show of what real leadership looks like.
Mr. Ramaswamy concludes his article stating that “Corporate boards are obligated to act with the sole purpose of advancing the best interests of stockholders. . . owners should assert their rights.” Thankfully, we believe that shareholders are asserting their rights through the shareholder proposal process. And companies are listening and acting accordingly - in the best interest of stockholders.