How Do Shareholder Resolutions Work?
Anyone or any organization owning at least $2000 worth of stock in a public corporation is entitled to file a shareholder resolution for the purpose of directing the company to address an issue of concern. The resolution can be dismissed at the SEC for any number of reasons, but if it passes the board must present it to the shareholders at their annual meeting and the resolution put to vote.
Even if you win, the company is not obligated to listen to its shareholders, but then it risks hurting its image or losing customers. And you almost never win. Because most shares are voted by proxy, and most proxyholders vote the way the companies’ boards recommend, most resolutions are deemed very successful if they get 10% of the vote. Such used to be a rarity, but as coalitions grow and become more sophisticated, totals of 20-40% have been achieved, which has often been more than enough to inspire action on the part of the company.
And sometimes it doesn’t even take that. Many victories have been won simply by getting the company to sit down to the table and negotiate. Such famously happened with Steve Jobs and Apple in 2007 when advocates got him to address electronic waste and sustainability and he announced plans for “a greener Apple.”
Even if you win, the company is not obligated to listen to its shareholders, but then it risks hurting its image or losing customers. And you almost never win. Because most shares are voted by proxy, and most proxyholders vote the way the companies’ boards recommend, most resolutions are deemed very successful if they get 10% of the vote. Such used to be a rarity, but as coalitions grow and become more sophisticated, totals of 20-40% have been achieved, which has often been more than enough to inspire action on the part of the company.
And sometimes it doesn’t even take that. Many victories have been won simply by getting the company to sit down to the table and negotiate. Such famously happened with Steve Jobs and Apple in 2007 when advocates got him to address electronic waste and sustainability and he announced plans for “a greener Apple.”