Shareholders amend the Bylaws, by adding the following new section at the end of Article III:
Section 4. Board Committee on Human Rights. There is established a Board Committee on Human Rights, which is created and authorized to review the implications of company policies, above and beyond matters of legal compliance, for the human rights of individuals in the US and worldwide.
“The Board of Directors is authorized in its discretion consistent with these Bylaws, the Articles of Incorporation and applicable law to (1) select the members of the Board Committee on Human Rights, (2) provide said committee with funds for operating expenses, (3) adopt regulations or guidelines to govern said Committee’s operations, (4) empower said Committee to solicit public input and to issue periodic reports to shareholders and the public, at reasonable expense and excluding confidential information, including but not limited to an annual report on the implications of company policies, above and beyond matters of legal compliance for the human rights of individuals in the US and worldwide, and (5) any other measures within the Board’s discretion consistent with these Bylaws and applicable law.
Nothing herein shall restrict the power of the Board of Directors to manage the business and affairs of the company. The Board Committee on Human Rights shall not incur any costs to the company except as authorized by the Board of Directors.
The Coca-Cola Company, including its bottlers, and suppliers have been associated with human rights controversies, leading to:
- Numerous colleges and universities having removed Coca-Cola products from their campuses, including the City University of New York, population 580,000, costing the Company hundreds of millions of dollars;
- Coca-Cola facing numerous racial discrimination lawsuits in New York filed by black and Latino workers in Coca-Cola plants and warehouses;
- Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF) divesting 1.25 million shares of Coca-Cola Co. stock in July 2006 from its CREF Social Choice Account, the nation’s largest socially screened fund for individual investors. Coca-Cola remains banned from the fund;
- Community campaigns for human rights in India shutting down Coca-Cola bottling plants in Plachimada and Balia because of overexploitation and pollution of scarce water resources;
- Scathing documentary films, books, reports and artistic creations damaging Coca-Cola’s image, brand and sales.
In the opinion of the proponents, the company’s existing governance process does not sufficiently elevate human rights issues within the company or serve the interests of shareholders in expediting effective solutions. The proposal would establish a Board Committee on Human Rights that could review and make policy recommendations regarding human rights issues raised by the company’s operations activities and policies.
In defining ‘human rights,’ proponents suggest that the committee could use the US Bill of Rights and the Universal Declaration of Human Rights as nonbinding benchmarks or reference documents.