In Spite Of The Long Odds, 'Tis The Shareholder Resolution Season
It's becoming more common for shareholders to try to force companies to be more socially responsible through resolutions that are presented at annual meetings for a shareholder vote. But the whole effort is like "tilting at windmills," says Dennis Sheehan, professor of finance in Penn State's Smeal College of Business.
UNIVERSITY PARK, PA--It's becoming more common for shareholders to try to force companies to be more socially responsible through resolutions that are presented at annual meetings for a shareholder vote. But the whole effort is like "tilting at windmills," says Dennis Sheehan, professor of finance in Penn State's Smeal College of Business.
"The odds of getting a resolution accepted and passed are extremely low," says Sheehan, who researches corporate finance issues.
These proposals appear in the proxy statement and are presented at the annual meeting for a shareholder vote. Although they are not binding if they pass, resolutions may address social issues or how corporations run themselves.
He notes that this is the shareholder resolution season. "Shareholder resolutions are voted on during annual meetings. Since a large number of corporations hold those meetings in April and require these resolutions to be submitted at least four months in advance, this is the rush time for shareholder resolutions."
