Who’s the Boss?

Shareholder activists want more say in how American companies are run.

While pharmaceuticals companies do sell their AIDS medications wholesale in some poorer nations, the cost still works out to hundreds of dollars per year — well beyond the reach of most of those afflicted. Activists at the ICCR would like to see the companies give up their HIV/AIDS drug patents in emerging markets, allowing local companies to make generics. So far, ICCR officials say they’ve met with stiff resistance. “It’s a huge dilemma for them — making a profit versus the ethical issue,” grants Daniel Rosan, ICCR’s program director for public health. “But our campaign is about saving lives and protecting the interests of shareholders.”

Despite long odds, the ICCR has had success. This year, the group submitted a shareholder proposal to The Coca-Cola Co., asking executives to study the effect of HIV on growth projections. The resolution received a 98 percent yes vote. Bergkamp, a professor at Friend’s University in Wichita who headed up the campaign at Coke, believes consumer-goods companies can use their marketing expertise to help educate the poor about AIDS. She would also like to see Coke put its supply-chain expertise to use. “Part of their strength is their distribution system,” she says. “We can use that system to distribute medicine.”

And how do powerful executives react when they find out they’ve got a 9:30 meeting with Sister Vicki? “Sometimes they approach us with a little trepidation,” admits Bergkamp. That’s understandable. While she says that most of her corporate sit-downs are convivial, “10 to 15 percent of our meetings do get confrontational.” —J.G.

Your View
Findings from CFO’s survey of 105 finance executives.

A Vote Too Far?
What is your opinion of the efforts shareholder activists (Calpers, ITAA-CREF, ISS, etc.) have made during this year’s proxy season to improve corporate governance?
They have gone too far
55%
They have not
gone far enough
17%
They have done just enough
17%
No opinion
8%
Other
4%

Time-consuming
Compared with last year, are you spending more or less time on share holder issues (meeting with shareholders, responding to shareholder requests, etc.)?
More time
53%
Less time
0%
No change
47%

Attention Deficit
Do you think that shareholder activists are distracting your management and board from the task of running the business?
Yes
56%
No
39%
No opinion
5%

A Knowledge Gap
How familiar do you think shareholder activists are with the fundamental issues of your business?
Very familiar
6%
Somewhat familiar
44%
Not familiar
50%
Not sure
1%

Best Practices?
How do you think that adopting the corporate-governance practices advocated by pension funds such as Calpers would affect your company’s ability to create value?
It would improve our ability to create value
11%
It would reduce our ability to create value
42%
It would have no effect
33%
Not sure
14%

Discuss

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