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[liberationtech] Weak Commitment to Human Rights Factors into Boston Common's Decision to Divest of Cisco Systems
rebecca.mackinnon at gmail.com
Wed Jan 12 06:46:30 PST 2011
Weak Commitment to Human Rights Factors into Boston Common's Decision to
Divest of Cisco Systems
Manipulative Vote Tallying Further Isolates Cisco
Posted: Jan 11, 2011 – 08:00 AM EST
BOSTON, Jan. 11 /CSRwire/ - Boston Common Asset Management, LLC has divested
of its holdings in Cisco Systems, Inc. stock (NYSE: CSCO) due in part to the
company's weak human rights risk management and poor response to investor
concerns. Cisco's deceptive announcement of vote results on proxy items at
the 2010 annual shareholder meeting has raised further alarm about the
company's commitment to transparency.
Since 2005 Boston Common has led a growing coalition of investors,
representing over 20 million Cisco shares, in asking Cisco management to
ensure its products and services do not stifle human rights. Cisco has
testified before federal law makers twice since 2006 over questions on its
human rights record, including its marketing of equipment to the Chinese
Ministry of Public Security.
"Boston Common's decision to divest comes after years of campaigning Cisco
for greater transparency and accountability on key human rights and business
development concerns," stated Dawn Wolfe, associate director of
environmental, social, and governance research at Boston Common Asset
Management. "Freedom of expression, privacy, and personal security are all
critical elements in maximizing network traffic. Politically and socially
repressive policies related to speech and privacy has a chilling effect on
users and violates universally recognized human rights. When pressed for
details on how Cisco addresses these risks, they come up short."
At the November 18, 2010 annual meeting of shareholders, Cisco did not
answer yet another request for engagement with shareholders. This followed a
September 30, 2010 letter to independent board member and Stanford president
John Hennessy requesting his assistance in establishing a meaningful
dialogue between Cisco and shareholders on human rights. Similar to previous
attempts to engage the Board as a whole, Hennessy did not respond to the
"As technology becomes more prevalent in the world, we expect human rights
related concerns will become more, not less prominent," said Nevin Dulabaum,
president of Church of the Brethren Benefit Trust, a long-time shareholder
of Cisco Systems and active participant in the investor-driven human rights
campaign. "For all its talk about the 'human network' and adherence to the
United Nations Universal Declaration of Human Rights, Cisco has not
demonstrated in any concrete way that it fully recognizes its potential
impact on human rights around the world."
Boston Common's ESG Team recommended the removal of Cisco Systems from its
portfolios because of strong reservations about its human rights performance
and poor shareholder engagement on the issue.
*Deceptive Vote Tallying Behind Proxy Results Announced at Annual Meeting*
In an apparent attempt to downplay votes in favor of shareholder sponsored
proposals on the proxy ballot, Cisco used two different methods to calculate
proxy results announced at the annual meeting-one for proposals put forward
by its own management and a second for proposals sponsored by Cisco
shareholders which served to dilute support.
"If management is reporting votes one way for their own proposals and
another way for shareowner sponsored proposals, that is deceptive. It speaks
volumes about management's attitude towards their own shareowners - a
flashing red light. Ignore it at your peril," stated Glyn Holton, executive
director, United States Proxy Exchange.
Boston Common's human rights proposal was supported by 34% of voted shares
when calculated using the standard SEC method, the one Cisco used to
calculate support for its own proposals, including the advisory vote on pay.
If Cisco used the same method based on all outstanding shares to calculate
support for its own proposals, not just those sponsored by shareholders, its
executive compensation package would have received support from just over
half of its shareholders.
"The voice of shareholders fall on deaf ears at Cisco," stated Wolfe. "About
a third of Cisco Systems shareholders voting their proxies have supported
our proposal over the years, voting in favor of greater disclosure on issues
of censorship and privacy. Cisco's deceptive tallying practices in 2010 do
not change that. The investor coalition will march ahead, and perhaps one
day Cisco will wake-up and realize how dedicated these shareholders are to
the company's success. Until then, significant questions remain about its
ability to manage risks it is reticent to recognize."
*About Boston Common Asset Management*
Boston Common Asset Management is an investment manager specializing in
sustainable and responsible equity and balanced strategies. We pursue
long-term capital appreciation by seeking to invest in diversified
portfolios of high quality, socially responsible stocks. Through rigorous
analysis of financial, environmental, social, and governance (ESG) factors
we identify attractively valued companies for investment. As shareholders,
we urge portfolio companies to improve transparency, accountability, and
attention to ESG issues. Our focus is global; we manage U.S. and
international portfolios, customized to the needs of institutional and
For more information, please contact:
Dawn Wolfe <dwolfe at bostoncommonasset.com> Associate Director, ESG Research
Schwartz Senior Fellow, New America Foundation
E-mail: rebecca.mackinnon at gmail.com
Twitter: @rmack <http://twitter.com/rmack>
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