Contact: John Harrington – 707.252.6166
FOR IMMEDIATE RELEASE
September 26, 2005
Napa, California
What's So Difficult to Understand About Ethics?
Monsanto urges SEC to keep bribery resolution off shareholder ballot.
Monsanto Company is attempting to convince the Securities and Exchange Commission (SEC) to allow the agricultural chemical company to keep a shareholder resolution on bribery off the annual shareholder ballot, according to John Harrington, President and CEO of Harrington Investments, Inc. (HII), who filed the resolution.
"Corporate management at Monsanto cannot be trusted to prevent illegal acts by employees overseas," Harrington said. "It's time for the owners of the company to step in and demand compliance with the law, company policy, and fiduciary duty."
On August 5, 2005, Harrington Investments, Inc., a Napa, California-based socially responsible investment advisory firm, filed a shareholder resolution at Monsanto Company, requesting that the board of directors create an ethics oversight committee comprised of independent directors. On September 15, 2005, Monsanto requested that the Securities and Exchange Commission permit the resolution to be excluded from the company's 2006 proxy statement, alleging that the proposal relates to ordinary business and falls under the SEC definition of micro-management of the company: "probing too deeply into matters of a complex nature upon which shareowners, as a group, would not be in a position to make an informed judgment."
In its response to Monsanto's request HII states, "Surely ethical behavior is not a matter too complex for shareholders to understand," and goes on to argue that the proposal simply creates an ethics oversight committee and does not dictate how that committee will be run. HII also asserts that the proposal addresses a significant social policy issue since corporate ethics is very much in the public mind after recent scandals such as Enron. It was Monsanto's recent payment of $1.5 million in fines to the U.S. Department of Justice (DOJ) and the SEC for bribing Indonesian government officials that prompted HII to propose the creation of an ethics oversight committee.
Pointing out Monsanto's failure "to properly oversee its basic business practices involving its Indonesian subsidiary," HII's response also counters Monsanto's claim that the resolution has already been substantially implemented. HII says the fact that Monsanto operations in Indonesian were not audited from 1996 to 2001 and that the company is being required by the SEC and DOJ to have an independent monitor examine Monsanto's procedures for complying with the Foreign Corrupt Practices Act demonstrate that the company's business practices have not been effectively monitored.
John Harrington concluded by saying: "While he was in Congress, the new chair of the SEC, Christopher Cox, received hundreds of thousands of dollars in campaign contributions from the same special interests that the SEC is to regulate, and he consistently voted against shareholder rights and corporate disclosure. It will be interesting to see how the SEC treats shareholders under his leadership."
(Sources: http://www.opensecrets.org/politicians/allcontrib.asp?CID=N00007124 and Public Citizens Congress Watch http://www.citizen.org/documents/PC_Cox_Rpt.pdf )
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