by Michal Connor
A group of investment organizations with about $43 billion in assets under management has sent letters to 35 major companies represented on the board of the U.S. Chamber of Commerce, urging company managements “to evaluate their role and to assess the risks and benefits of Board membership.”
The investors cited what they say are the “significant risks posed by misalignment between company and Chamber policy objectives.” Of particular concern, they said, are the Chamber’s “obstructive positions on climate change legislation, the healthcare and financial reform bills enacted in 2010, and most recently… its partisan political spending reported to be $75 million in the 2010 elections.”
The open letter was led by Walden Asset Management, a division of Boston Trust & Investment Management Company. The investor coalition includes investment firms, mutual funds and religious investors as well as Common Cause and the AFL-CIO.
Adam Kanzer, General Counsel at Domini Social Investments, one of the signatories to the letter, said: “The Chamber claims that its board members set policy, and yet the Chamber’s policies often directly contradict the policies of the companies serving as board members. We’re asking companies to face these contradictions and address them. If they tell investors that a particular policy objective is important to the business, we think it is fair to ask why the Chamber is working to achieve the opposite outcome. As the Chamber commences an aggressive program challenging new and necessary regulation, being a silent or passive member of the Chamber Board is not responsible governance.”
In the letter to the companies, the investors said:
“We believe that the Chamber bases its advocacy on a general belief that regulation is bad for business while deregulation is good for citizens. CEO Tom Donohue stated that the Chamber will “continually tell the story to the American people about the massive costs of excessive regulations—a tax, if you will—on jobs and on their personal and economic freedom.” As long-term investors, we disagree strongly with this premise. Without a doubt deregulation was a major contributor to the financial crisis as was lax regulation in the disastrous Deepwater Horizon blow out and oil spill in the Gulf of Mexico and the Massey Energy mine blast. The sustainability of our ecological systems, our communities and our financial markets certainly cannot be achieved without effective regulation.”
The letter was sent to the following companies: Accenture, Alcoa, Allstate, Anheuser-Busch Companies, A.O. Smith Corp., AT&T, Caterpillar Inc., Charles Schwab Corporation, ConocoPhillips, CVS/Caremark Corporation , Deere & Company, Dow Chemical Co., Duke Energy Corp., Eastman Kodak Company, Emerson Electric Co., FedEx Corporation, International Business Machines Corp., JPMorgan Chase & Co., Lockheed Martin Corporation, 3M Company, Melaleuca Inc., New York Life Insurance Company, Peabody Energy Corp., PepsiCo Inc., Pfizer, Inc., Ryder System Inc., Southern Company, Spencer Stuart, State Farm Insurance Companies, The Travelers Companies, United Parcel Service, Verizon Communications Inc., WellPoint Inc. and Xerox Corporation.
According to the investor group, a number of major companies have in recent years addressed the Chamber policy “misalignment” by leaving its Board or withdrawing from the Chamber altogether. “In recent years, Nike withdrew as a Board member and Apple, Exelon and PG & E, among others, resigned as members of the Chamber over its climate change position,” the investors said. “Other companies have stated publicly that the Chamber does not speak for them on critical issues or declared that their dues cannot be used for lobbying or political spending purposes.”