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As Microsoft shareholders we support transparency and accountability in corporate electoral spending, including the indirect political spending that is the subject of this proposal. Misaligned or non-transparent funding creates reputational risk that can harm shareholder value. It can also place a company in legal jeopardy. Unless a company knows which candidates and political causes its funds ultimately support, it cannot assure shareholders, employees, or other stakeholders that its spending aligns with core values, business objectives, and policy positions. Without the information requested by this resolution, none of the board, senior management, or shareowners can assess the risks associated with political spending.
The risks are especially serious when giving to trade associations, Super PACs, 527 committees, and “social welfare” organisations – groups that routinely pass money to or spend on behalf of candidates and political causes that a company might not otherwise wish to support. The Conference Board’s 2021 Under a Microscope” report details these risks, discusses how to effectively manage them, and recommends the process suggested in this proposal.
At its core, lobbying is a way for citizens and corporations to make their voices heard by the government when it passes laws and legislations that affect them. However, a company’s spending on corporate political activity is difficult, if not impossible, to track without voluntary disclosures from the company. Often, a company’s lobbying efforts are aimed in direct contrast to their stated mission and values.
One such example is Microsoft’s stance on the overturning of Roe v. Wade. After the ruling, which states that the constitution generally protects the right to choose an abortion, was struck down, Microsoft came out in support of its workers by saying it will cover employee travel expenses for abortions. However, despite this apparent stance in support of abortion rights, the company has a decades-long history of funding conservative rightwing politics. This is a key illustration of how companies, like Microsoft, have the power to influence policies that extend far beyond just their own business interests.
Corporations usually provide financial support to certain candidates, political action committees (PACs), ballot measures, or other similar organisations to aid them in their long-term goals or to push public policies that align with their business strategy. However these expenditures, aimed to promote a company’s financial returns, can end up at odds with the company’s stated values. In this example, Microsoft has taken no responsibility for policies their funding has ended up supporting. This not only flies against company values, it can also stand to alienate their customer base and damage Microsoft’s brand reputation hurting the long-term value for shareholders.
When consumers make their spending decision, they are increasingly looking at the ESG values of their purchases. In particular, over 40% of consumers consider authenticity very important when making purchase decisions. Thus, putting people before profits and being transparent in business operations makes a key difference for consumers. With the evolution of social media, it is increasingly possible for activists to track down Microsoft’s spending. Irresponsible lobbying can hence negatively impact the company in the long term.
With this proposed model code, however, Microsoft can continue to make its voice heard on legal matters without alienating its stakeholders. Furthermore, by agreeing to be more transparent regarding lobbying practices and considering the potential side effects, the company stays true to its own values as well.
Microsoft has spent $10.2 million on lobbying the federal government in 2021 , an 8% increase from the previous year. Customers and shareholders, who at the base level provide this funding, have a right to know that this is being done properly and not against values Microsoft markets itself to follow.
We won’t know the exact date of Microsoft’s next AGM until they release their 2023 proxy statement, but based on last year’s dates we expect the 2023 AGM to be held sometime around 30th November 2023.
The record date pertains to the date by which investors must hold their shares in a company in order to participate in the company’s AGM. We won’t know Microsoft’s 2023 AGM record date until they release their proxy statement, but based on last year’s dates we expect it to be sometime around 12th October 2023.
Voting at the AGM
If you hold Microsoft stock before the next AGM record date, you will be eligible to vote at the next Microsoft AGM and receive an email from us nearer the time.
What is shareholder activism?
Shareholder activism is when shareholders use their influence as owners of a company to effectuate change within the organisation.
What is Tulipshare?
Tulipshare is an sustainable investment fund and shareholder advocacy group on a mission to help investors push for stronger environmental and social commitments, using corporate governance to create a positive impact and ensure the companies we invest our money in are being responsibly managed by accountable leadership.
How does Tulipshare improve sustainability through investing?
Tulipshare addresses issues pertaining to climate change, human rights, racial and gender equity, political spending and operational transparency within some of America’s biggest publicly traded companies - issues that if left unaddressed could expose a company and its investors to significant legal, reputational and financial risks.
Over the past year, J&J agreed to remove talc from Johnson's Baby Powder on a global scale; investors have shown strong support to improve the ongoing injury crisis at Amazon through an audit of Amazon's warehouse working conditions, and Apple improved its right to repair policies along with its transparency reporting regarding App Store takedowns.
Johnson & Johnson
Tulipshare’s biggest success to date was a proposal at Johnson & Johnson (J&J) demanding that the company stop the sale of their talc-based powder globally due to its links to multiple cancers. Following J&J’s AGM in 2021, the multinational corporation confirmed they will be taking the talc-based powder off the shelves worldwide.
At the beginning of 2023, Tulipshare, alongside a coalition of investors, reached a successful agreement with Apple, which saw the world’s largest company commit to enhancing their reporting on App Store takedowns.
After a series of productive conversations with Salesforce, Tulipshare reached an agreement to withdraw our shareholder proposal looking for a third party racial equity audit due to the company demonstrating a stronger commitment to diversity, equity and inclusion, and its reporting efforts on those matters.
Tulipshare also reached an agreement with Capri Holdings, owner of Jimmy Choo, Michael Kors and Versace, for the company to undertake measures to address concerns related to the protection, rights and livelihoods of workers across all of their supply chain tiers.
Last year, Tulipshare led a campaign among Amazon shareholders looking to ensure fair and safe working environments for the company’s warehouse workers. We recommended that Amazon provide an independent audit of the working conditions and treatment that warehouse workers face. We garnered 44% of shareholder support for our proposal.
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