Stakeholder Engagement: Who's listening?
The ongoing discussion regarding the recent Shell settlement I blogged about last week is inspiring to say the least â with Shell executives joining in and a bevy of CSR enthusiasts challenging them to clarify exactly what has been done to both disassociate from corrupt government practices/human rights abuses along with the executives who were calling the shots when Saro-Wiwa and others were killed.Â It is a unique chance to directly dialogue, and those at the table are doing a great job of framing questions in a direct, but also respectful way.
Apparently not all companies are open to receiving such inquisitions, even from their own shareholders.Â At the recent Exxon Mobil annual meeting shareholders were given precise three minute intervals to voice ideas and concerns, with virtually no response offered by Exxon Mobil executives.
The article asks all the right questions so I'll let the original author do the talking: One of the great questions surrounding corporate governance is why the big institutional shareholders, which tend to vote in support of management, go along with such a sham. Why do they not act as responsible owners and insist that management take shareholder democracy more seriously? They typically leave attendance at annual meetings to activists and trade-union shareholders, which in turn gives corporate managers the excuse they need to not take the meetings seriously. The fact that the meetings are dominated by groups pursuing their own obsessions (labour practices in the developing world, say, or disinvestment from dodgy regimes) is also used by management to argue against reforms that would make them more accountableâsuch as making it easier to nominate candidates for the board or to force a vote on executive pay.
Still, perhaps there's hope:Â âYet it does not have to be this way. Last month shareholders flocked, as usual, to the annual meeting of Berkshire Hathaway, an event that has become known as âWoodstock for Capitalistsâ. This year, Warren Buffett, the firmâs boss, invited some leading journalists to pose questions to the management for the first timeâan idea that other companies would do well to copy. Indeed, given the grievous errors many bosses have made, and the publicâs loss of faith in them, it would do them no harm to pay a bit more attention to what their critics say.â
JustMeans is an opportunity for us all to be critics, though we're also tasked with taking our opinions far beyond the borders of this website and into the boardrooms that make the world go round.Â In light of this article I think it's especially significant that Shell executives have joined a discussion hosted by those outside of their fold when their competition appears unwilling to cater even to those that keep their share price up.Â I have a feeling a fair amount of the JustMeans community's beckoning played a role in Shell's participation - but either way, we'll take it!
I also wanted to point out Shell's sustainability report which Bjorn Edlund (Global Head of Communications from Shell) referenced in relation to disassociating with those executives who break the company's codes of conduct.Â Let me know if you find any of these references, my Kenyan internet is slooooooow tonight.