AFL-CIO launches shareholder resolution vs Nike

WASHINGTON (PAI)—The AFL-CIO is launching a shareholder resolution against Nike, demanding the monster maker of athletic footwear move its taxes back onshore and pay its fair share of the freight for the services it uses in the U.S.

Speakers for the federation’s Office of Investment and their allies in the corporate reform community did not forecast whether their resolution would win. But they noted that publicity over prior misdeeds, at Nike’s supply chain shoe producers in Asia, shamed the firm into constructive change which benefited those workers.

The shareholder resolution comes, ironically, as the Republican-run Congress is considering a tax cut bill the fed says would make it easier for Nike and other firms like it, including Apple, to offshore firms, export U.S. jobs overseas, and elude U.S. taxes (See tax cut bill story).

But it also comes just after the Teamsters won a big shareholder victory at another corporate scofflaw, McKesson, the nation’s largest distributor of addictive opioid drugs. Shareholders rejected the firm’s compensation plan for its CEO, who turned a blind eye to its role in the epidemic, and also ordered the board to split the duties of the chairman and the CEO (See opioid story).

Reaction to union-sponsored shareholder iniaitives calling for greater accountability “varies by company” said Heather Corzo, director of the federation’s Office of Investment. Many companies “are not speaking to therir investors” about such issues of accountability until the shareholder initiatives force them to do so.

And corporate structure plays a role in success of such initiatives, or lack of it. Multinational companies’ “tax practices are incredibly complex,” making accountability difficult in that area, she added. And when a firm’s founders set up a voting system that keeps them in control – such as at Google, whose three founders hold 80 percent of voting stock – progress is difficult to impossible.

Nike, however, is another matter. After pressure from the AFL-CIO and United Students Against Sweatshops, who together focused on abuses in the firm’s supply chain overseas, Nike reversed course and now exercises strong oversight there, Corzo said.

And it may be a precursor. “Many companies will respond in a constructive way” to shareholder accountability initiatives “with stronger governance practices and stronger disclosures,” she added.

Source: PAI