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Déjà Vu All Over Again: 200 Years of Shareholder Suffragism Proxy Battles

John Trumbull, General George Washington Resigning His Commission, 1824. As U.S. states continue to fight against climate change action focusing on limiting shareholder rights, we are reminded that what is old is new again as shareholder suffragism fights in the U.S. are over 200 years old.


Climate risk is here, it is real, and it is causing major economic damage. It is considered the number one global risk according to the World Economic Forum. We have prudent science that the climate crisis is ‘unequivocally’ caused by human activities, stated the world’s climate scientists in their recent IPCC update. And in 2023, in the U.S. alone, there were 28 separate billion-dollar disasters made worse because of climate change.

With climate litigation cases reducing the value of companies by 0.41% on average and an unfavorable court decision by 1.5%, U.S. states are threatening and suing companies such as Responsible Alpha and BlackRock to stop our fight against climate change.


Responsible Alpha may be small, but we are mighty and we are not backing down.


While The Conference Board reports that “climate-related shareholder proposals continue to dominate environmental proposals, but support has declined dramatically, from 35% in 2022 to 21% in 2023”, they also report that “49% of surveyed CEOs globally say the transition to renewable energy will be significantly positive for their organizations.” In fact, 101 climate-related and 17 climate-lobbying related proposals were filed in 2023.


Bloomberg data shows that shareholder ESG proxy resolutions, even when not adopted, move the needle, based on Bloomberg analysis of ESG scores for 888 companies in the Russell 3000 post-proxy votes.


And proxy voting is a keyway for shareholders to influence corporations to adopt stronger climate mitigation and adaptation policies.


The proxy voting process is a mechanism core to standard corporate governance by which shareholders monitor corporate managers. This process enables shareholders who own the company to hire / replace corporate directors and ask the company they own to address specific corporate policies, e.g., not addressing climate risk.


Proxy voting was strengthened in the U.S. 90 years ago in the 1934 Securities Act that the U.S. Congress passed to address issues that led to the Stock Market Crash of 1929 which precipitated the Great Depression.


Proxy voting was again updated in 2003 to require mutual funds to transparently disclose their proxy voting after the U.S. corporate scandals of 2001-2002, including the implosion of the energy / coal trader Enron.


The current official term for the proxy document is Form DEF 14A. The DEF stands for “definitive” as is required under Section 14(a) of the Securities Exchange Act of 1934. It is logical why proxy forms are called “DEF 14A”.


This is why shareholder voting rights have been core features for both the U.S. public and modern public companies since the early 1930s.


Yet the history of shareholder suffragism predates the 1934 Securities Act by 100 years. From 1825 to 1835, more than 38% of a sample of 1,200 U.S. corporate charters allowed for one vote one share.


In fact, at this time, it was common to have prudent mean voting rules where shareholders with outsized holdings would vote on a less than one vote one share mechanism.

For example, in the state of Virginia in 1837,


“Stockholders shall be entitled to one vote for every share owned by them respectively, up to the number of fifteen inclusive, and to one additional vote for every five shares from fifteen to one hundred, and to one additional vote for every twenty shares over and above one hundred.”


Concerns to protect minority shareholders continued to be at the forefront where from 1870 to 1900 many states allowed cumulative voting rights, which supported small shareholders the ability to gain access to more information.


Even in the retrograde 1950s, “shareholder democracy” led by Lewis Gilbert and his famous moniker at the time as “Minority Shareholder #1” was presenting fair and open proxy voting as a cornerstone of U.S. democracy.


In essence, plutocrats and plebians were granted the same rights two hundred years ago, with obvious glaring historical exceptions regarding race, gender, ethnicity, and property ownership.

By 2021, nearly half of American households owned a mutual fund where their intentions could be addressed using proxy voting. 


In the face of mounting challenges and legal threats, Responsible Alpha stands firm in our commitment to combat climate change through shareholder activism. As the echoes of shareholder suffragism reverberate through history, our small but resilient consultancy remains unyielding. Climate litigation may cast a shadow, but Responsible Alpha is undeterred, embracing the power of proxy voting to push corporations toward robust climate policies. In our pursuit of sustainability, we echo the legacy of shareholder democracy from two hundred years ago, bridging the past and present to assert that every shareholder, regardless of their holdings, plays a crucial role in shaping a sustainable future.



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