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Newground Blog:
Reflections, Musings, and Ruminations on Impact Investing

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Listen to the Public Radio Feature on Newground
It tells the inside story of a transformational shareholder engagement with McDonald's.

Click here to listen online or to download podcast from NPR affiliate KUOW @ 94.9 FM.

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Fair Vote-Counting

[ 03/09/12 ]   Investor Voice, SPC filed a shareholder proposal today on behalf of Newground Social Invesment at the JM Smucker Company that asks for a bylaw change to establish fair and transparent vote-counting procedures.  The request is for the Board to adopt what's being called the "SEC Standard" vote-counting formula across-the-board for all categories of votes.  The "SEC Standard" is:

FOR
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FOR + AGAINST

It is astonishing, but companies are not required to use a consistent methodology and can typically adopt any vote-counting formula they wish when tallying votes.  They may count shares that "abstain" or even "broker non-votes" on ballots not returned -- and companies are frequently found using several different vote-counting formulas in the same proxy (usually according to what advantages management the most). 

These practices distort the vote and disadvantage any issue of concern to progressive investors.

This is possible because vote-counting is a matter left to state law, and most states allow remarkable latitude -- with the notable exception of New York State, which mandates the "SEC Standard" across-the-board (excepting certain votes that require a supermajority).

Smucker's used four different vote formulas in its 2011 proxy.  Not surprisingly, each formula was the one (for that type of vote) that provided maximal benefit to management at the expense of shareowners.

There is a quote usually attributed to Joseph Stalin that reads: I don't care who gets to vote, so long as I am the one who counts the votes.  It seems to be a sentiment that is alive and flourishing in corporate America today.

This resolution (unless applicable laws dictate otherwise) calls for the fair, simple, and consistent “SEC Standard” across-the-board.  It is a proposal that Investor Voice has presented -- and boards of directors have adopted -- at other S&P 500 companies. 

The honoring of voter intent is a hallmark of fair and democratic voting -- but such principles are sadly absent in the way voting is handled today by much of corporate America.

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Click here for more on Newground and Investor Voice engagement activities.

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Bruce Herbert is Founder and Chief Executive of Newground Social Investment.  Herbert, an Accredited Investment Fiduciary, is a former Governing Board Member of ICCR (the Interfaith Center on Corporate Responsibility), and was Co-Founder and first Director of the Northwest Coalition for Responsible Investment.

Mr. Herbert began his financial career with Merrill Lynch in 1984, and has practiced sustainable & responsible impact investment since 1986.

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Now enjoying its third decade, Newground Social Investment provides individual, institutional, LGBTQ, and not-for-profit clients with:

Socially responsive (SRI* / ESG*) money management that integrates investment decisions with social concerns and personal or institutional values.
Competitive financial returns along with positive social impact.
Financial coaching and Life Planning that creates peace of mind, a sense of integrity, and financial security.
Community investment for strong local benefits.
Shareholder advocacy for transformation, transparency, and accountability.

Newground is a fee-only Registered Investment Advisor serving institutions and individuals of means who are principled, proactive and inspired to make a difference with their investments.

    * SRI = Socially Responsive.., Socially Responsible.., or Sustainable & Responsible Investment
    * ESG = Environmental, Social, and Governance factors

Newground Social Investment, SPC is a Registered Investment Advisor that is incorporated and registered in the State of Washington.  In accordance with applicable law, we may only conduct business in states where appropriately registered or exempted from registration.  Newground currently serves clients in a number of states nationwide, and we would be pleased to discuss whether it is permissible (given your state of residence or incorporation) for us to serve your financial needs.

   

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(206) 522-1944
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