The levers of corporate governance are pretty limited. The corporate form is designed to limit the extent to which minority owners of common stock can intervene in corporate operations. As a result, most proxy proposals of social concern pertain to public disclosures (e.g. of environmental impact, of lobbying expenditures, of pay equity data, etc.) or to the appointment of sympathetic board members/removal of unsympathetic board members. These are nowhere near a majority of total proxy proposals, but they’re a sizable percentage of total shareholder proposals (most of which do not pass). For more detail on this, see this comment.
Thanks! This is helpful, and nudging me away from this approach.
Do you know of any good primers to get a better sense of how/when these levers get used on socially relevant issues?
The levers of corporate governance are pretty limited. The corporate form is designed to limit the extent to which minority owners of common stock can intervene in corporate operations. As a result, most proxy proposals of social concern pertain to public disclosures (e.g. of environmental impact, of lobbying expenditures, of pay equity data, etc.) or to the appointment of sympathetic board members/removal of unsympathetic board members. These are nowhere near a majority of total proxy proposals, but they’re a sizable percentage of total shareholder proposals (most of which do not pass). For more detail on this, see this comment.