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Shareholders do have an impact — sooner or later

Shareholders are becoming bolder about holding companies accountable.

At both the Southern Co. and Home Depot annual meetings this week, Donald Kirshbaum, an investment officer for Connecticut’s Treasury Office, was one of the shareholders introducing a proposal calling for both companies to put together an “environmental assessment report” for those holding shares.

(Interestingly enough, Home Depot CEO is a director of the Southern Co., but he was unable to attend Wednesday’s meeting at Callaway Gardens because he was preparing for his annual meeting today at the Cobb Galleria.

Kirshbaum said shareholders needed a “more detailed energy efficiency plan” as a way for the company to become more transparent to its constituents.

Although Blake said that his board was recommending shareholders to vote against the proposal, he said that the company already is implementing a host of energy efficiency measures as well as instituting green building practices.

Another shareholder proposal at Home Depot’s meeting was submitted by Susan Baker, a social research analyst with Trillium Asset Management in Boston.

Her proposal asked the company to produce an “Employment Diversity” report for shareholders.

Because the company already must prepare much of the data for the U.S. Equal Employment Opportunity Commission, Baker said the company should be able to make that information availabe “at a minimal cost.”

She also said that several other major corporations do provide diversity reports with detailed information — including Wal-Mart, IBM, Intel, Merck and Coca-Cola.

Again, Blake said the directors recommended to shareholders to vote against that proposal. The proxy stated the company “does not believe adoption of this proposal would enhance its commitment to equal opportunity in any meaningful way.

Home Depot does seem to be doing a pretty good job with diversity at its highest ranks.

Bonnie Hill, an African-American woman is the lead director of the company, following the retirement of Ken Langone a year ago.

After Blake, the second highest paid executive at the company is Carol Tomé, Home Depot’s chief financial officer and executive vice president of corporate services.

And another executive vice president, Marvin Ellison, who is in charge of all U.S. stores, is African-American.

According to company insiders, both would be among a handful of executives considered to be a candidate as the next CEO. In fact, the only other executive vice president of the company is Craig Menear, who oversees merchandising.

During the annual meeting, Home Depot received kudos from shareholders for its diversity practices.

Shareholder John Evans, an African-American, specifically mentioned Ellison’s executive role with the company.

“It means a lot to us in the community,” Evans told Blake during the question-and-answer period.

Shareholder proposals, which almost never endorsed by company directors for annual meetings, do have an impact over time.

Back in the 1990s, environmentally-focused shareholders urged the company not to buy wood from old-growth forests around the world.

I remember then CEO Bernie Marcus getting a bit annoyed by the demands being placed on the company by the environmentalists.

But they did have an impact. Suzanne Apple, a former Home Depot executive who helped implement a far-reaching company policy to quit buying wood from old growth forests, said the efforts by environmentalists helped speed up that process.

While not a shareholder proposal, today’s meeting brought up many questions about the role that Home Depot and its suppliers are playing in building proposed dams in Chile. Those dams would “flood rare forest and destroy pristine river ecosystems,” according to shareholder Gary Hughes.

So what happens to all these shareholder concerns?

“Our board spends a lot of time going trhough propsals and talking to shareholders,” Blake said. “What you don’t see is that a lot of the things that shareholders propose, the company actually ends up implementing.”

Maria Saporta

Maria Saporta, Editor, is a longtime Atlanta business, civic and urban affairs journalist with a deep knowledge of our city, our region and state.  Since 2008, she has written a weekly column and news stories for the Atlanta Business Chronicle. Prior to that, she spent 27 years with The Atlanta Journal-Constitution, becoming its business columnist in 1991. Maria received her Master’s degree in urban studies from Georgia State and her Bachelor’s degree in journalism from Boston University. Maria was born in Atlanta to European parents and has two young adult children.


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