One potentially powerful tool to influence corporations is the shareholder proposal. The shareholder proposal allows a shareholder to express concerns to corporate executives and fellow shareholders and are used by stareholders to change the actions in which their company is engaged. Any shareholder who has owned a minimum of $2,000 of the company's stock for at least one year can file a shareholder proposal. Thus, even small investors can influence corporate action. The shareholder proposal, assuming it meets the requirements specified by the U.S. Securities and Exchange Commission, is placed on the proxy statement as part of the corporation's annual meeting. All shareholders then vote on the proposal. Often the stockholder filing the proposal engages with the company prior to the annual meeting and this dialogue may lead to the shareholder withdrawing the proposal if the company agrees to take action.
Shareholder Proposals Filed
In late summer 2015, Roman filed a shareholder proposal with Costco, Inc. seeking that it increase transparency in its cotton supply chain. Roman and Costco reached an agreement whereby Costco will engage in best practices regarding its cotton supply chain including agreeing to sign the Responsible Sourcing Network's (RSN) Cotton Pledge and take the steps outlined by RSN to combat the use of forced and slave labor in the global cotton supply chain. The press release on the agreement is available here.