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Understanding Shareholder Materials for 2021 Proxy Season

If you own shares in any public company, you will soon start receiving materials for the 2021 proxy season. In preparation for upcoming annual meetings, companies will send out a dizzying array of documents. Those might include annual or semiannual reports, as well as proxy statements.  As we saw in 2020, companies are becoming increasingly politicized. It’s now in vogue for CEOs and Boards of Directors…
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The Wolf of Wall Street and the “Pigeon of San Francisco”

The biggest story on Wall Street for the last few weeks has been the dominance of the “little guy.” Stocks worth $6 per share a few months ago – most famously, GameStop – suddenly skyrocketed to over $360 per share. Incredibly, this had little, if anything, to do with a real shift in GameStop’s business or operations. GameStops are typically located in shopping malls; while malls were declining before COVID-19,…
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Politics Invades the Boardroom

There are several traditional barometers for measuring a company’s success. They include their profitability, the value customers derive from their products, and their delivery on promises to shareholders. But every year, those traditional measurements fall further and further down companies’ priority lists. That’s not a coincidence. For the past decade, political activist shareholders have sought to force companies to take up objectives more reminiscent of politics than financial success.
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For ESG, the Fewer Employees, the Better?

No one knows a company like its CEO. That should go without saying, but in the increasingly politicized world of shareholder advocacy, it’s a truth lost to a corporate culture of “wokeism.” CEOs, boards of directors, and other leaders of a company are being sidelined in favor of political actors offering shareholder resolutions. These activists use resolutions to pressure companies to take up their political preferences. Their preferences — things…
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When Companies No Longer Prioritize Shareholder Value

In 2019, almost 200 CEOs of major corporations issued a statement that their main focus is no longer on shareholder value. CEOs of BlackRock, J.P. Morgan, Amazon, and Bank of America were among those who envisioned a new corporate purpose. But their actions have consequences. As companies bow to political pressure, shareholders’ concerns have gone on the backburner. As we’ve discussed, that’s…
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Justin Danhof Responds to “Unconstitutional” Diversity Quota from Nasdaq

Nasdaq’s diversity quota made headlines for its prescriptive, centralized, and narrow definition of diversity. Justin Danhof, Director of the Free Enterprise Project at the National Center for Public Policy Research, called out the mandate. Not only is it illegal, it will adversely impact companies for years as they scramble to adhere to this arbitrary standard. Danhof makes…
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Is the Stakeholderism Debate Over? Here’s Why It Shouldn’t Be.

Just before Christmas, strategy + business declared stakeholderism the new corporate law of the land. They published a piece boldly entitled, “The stakeholder-shareholder debate is over.” Is it? And if is, is that a good thing? Fundamentally, stakeholderism isn’t a stand-alone philosophy on how to a run a business. Stakeholderism is really about opposition to Milton Friedman’s declaration on shareholder primacy. Friedman maintained that companies promote social good best when…
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Fight Corporate Cancel Culture: Vote With Your Wallet

From the pandemic lockdowns to rampant cancel culture, 2020 was a tumultuous year for American businesses. Shareholder activists have taken every opportunity to infiltrate corporations with their political agendas. Rightly so, American investors are on high-alert regarding the power of their dollar and their voice. Although 2021 is upon us, it’s clear small businesses continue to need our help to recover from last year. After voicing your vote…
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How BlackRock in the Presidential Administration Will Hurt Your Wallet

When it comes to setting the course on Wall Street’s priorities, not many firms can compete with BlackRock. The firm is the world’s largest asset manager, with $7.81 trillion in assets under management. It’s to be expected that they would be enormously influential in the corporate sphere. It’s somewhat more surprising to see BlackRock take on the role of issue advocate with increasing audaciousness. But that issue advocacy is…
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The Mandatory Diversity Quota from NASDAQ

Diversity is a trendier concept than ever, and corporate America is setting the course. Late last year, Nasdaq submitted a proposal to the Securities and Exchange Commission (SEC) to “enhance investor confidence.” As written, it would require companies to meet a diversity quota on their boards of directors. The proposal mandates that each company have at least two “diverse” directors: one who self-identifies…