From the Summer 2012 Edition of Values

Much of Walden’s success in advocating for greater corporate responsibility and transparency comes from constructive dialogues with companies over many years, entirely outside of the resolution process. Yet sponsoring shareholder resolutions remains a primary tool for investors to influence company policies and practices. These resolutions can be an important impetus for change, as illustrated in this summary of 2012’s shareholder resolutions.

Corporate Governance

Political Spending and Lobbying Disclosure
Proposals submitted to 3MConocoPhillips, and UPS requesting better disclosure of lobbying activities including trade association memberships, payments, and decision-making processes received strong backing of 39, 25, and 17 percent, respectively. Two companies challenged similar Walden resolutions at the Securities and Exchange Commission (SEC): Walden prevailed at Devon Energy and the resolution received 31.3 percent support, but the SEC allowed J.P. Morgan Chase to omit the proposal based on its similarity to a separately filed political spending disclosure resolution. Resolutions at Johnson & Johnson and Target* were withdrawn through negotiation: Johnson & Johnson agreed to expand disclosure of lobbying priorities, activities, and oversight including through trade associations; Target also committed to improve disclosure of its lobbying policies.

Shareholder proposals went to Deere & Company and State Street** requesting comprehensive disclosure of political expenditures and an evaluation of political spending policies, processes, and oversight. Deere challenged the proposal on a technicality at the SEC and was supported. The resolution at State Street was withdrawn after the company agreed to expand its policy and increase disclosure of political spending.
A third set of proposals at three companies sought reviews of their role on the board of the U.S. Chamber of Commerce and other associations, including an assessment of the consistency of policies and priorities between the company and the trade association. Accenture was withdrawn after the company announced a new policy of no political spending with corporate funds. It also decided to add a senior manager to the Chamber’s Environment and Energy Committee as a forum to better express the company’s views. IBM received 10 percent support while PepsiCo was withdrawn to allow a lobbying resolution from another proponent to appear on the ballot. Dialogues are ongoing at all of the companies.

Sustainability/ESG Reporting 
For the third consecutive year Walden filed resolutions requesting comprehensive sustainability reports at C.R. Bard and Gentex and a second-year resolution was submitted to Emerson Electric. The vote results in favor were 30, 32, and 35 percent, respectively. We co-filed a new proposal that aims to increase transparency throughout company supply chains, asking Cisco Systems** and Oracle** to encourage their suppliers to publish sustainability reports. The annual meetings occur later in 2012.

Community Impact

Mortgage Loan Modification
A proposal to J.P. Morgan Chase** was submitted for a second year requesting improvements on loan modification policies and oversight, including mortgages serviced for others, and increased transparency on progress and challenges. Walden sponsorship was withdrawn due to a technical matter but other filers proceeded and the resolution garnered support of just 4.7 percent. However, the ongoing investor dialogue is constructive.

Environmental Impact

Climate Change Mitigation
For several years Walden has co-filed a proposal with ExxonMobil** requesting the adoption of quantitative goals to reduce greenhouse gas emissions from its products and operations. The results for 2012 demonstrate continued strong support with 27 percent of the vote in favor of the resolution.

Water Risk
Walden filed and subsequently withdrew a proposal asking Qualcomm to report on how it is assessing water risk in its supply chain and what action it intends to take to mitigate the impact of water scarcity on long-term shareholder value. Qualcomm is now engaged in a dialogue and we are providing input and identifying resources as the company begins its water risk assessment. A dialogue with Sysco* that began with the withdrawal of a similar proposal involves quarterly calls and the company has committed to complete the CDP Water questionnaire in 2013.


Inclusive Non-Discrimination Policy
Proposals requesting LKQ Corp. and Meridian Bioscience to amend their equal employment opportunity policies to include explicit mention of sexual orientation and gender identity or expression were withdrawn when they agreed to modify their policies.
To increase our impact Walden often joins others on collaborative efforts.
*In order, Walden co-led these resolutions with the following clients and other investors: Pax World, Trillium Asset Management.
**In order, these shareholder resolutions co-filed by Walden were led by: Trillium Asset Management, New York City combined retirement funds, New York City combined retirement funds, Presbyterian Church (USA), Sisters of Saint Dominic of Caldwell, N.J.