I’ll bet you think that one of the perks of being a shareholder in a corporation is the power to express your displeasure about corporate policies and vote to replace directors if you’re unsatisfied with their performance. If you’re under this impression, then you’re legally right. But judging by recent actions at the big oil companies, you’re only right in practice if you express opinions with which top management agrees and – heavens forbid – you’re not trying to speak for the people who are dispossessed and impoverished by the corporation’s operations.
Until today, I thought Chevron was the only oil company that had gone beyond the now-familiar practice of ignoring the complaints of communities affected by its operations, and had become so arrogant as to suppress the dissenting views of its own shareholders. (Last year in May, representatives of communities around the world were turned away, threatened, and in some cases arrested despite holding valid proxies executed by Chevron shareholders that authorized them to enter the meeting, speak to the assembled shareholders, and vote on their behalf.)
Then I read that BP, too, had excluded shareholders from its annual meeting this week. The article does not explicitly say which shareholders were excluded, noting only:
Outside the Excel convention center in the east of London, about 30 people, including fishermen from the United States, gathered to protest BP’s role in the oil spill. They banged drums and held up banners. Some shareholders were refused entry to the meeting, Mr. Svanberg said, because they appeared to have a plan to disrupt the meeting.
But the implication is clear – shareholders who may have intended to speak out about BP’s responsibility for the Deepwater Horizon spill last summer were denied their right of entry on suspicion that they were attending not to exercise shareholder rights but rather to protest.
Of course, this distinction between shareholder and dissenter is just plain wrong. The whole reason corporations hold annual meetings is to report to their shareholders and give them an opportunity to raise questions on topics of concern and vote on changes in directorship and corporate policy. Speaking out on issues of social justice – which clearly affect companies’ bottom lines and long-term margins, whether they want to recognize it or not – is a form of exercising ownership, a means to persuade other shareholders to act to protect their proprietary interest in the company. Would you deny a registered voter the right to cast her ballot simply because she planned to make an anti-war speech before entering the voting booth?
What if someone had managed to speak out at BP’s 2010 AGM and persuaded other shareholders to require company to review safety procedures on its offshore oil platforms? That could have avoided an environmental catastrophe in the Gulf of Mexico and saved shareholders tens of billions of dollars, but probably would have led to the sacking of top executives and directors in the company. What if a proxy holder had gotten into Chevron’s AGM last year and convinced shareholders that the company should publish all its payments to governments? That would have shed light on rampant corruption and misdirection of funds that could be used to better the lives of ordinary people, boosted the company’s reputation, and alleviated costly struggles with local communities, but it would have led to thorny questions about the policies espoused by Chevron’s leadership. Instead, the world’s biggest companies increasingly shut out the voices their top brass don’t want to hear and continue with business as usual.
Corporate directors might argue that except for what’s required by law (if they can’t get the law changed, that is), it is not their job to preserve the environment or address the impacts their operations have on communities. They have to answer to their shareholders, for whom the bottom line is profit. But this assumes that a) socially responsible operations are less profitable, and b) shareholders only care about maximizing their financial profit. Even if the former were true (which it’s not), it’s clear that Chevron and BP’s directors ensure that they hear only the latter if they actively exclude those who disagree and intend to speak out about it.
All of this raises a troubling question: if Chevron and BP’s top executives aren’t acting in their shareholders’ interest, then to whom are they actually accountable besides themselves? And in an age of skyrocketing energy prices, unprecedented environmental catastrophes, and rapid disappearance of indigenous cultures, can we really say that the immensely promising – yet potentially destructive – power that has been entrusted to these guys is in safe hands?