Can Shareholder Activists Force the World's Biggest Oil Company to End Discrimination?
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Much of corporate America has accepted gay rights. But Big Oil has a big holdout, and shareholder activists are determined to drag it kicking and screaming into the 21st century. Today, the shareholders of oil giant Exxon Mobil are meeting in Dallas to vote on a proposed company policy to ban discrimination against gay or transgender workers.
This year’s shareholder resolution has been pushed by New York Controller Thomas DiNapoli. Can it work? Does a ginormous company like Exxon Mobil really have to listen to its shareholders?
In the world of corporate America, money talks. Shareholders frustrated by harmful policies are increasingly insisting that companies listen up. NY comptroller Thomas DiNapoli is clear that Exxon – the world’s largest company in terms of revenue -- had better pay attention, because he is willing to use the muscle of the state’s $150 billion pension fund's stock portfolio to push for rights of transgender workers.
The controller’s office reports that it has helped convince 27 other big corporations to accept new gay-inclusive nondiscrimination policies. So far, Exxon Mobil has refused to do so, calling the measure unnecessary and asserting that the company is already a cheerful “meritocracy” for its 82,000 workers worldwide. Seems that Exxon just doesn’t want to put its professed embrace of LGBT workers in writing. That’s a problem, because as Crosby Burns of the Center for American Progress points out, the company’s home state of Texas has no statutory protections against LGBT job bias.
This year, the company’s board actually tried to get the Securities and Exchange Commission to block the resolution from coming before shareholders, but the agency nixed the request in March.
DiNapoli, who is the sole trustee of a retirement fund with about 16 million shares worth $1.3 billion, observes that after Exxon acquired Mobil in 1999, it killed Mobil’s policy of providing health benefits to same-sex partners except those previously covered. Like many, he believes the company needs a clearer anti-discrimination policy and that without it, Exxon will fail to attract the best talent and foster a secure working environment for employees. Many such resolutions have been floated since 1999, but Exxon won’t seem to budge.
DiNapoli’s stance rests on the fundamental principle that when corporations behave in ways that benefit society, they also help their bottom line. His office, with shares in other corporations that usually make up less than 1 percent of the totals, has also been pressing many corporations to disclose their political spending and the extent of their environmental damage, including possible future harm from a company’s activities like wastewater dumping and fracking, which can result in lawsuits and liabilities.
In a recent interview with Eliot Spitzer, Tico Almeida, founder and president of Freedom to Work, described a Change.org petition he created to highlight Exxon’s failure to protect LGBT employees. Calling the company “Neanderthals,” Almeida said, “they are decades behind in adopting the principles of corporate leadership that so many Fortune 500 companies have already adopted because it’s the right thing to do for business."
The Rise of Shareholder Activism
In the past, shareholder meetings were often eye-glazing affairs where CEOs rattled off lists of accomplishments and to-dos for the year ahead. But things have gotten more interesting of late, as shareholder activists use increasingly sophisticated techniques to get their point across.
Shareholder activism arose during the 1970s when religious investors formed a coalition (the Interfaith Center on Corporate Responsibility) to push for socially responsible changes in corporate policies. Since then, it has become a useful tool to encourage better corporate behavior on social and environmental issues.