BEST OF THE WEB
Shareholder Activism Propels Companies
Toward Inclusive Policies
Shareholder resolutions can
push companies toward or
pull them away from inclusive
workplace policies.
At Leggett & Platt’s annual
meeting in May, investors shot down
a proposal to amend the Carthage,
Mo.–based manufacturing company’s equal-employment-opportunity
policy to explicitly bar
discrimination based on
sexual orientation.
Leggett & Platt is one
of a shrinking number of
companies without such a
policy. Eighty-five percent
of Fortune 500 companies,
including 98 of the Fortune
100 (and all of The 2006
DiversityInc Top 50
Companies for Diversity),
bar discrimination based on
sexual orientation, according to the Human Rights
Campaign (HRC).
Additionally, 16 states,
the District of Columbia,
and more than 140 cities—
including places where
Leggett & Platt recently
has been hiring—have laws
prohibiting employment
discrimination based on the sexual
orientation of employees.
Walden Asset Management, the
socially responsive investment division of Boston Trust & Investment
Management, worked with
Community Church of New York,
The First Parish in Cambridge,
Manhattan Country School and
Women’s Equity Fund to present the
Leggett & Platt proposal. Walden,
which is committed to using its
leverage as an investor to improve
corporate social performance, has
been a Leggett & Platt shareholder
for more than 15 years and currently
holds about 288,000 (or 1. 6 percent
of the company’s) shares.
Editor’s Note: This article originally
appeared online on April 12, 2006
and has been updated.
BY T.J. DEGROAT
© 2006 DiversityInc
Walden’s tactic has worked in
the past. “Pro-equality shareholder
advocates have achieved enormous
success in convincing companies
that sexual orientation should not
be a factor in employment,” said
Daryl Herrschaft, director of the
HRC’s Workplace Project.
Trillium Asset Management,
for example, has pressed numerous
companies to adopt equitable policies, including Wal-Mart (one of
DiversityInc’s 25 Noteworthy
Companies for 2006), which
changed its policy in 2003.
DaimlerChrysler–No. 43 on
The 2006 DiversityInc Top 50
Companies for Diversity list–
General Electric, American
International Group and Johnson &
Johnson all have been targets of
shareholder actions and have opted
to change their policies, according
to the HRC.
The country has come so far
that most resolutions don’t make it
to a shareholder vote these days
because, Herrschaft said, “
companies are alerted to the issue and …
make the change before it ever gets
to the shareholder meeting.”
Walden has tried to convince
Leggett & Platt’s board of directors
to change the policy since 2003. A
shareholder resolution is filed only
after other efforts prove unsuccessful, said Meredith R. Benton, a
research associate at Walden.
“Companies now increasingly
have inclusive policies,” Benton
said. “So when we see companies
without one, it becomes a major
point of concern.”
Leggett & Platt spokesperson
Susan McCoy declined to comment,
but the company’s proxy statement
urged shareholders to vote against
Walden’s proposal, described as
“unnecessary because, in our policies and practice, Leggett is already
an equal-opportunity employer with
a firm and long-standing commitment to preventing discrimination
in the workplace.”
