Shareholder Advocacy With Chris Meyer

Show Notes

“Put on the whole armor of God, that you may be able to stand against the schemes of the devil.”  Ephesians 6:11

Chris Meyer is Manager of Stewardship Investing Advocacy and Research at Praxis Mutual Funds,  an underwriter of this program. 

What exactly is shareholder advocacy and how does Praxis do it?

• Many people begin by screening or avoiding certain industries or companies based on their values.
• Screening is a valid approach but has limited power to create real change.
• Praxis uses seven different impact strategies for investments.
• Shareholder advocacy is one of these strategies, leveraging ownership rights to drive change.
• Shareholder advocacy includes activities like writing letters, filing proposals, and engaging in dialogues with company management.
• The goal of shareholder advocacy is not to chastise or embarrass companies but to encourage profitability while also promoting positive impact.
• Praxis collaborates with other investors, primarily from the faith community, in their advocacy efforts.

How does Praxis work with many other investors, especially the faith community, to advocate for Christian values? 

• Collaboration with others significantly enhances the impact of their work.
• Coalition efforts with various faith-based institutional investors broaden and deepen their reach.
• Companies are more receptive when approached collectively by a coalition.
• Collaborations focus on common interests and shared capacities.
• Example: Praxis collaborates on human rights and child labor issues, while others may focus on pharmaceutical companies and medication affordability.
• Praxis takes leadership roles in some engagements and partners actively in others.
• Prioritization of issues and companies is essential due to limited resources.

What kind of preparation goes into this type of engagement? 

• Engagement preparation involves issue prioritization and collaboration with investor partners.
• Teams are formed, leadership structures are established, and goals are set.
• Education and strategy sessions, both in-person and virtual, are organized to become well-informed about relevant topics.
• External expertise is often brought in to enhance understanding.
• Example: Engagement with Target and Walmart on human rights and child labor issues.
• Focus is on encouraging robust human rights policies and supply chain enforcement.
• Pre-engagement research includes reviewing company publications, reports, and industry news.
• Input from human rights experts and NGOs is sought to understand global supply chain issues.
• Thorough preparation is crucial for gaining understanding and credibility in engagement with companies.

If company dialogues are central to real change, what do these engagements look like, and what makes an effective conversation or dialogue with a company?

• Meaningful dialogue with company management is the pinnacle of shareholder advocacy for impactful change.
• Engagement usually starts with an investor letter outlining concerns and requesting dialogue.
• Initial communication may be with investor relations and corporate counsel.
• The goal is to engage with decision-makers overseeing the relevant issue, often vice presidents.
• Dialogues are typically in-person or via video conference, lasting one to two hours or longer.
• Building strong, trusting relationships is crucial.
• Success comes when companies see a vested interest in their future success and the relevance of the concerns raised.

So what is the end game? How do you know you've been successful in making meaningful change in supportive kingdom values in these engagements?

• Setting clear goals and ways to measure success is crucial in advocacy.
• Having a vision of the desired outcome of the dialogue is important.
• Long-lasting engagements can lose meaning without a clear endpoint.
• Avoid being seen as a nuisance by the company or becoming their free consultants.
• Common scenarios for ending dialogues include a company refusing to engage or dismissing concerns.
• In the best case, all goals are met or exceeded, and the engagement transitions to a monitoring phase to ensure commitment follow-through.

Learn more about Praxis at PraxisMutualFunds.com.
 

On today’s program, Rob also answers listener questions: 

• Is there a more affordable way to handle the Medicaid paperwork and power of attorney, given limited financial resources?
• What’s the best way to invest for a child’s future? 

Remember, you can call in to ask your questions most days at (800) 525-7000. Faith & Finance is also available on the Moody Radio Network as well as American Family Radio. Visit our website at FaithFi.comwhere you can join the FaithFi Community, and give as we expand our outreach.