E1-Pilot: Shareholder Activism with Bruce Herbert
Updated: Dec 10, 2020
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Shareholders own stock which gives them a voice in company shareholder meetings. When the company is growing and performing well, they win. As minority or majority owners of that company, shareholders can leverage their position to enact change within the company. Bruce Herbert’s company, Newground Social Investment, views the role of the shareholder holistically. They look for ways to use their leverage to push companies away from narrow, short-term financial goals to consider the financial and social risks associated with corrupt behavior. Reputational damages, humanitarian issues, and a whole host of other consequences can cost shareholders a whole lot more than they would gain in the short term, and often have a detrimental effect on society’s most vulnerable populations.
Bruce: “We’re in the business of transformation; of helping companies perform better on a whole array of social and environmental inequity and justice issues while also performing more profitably and successfully in the long haul”
This year, due to the Covid-19 pandemic, shareholder meetings have gone virtual. This opened the door for celebrities and activists, who wouldn’t usually travel for these events but were interested in getting involved, to make their voices heard at these meetings through video presentations.
Chevron, one of Newground’s investments, got involved in a $9.5 billion lawsuit in Ecuador when their legacy company, Texaco, dumped 18 billion gallons of toxic waste water and 17 million gallons of crude oil in the Ecuadorian rainforest on indigenous land. The lawsuit, which has gone on for years and cost Chevron an estimate of $2 billion in legal fees alone, has seriously damaged the company’s reputation and more importantly, severely harmed the indigenous community in Ecuador. When Bruce’s team went to the Chevron shareholder meeting this year, they brought some notable guests for some noteworthy sound bites.
Actor Alec Baldwin: “Chevron seems like the Harvey Weinstein of petroleum companies and shareholders should be terribly concerned about a corporate strategy that appears to depend on luck not running out.”
Nobel Laureate Jody Williams (and WDIP S1 guest!): “Apparently shareholder money and reputation is not the focus.”
Pink Floyd’s Roger Waters: “I try to be a voice for the voiceless and in this case the voiceless are 30,000 indigenous people in Ecuador.”
Bruce also discusses examples of incentivized sustainable farming practices for fast food companies like McDonald's and Burger King and a bunch of other good stuff!