Two of the leading shareholder-advisory firms are on opposing sides of a new investor proposal: racial audits.
Shareholder resolutions filed with
Glass Lewis and ISS clients include managers of the largest pension plans and investment funds, and the proxy-advisory firms provide guidance on thousands of shareholder resolutions each year. Investors, including the New York State Common Retirement Fund, CtW Investment Group and Service Employees International Union,
Glass Lewis has broadly said conducting the audits would help companies reduce risks of high-profile controversies that may result in customer and employee attrition, regulatory inquiries and significant fines. “Given broad societal changes, it is particularly important for consumer-facing companies,” which depend on their customers’ trust and loyalty, “to address issues of racial equity,” the firm writes in its reports.
ISS says racial audits aren’t warranted because companies are taking “sufficient meaningful actions” to address racial inequities such as expanding opportunities for people and communities of color, as well as improving the diversity and inclusion of its workforces.
Subodh Mishra, a spokesman for ISS, said the firm doesn’t comment on specific resolutions beyond what’s in their reports.
“It isn’t unusual that Glass Lewis’s analysis and recommendations differ from other proxy advisers’ given that each firm independently reviews proposals based on unique voting policy guidelines,” said Jennifer Thompson, a Glass Lewis spokeswoman.
In one case, ISS and Glass Lewis both recommended that investors vote against a racial audit at
ISS and Glass Lewis haven’t made their recommendations yet on Amazon’s resolution. The company wants shareholders to reject a racial audit.
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