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"Corporate philanthropy is good for business,"
actor Paul Newman wrote in a recent Wall Street Journal commentary.
"All significant stakeholders in a company's success -- shareholders,
employees and customers -- are positively impacted by structured
and focused corporate philanthropy initiatives."
Not all on the same page
On the other hand, some shareholder activists may question the altruistic
motives of corporations and demand that they abandon such ideals.
What a waste of shareholder money, they say.
For instance, a relatively new mutual fund, called
Free Enterprise Action, has as its core principle this quote by
economist Milton Friedman: "The social responsibility of a
business is to increase its profits."
The fund's position: "Left-wing social and political
activists are harnessing the power, resources and influence of publicly
owned corporations to advance their social and political agendas.
... Their movement threatens shareholder value and the American
system of free enterprise."
Recently, the fund called on General Electric to "stop
advocating global warming regulation." Taking the opposite
tact of socially responsible investors, Free Enterprise Action Fund's
Steve Milloy voices opposition to what he terms "global warming
alarmism":
"First, we don't believe the available scientific data indicate
that human activity is measurably changing global climate. ...
"Second, even if human activity is altering global climate
to some extent, such climate change might actually be beneficial.
...
"Third, even if humans are undesirably affecting global
climate, the best path forward may be adaptation to that climate
change rather than harming the global economy through the expenditure
of hundreds of billions of dollars under the questionable rationale
that greenhouse gas regulation can act as some sort of global
thermostat."
His is not a lone voice in the crowd. If you're a
mutual fund investor counting on your Fidelity, Vanguard or American
fund manager to vote in favor of environment-friendly shareholder
resolutions, stop deluding yourself. A recent
study shows that most funds vote against or abstain from voting
on these resolutions altogether.
Since August of 2004, mutual funds have been required
to disclose their proxy voting records. If you're not happy with
how they're conducting themselves, vote with your feet.
But for the individual stocks that you own,
vote with your conscience, no matter where you stand on a particular
issue.
Longtime financial journalist Barbara Mlotek Whelehan
earned a certificate of specialization in financial planning. If
you have a comment or suggestion about this column, write to Boomer
Bucks.
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