Last week, the KLD Blog considered efforts by both shareholders and the Obama Administration to curb executive pay. Investors such as Walden Asset Management have actively sought management support for non-binding advisory votes on executive compensation.

For a closer look at investors’ thinking on “say on pay,” Walden Executive Vice President Tim Smith has shared the text of his February 5 letter to “Colleagues in the Business Community.”

(read more…)

This week, many national headlines describe an issue that has long engaged the social investment community. President Obama has announced new limits on the pay of bank executives “just days before” another round of Federal investment in banks, reports the New York Times. His announcement follows news of Merrill Lynch rushing big bonuses to its executives, even as bailout recipient Bank of America took over the failed brokerage.

In his Feb. 5 comments, the President said that “what gets people upset — and rightfully so — are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.”

(read more…)

In his first week in office, President Obama proposed major overhauls of environmental and financial regulations. These changes have long been championed by investors concerned with companies’ environmental, social and governance (ESG) performance, and few were surprised that a new regime has brought a new policy agenda.

In this time of recession and scandal, however, some familiar faces in American business – including former SEC Chairman Harvey Pitt and Wal-Mart’s Lee Scott – are also setting a different tone. Mr. Pitt has announced ten lessons that investors should learn from the current crisis, while Mr. Scott has committed the world’s largest retailer to “a sustainability program to remake the entire company.” These are welcome moves, but ESG investors should ask whether this new attitude will outlast today’s crisis mentality.

(read more…)

[Note from the Editor: Gary Moore was a senior vice president of Paine Webber before founding his own firm as “counsel to ethical and spiritual investors.” He has written five books on the ethical management of money and has been a financial commentator for UPI. He has very graciously permitted us to post his perspective on the Madoff case. Also see a link to his organization at the end of this article. The following is Mr. Moore’s work. – AP]

Bernie Madoff has apparently perpetrated a fifty billion dollar Ponzi scheme that has devastated investor confidence, as well as several charities in Palm Beach. A hedge fund operator in my hometown of Sarasota has apparently perpetrated another swindle of three hundred and fifty million dollars. It too has affected hundreds, as well as the Y on whose board I serve, and several other charities. The more things change…

(read more…)

The day after the Inauguration, the Wall Street Journal marshaled an impressive array of leaders – from Newt Gingrich to Al Sharpton to The Nation’s Katrina vanden Heuvel – to give advice to the new President. The sustainable and socially responsible investing (SRI) community has also recently offered its counsel on investing, corporate governance, and health care policy.

The Social Investment Forum called for “New American Leadership” on many of these issues in a comprehensive January 14 letter to the incoming Administration. For a concise summary of the six-page letter, see this article in Financial Advisor.

(read more…)

On October 22, in Beijing, Wal-Mart convened a “global supply chain summit.” The Wall Street Journal reports [subscription required] that the giant retailer is unveiling new environmental and labor standards for its suppliers, and that third-party auditors will help enforce the new rules.

This new commitment was driven, in part, by social investors and corporate social responsibility activists that have long studied and publicized Wal-Mart’s practices. As in the case of predatory lending, the corporate response to activists’ “early warning system” was far from prompt. The Journal notes:

(read more…)

The global financial crisis has happened fast, and investors and governments have struggled to keep up. Not everyone has been surprised by the events of recent weeks, however. Some members of the socially responsible investment (SRI) community operated an “early warning system” for investors.

No, they haven’t said “I told you so.”

(read more…)