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Workers’ Capital News - July 10

In this issue:

  • Shareholder Activism

    International Olympics Committee Urged to Adopt Guidelines to End Human Trafficking and Slavery in Company Supply Chains/ Votes Against Re-election of Walmart Execs Express Shareholder Dissatisfaction/ Rite Aid Workers and Shareholders Voice Concerns at Company's Annual Meeting

Shareholder Activism

International Olympics Committee Urged to Adopt Guidelines to End Human Trafficking and Slavery in Company Supply Chains 

Ahead of the 2012 Olympic Games in London, a coalition of investors and faith-based groups, including the Interfaith Center on Corporate Responsibility and campaign group Fair Pensions, has submitted a joint letter to the International Olympics Committee (IOC) calling on the committee to ensure that the supply chain practices of the companies they partner with respect and uphold human rights.

As reported by Responsible Investor, the letter urges the IOC to implement guidelines that would address human trafficking and slavery in supply chains. The coalition proposes that the IOC adopt policies to explicitly prohibit these human rights violations, to assess the risks of actual and potential human trafficking, and to use these assessments to implement effective oversight programs and staff training. The letter issued is part of a larger campaign launched by the coalition, called ‘Celebration without Exploitation’, that promotes corporate social responsibility at the London Games, with a particular focus on ending human trafficking and forced labour practices. The campaign has engaged directly with Olympic sponsors and had also issued an earlier letter to the IOC to push this agenda forward. Though the IOC responded to the earlier letter, they failed to address the key request regarding the adoption of formal guidelines.

Votes Against Re-election of Walmart Execs Express Shareholder Dissatisfaction

As reported by the New York Times and USA Today, last month at Walmart’s Annual General Meeting, in the wake of the bribery scandal that has gripped the world’s largest retailer, shareholders exhibited their dissent against Walmart’s top executive board members. ‘No’ votes cast against the re-election of board members reached some of the highest levels ever recorded in the company’s history. Walmart executives have been accused of neglecting to inform law enforcement after evidence surfaced that millions of dollars in bribes were paid by officials in Mexico in exchange for favors such as building permits. Amid the charges, several institutional investors have expressed opposition to the re-election of board members. Major proxy adviser firms, ISS and Glass Lewis & Co. Inc issued recommendations urging shareholders to cast ‘no’ votes. New York City comptroller, John C. Liu, also oversaw votes by the city’s major pension funds against Walmart executives.

The four board members who were the focus of shareholder opposition at the June AGM were CEO Michael T. Duke; former CEO, H. Lee Scott Jr.; chairman S. Robson Walton; and chairman of the audit committee, Christopher J. Williams. None of them have ever faced such large opposition before at an AGM, as the ‘no’ votes against them exceeded 12%. As stated by John Marshall, capital markets analyst at the United Food and Commercial Workers Union, the votes represented a strong rebuke “by a large portion of public shareholders” for Walmart’s poor corporate governance practices.

Rite Aid Workers and Shareholders Voice Concerns at Company's Annual Meeting 

Facing accusations of corporate mismanagement and labour law violations, major drugstore company, Rite Aid, held its Annual General Meeting on June 21st. As reported by PRNewswire, shareholders, workers and union leaders expressed their concerns over a lack of accountability by management, pointing to the company’s net losses for 20 straight quarters, evidence of age discrimination against older workers, excessive pay for company executives, and conflicts of interest among board members. It is important to note that Rite Aid also recently faced accusations of cheating employees out of pay over the last decade, which resulted in the company paying a $21 million settlement. Prior to the AGM, union representatives and Rite Aid workers held a meeting to discuss the problems at Rite Aid and possible solutions. At the Annual General Meeting, shareholder proposals centering on curbing excessive executive pay and establishing a more independent board of directors, without conflicts of interest, were presented but were opposed by company executives and defeated. However, worker representatives plan to continue working in partnership with shareholders to push for responsible corporate management at Rite Aid.

Disclaimer: The CWC News Digest is a compilation of news items covered in industry publications. The content does not necessarily reflect the views of the Committee on Workers Capital or its members. Comments and reflections on news items may be sent to gpatel@share.ca .

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