The Department of Labor (DOL) is trying to dramatically reduce shareholder voting, especially for resolutions that address social, environmental, and corporate governance issues.
Under the DOL’s newly proposed rule, fiduciaries for 401(k) plans and pension funds would be pushed to vote against the best, long-term interests of investors by voting against shareholder resolutions on worker rights, human health, the climate crisis, pollution, and the disclosure of corporate political activity.
The DOL is clearly creating a hostile environment to dissuade fiduciaries from voting, and when they do vote, to simply side with management.
There is a brief public comment period for this proposed rule. Sign the petition by October 3rd to make your voice heard for corporate accountability:
Office of Regulations and Interpretations
US Department of Labor (DOL)
RE: Proposed Rule on Fiduciary Duties Regarding Proxy Voting and Shareholder Rights (RIN 1210-AB91)
We the undersigned, concerned individuals oppose the Department of Labor’s proposed rule, “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” (RIN 1210-AB91).
First, we wish to denounce the abbreviated time available for this comment period. A mere 30 days, instead of 90 days, serves only to suppress the participation of the public, investors, and other stakeholders in this review process.
We oppose the proposed rule because of the following:
Fact: There are Not too Many Shareholder Resolutions
The DOL claims the rule is needed because of too many shareholder resolutions on environmental and social issues. In fact, on average, only 13 percent of Russell 3000 companies received a shareholder resolution in any single year between 2004 - 2017. This comes to one resolution every 7 years. It is absurd to consider this a burden. Moreover, resolutions play a key role in helping companies identify risks before they become major problems.
Fact: Voting Shareholder Proxies is About Long-term Value
The rule’s requirement that fiduciaries calculate the economic gain of every shareholder vote is, frankly, absurd. Resolutions support the long-term value of a company by encouraging sound governance and responsible operations. Trying to calculate economic benefit of each vote would be a poor use of retirement plan assets; one would hope the DOL would work to prevent such nonsense and poor use of retirement plan assets.
Fact: Investors or their Fiduciaries Have the Right to Vote on Shareholder Resolutions
The DOL seeks to create a climate of fear about proxy voting, with the threat of regulatory investigation. This means fewer fiduciaries will vote, and more votes will follow management – rather than the best interests of investors and other stakeholders.
In closing, the DOL’s attack especially on social and environmental resolutions is irresponsible, dangerous, and out of step with commitments to sustainability that increasing numbers of companies and investors are making.
We therefore strongly recommend that this proposed rule be withdrawn.
Note: By completing this form, your name and state will be included in a document submitted to the Department of Labor via www.regulations.gov and will appear publicly.