TORONTO, March 16, 2023 /PRNewswire/ – New York City Comptroller Brad Lander and a coalition of long-term investors (PIRC on behalf of pension fund clients, as well as Canadian responsible investing organization SHARE—the Shareholder Association for Research and Education—on behalf of The Catherine Donnelly Foundation, and Trillium Asset Management) welcomed reports that the two largest independent proxy advisors, Glass Lewis and Institutional Shareholder Services (ISS), recommended investors support the coalition’s shareholder proposal requesting Starbucks’ board of directors oversee an independent workers’ rights assessment.
In its reasoning, Glass Lewis noted that shareholders would benefit from the company assessing its adherence to their existing workers’ freedom of association and collective bargaining rights commitment. The advisor echoed the legal and financial risk concerns raised by the investor coalition.
ISS noted that with implementation of the proposal, shareholders would be able to better assess the company’s compliance with their freedom of association policy and federal laws in response to collective bargaining by their workforce and how it is managing the associated legal, reputational, and financial risks.
The shareholder proposal requests an evaluation of management’s adherence to Starbucks’ stated commitments to workers’ rights to freedom of association and collective bargaining. It would also assess management non-interference when employees exercise their right to form or join a trade union, as well as recommend steps to remedy any practices found to be inconsistent with Starbucks’ stated commitments.
Shareholders will have the opportunity to vote for the proposal leading up to and during the company’s annual meeting on March 23.
The proposal underscores the importance of board oversight and transparency regarding Starbucks management’s adherence to the company’s human rights policy. The National Labor Relations Board (NLRB) issued numerous substantiated complaints against Starbucks, which heightened investor concerns regarding interference with worker organizing. Despite the coalition’s efforts to engage the company, Starbucks failed to respond sufficiently.
“We are encouraged that both Glass Lewis and ISS have recommended that shareholders vote YES on our proposal to address the very real impacts that management’s behavior has on their workforce and reputation,” said New York City Comptroller Brad Lander. “As shareholders, we expect and demand better from a company that claims to promote a positive work environment. The onus is on Starbucks’ board of directors to ensure that management is complying with applicable law as well as with company policy.”
“Whether the vote is in the 30 percent, 40 percent, or 50 percent range, an unignorably large group of investors will be sending a message to incoming CEO Laxman Narasimhan and Board Chair Mellody Hobson,” said Trillium Chief Advocacy Officer Jonas D. Kron. “The board needs to take an active lead in examining, with the benefit of a third-party assessor, whether management is living up to its commitments to worker rights.”
“It is already clear that investors want to have confidence that Starbucks is walking the talk in respect of its commitment to ILO Core Labor Standards,” said PIRC Head of Stewardship Tom Powdrill. “We urge the company to take the support for our proposal as an opportunity to get an independent assessment and to act on it.”
“Workers are at the heart of Starbucks’ success and central to the company’s reputation.” said Anthony Schein, Director of Shareholder Advocacy at SHARE. “The incoming CEO and board chair need to wake up and smell the coffee – their poor decisions have led to undeniable damage to the company’s reputation. Shareholders expect the company to align with international standards and its own policies.”
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SOURCE SHARE (The Shareholder Association for Research and Education)