Napa, CA – Shareholders of Anthem, Inc., one of the nation’s largest for profit healthcare insurance companies, voted 67% in favor of the right to nominate directors, as proposed by John Harrington, CEO of Harrington Investments in Napa.
With the surprisingly large vote against Anthem’s corporate management, shareholders at Anthem, Inc., sent a strong message to the Board. If Harrington’s proposal is implemented, shareholders will be able to directly nominate a limited number of candidates to Anthem’s Board of Directors.
“Anthem board members are disconnected from their most important stakeholder communities,” Harrington said. “This industry is going through unprecedented changes, practically on the brink of upheaval, and the Anthem Board is stacked with the usual corporate bankers. There is no representation for institutional investors, employees and certainly not customers,” he said.
“The current pattern of corporate board membership is self-selecting, self-serving, self-perpetuating, and without meaningful accountability,” Harrington noted. “Most boards are filled with corporate CEOs or retired CEOs, usually older white men, who also who sit on many other boards, and have little time for competent, professional oversight and policy direction.”
The 67% favorable vote at Anthem is the largest vote so far in 2015, topping the clear majority 53% vote Harrington won at Monsanto in January. Also this year Harrington negotiated an implemented proxy access at Bank of America, and then won large percentages at both Coca Cola and Apple. Of the nearly 100 proxy access proposals submitted to companies across the country by various investors, most have been receiving 30-40% support.
Shareholders—who are company owners—have been attempting for more than 70 years to acquire the power to nominate directors. While it was mandated by the Dodd-Frank Act in 2010, the conservative Chamber of Commerce and Business Roundtable were successful in getting the courts to invalidate a congressionally approved, universal proxy access process.
Company managers almost always oppose these proposals, and will pay large fees to specialized attorneys to fight at the SEC to either ban proposals or significantly dismantle them. In a rare but extreme example, this year Whole Foods went so far as to cancel a shareholder meeting so the company owners couldn’t even have a chance to vote on a proxy access proposal.
Harrington’s proposal was presented by Indiana’s prominent Dr. Robert Stone. Dr. Stone has been a national leader in the movement to divest from for-profit health insurance and is the national coordinator for the Divestment Campaign for Healthcare (HealthCareNotWealthCare.US).
Harrington also sees the current process of selecting board directors as partly responsible for the denigration of a traditional understanding of fiduciary duty as a moral obligation. Simply put, there was a time when ethical behavior was an essential part of doing business. “The law required directors to be obligated to stakeholders based on an ethical relationship of trust,” he said. “Those days are gone.”
Harrington Investments, Inc. is a 33-year old Registered Investment Advisor, managing over $190 million in assets for individuals and institutions, requiring social and environmental, as well as financial return. The company manages assets utilizing a comprehensive social criteria, engages in shareholder advocacy, and implements a policy of impact investing in for-profit as well as non-profit enterprises.