Views » May 23, 2008 » Web Only

A Different Kind of Democracy

By David Sirota

The never-ending presidential campaign is enough to overload anyone’s senses. The themes and messages are mind-numbingly discombobulated — race, class, flag lapel pins, NAFTA, bowling photo-ops, Iraq and, of course, endless promises of “real change.” It is like the head-pounding noise of bad heavy metal music, but the subliminal message isn’t a satanic code — it’s one telling us that presidential campaigns are always the most important arenas of democracy.

But this week you may hear another sound. This one will come from ExxonMobil’s annual meeting in Dallas. The thrum may be quieter than the political din, but it is about something that can be more critical than even presidential elections — something called shareholder democracy.

The concept is simple: By law, anyone owning at least $2,000 of company stock may file a shareholder resolution demanding a change in that company’s behavior. Investors then get to vote their shares of stock on the resolution.

At ExxonMobil’s meeting on May 28, a group of shareholders is planning to offer resolutions asking the company to invest more in renewable and alternative energy. Though the move has garnered scant media attention, it could be far more significant than the presidential pandemonium. According to Friends of the Earth, ExxonMobil and its predecessors’ products are responsible for emitting roughly 5 percent of all human-generated carbon pollution since 1882. Forcing a company like this to even minimally change could have planet-wide effects.

But, then, with the company generating $40 billion in annual profits, ExxonMobil’s shareholders are making bank. So why would any of them vote to change the business? Because if they don’t, those profits could evaporate.

ExxonMobil is one of the globe’s least diversified energy companies. The vast majority of its resources go toward developing air-polluting fossil fuels, and it invests almost nothing in renewable or alternative energy. That currently means big money, but if oil supplies diminish, governments regulate carbon or fossil fuel prices fluctuate, it could mean even bigger losses. And so those shareholders demanding change are appealing to fellow investors’ belief in capitalism, not altruism.

For example, citing their desire to “safeguard long-term shareholder value,” a group of shareholders with $5 billion in ExxonMobil stock excoriated company management in 2006 for “not sufficiently preparing for tomorrow’s energy” and running “the risk of lagging significantly behind” competitors. Many of these investors are expected to back this year’s alternative energy resolution, especially considering the boost from none other than the Rockefellers — the family that originally founded what would become ExxonMobil.

The name Rockefeller has long been associated with pollution-belching smelters and landscape-scarring mines — but also with steady profits. It is that business sense — not tree-hugger idealism — that led a group of Rockefellers this month to embrace the environmental initiative. “If the next 20 years of the energy business were going to be just about oil and gas, we wouldn’t be holding this press conference,” said one Rockefeller kin at the event announcing the family’s position.

ExxonMobil management could win out and defeat the resolution — but it would be a pyrrhic victory. Executives would keep generating publicity that not only makes the company look bad, but reminds the public about the untapped power of shareholder democracy that big business would rather people ignore.

After all, through pension funds and 401(k) plans, ordinary Americans collectively own a lot of stock, and consequently a big chunk of shareholder resolution votes. These votes often go unexercised, but the more attention shareholder resolutions receive, the more citizens will “become educated about various corporation policies” because they will realize “they can do something about them,” as famed shareholder activist Saul Alinsky once said. That is what truly scares Corporate America — and what could bring the most “real change” of all.

• Help In These Times publish more articles like this. Donate today!
• Subscribe today and save 46% off the newsstand price!

• subscribe to print magazine

• stay in touch with our email newsletter

  Subscribe to our regular weekly e-mail newsletter. It's packed with updates on recent and upcoming stories, events, campaigns and things every progressive should be informed about.

   

• email this article to a friend

  Your Name Your Email Recipient Email

  Personal message Thought you might be interested in this article from In These Times.

   

  Please help us prevent spam by verifying the word you see in the image above

  Send to multiple recipients. Just separate each email address with a comma.

• Reader Comments

  Corporate honchos don’t need to worry.  The people who will hold the top economics jobs in the Obama administration will change the ground rules and prevent combined shareholder actions.  That is unless everyone with influence on his campaign gets them to see that he needs advisors with a different type of background to know what’s best to revitalize the economy.  See who he’s got now (complete list of the Obama campaign’s economics and domestic policy advisors from an article last week in the Chicago Tribune):

  http://www.chicagotribune.com/services/newspaper/printedition/monday/chi-obam ma_m mon_nusep17,0,3844054.story?page=3

  Michael Froman - Citigroup bank exec., pro-free trade & “business-friendly”, former Pres. Clinton advisor

  Austan Goolsbee - professor of business at U. of Chicago

  David Cutler - Pres. Clinton health economist, opposes single-payer

  David Blumenthal - Director, Institute for Health Policy, Harvard Medical School

  Jeffrey Liebman - Economist, Harvard professor and member of Clinton White House Council of Economic Advisers. Research has focused on role of earned income tax credit in moving people from welfare to work

  Dan Tarullo - International trade expert, Georgetown law professor and former Bill Clinton economic adviser i.e. GATT & NAFTA proponent

  Eric Holder - Clinton deputy attorney general

  Cass Sunstein - University of Chicago law professor

  Laurence Tribe - Harvard law professor

  Cassandra Butts - Senior policy adviser to House Democratic leader Richard Gephardt

  Note the total absence of labor economists, economic development experts, experts in “green” economics, environmental advisors, anyone to educate him on the opposition viewpoint to the current trade agreements or a single populist. Thanks to Bush & Co. we’re facing possible economic meltdown (and all the suffering that would accompany it) if the next administration doesn’t implement creative means to grow the U.S. economy, and restore some manufacturing (preferably green) in order to boost the demand side (purchasing power).  It’s what voters are looking for.

  Posted by ClearEye on May 25, 2008 at 6:36 PM

• register a new account »Posting Security

  To participate in our forums, please register for a free account.

  Username Password

    Remember me
  

  Retreive lost password »

Also by David Sirota

• Colbert Conservatism
  Pop quiz--name the political leader who said the following: "We must be willing… morePosted on November 26, 2009
• Intelligentsia Against Intelligence
  In the parlance of our times, the term "Idiocracy" means a nation run… morePosted on November 20, 2009
• Where Are the Real Deficit Hawks?
  Let's say you're a congressperson or tea party leader looking to champion deficit… morePosted on November 14, 2009
• We Are What We Trade and How We Trade It
  Trade and globalization--when not referencing blockbuster sports transactions or raucous street protests, debates… morePosted on November 7, 2009
• TARP on Steroids
  I recall that September day like it was yesterday--the explosion so stunning, so… morePosted on October 31, 2009