Viewpoint Diversity Shareholder Proposals - A Commentary

Earlier this year, Transactions: The Tennessee Journal of Business Law, published papers presented at the 2020 Connecting the Threads IV symposium, held on Zoom just about a year ago.  Back in July, I wrote about my coauthored piece from the 2020 symposium.  That was my primary contribution to the event and the published output.

However, I also had the privilege of commenting on two papers at the symposium last year, and my comments were published in the Transactions symposium volume. I have been wanting to post about those published commentaries for a number of months, but other news just seemed more important.  Given the recent completion of this year's Connecting the Threads V symposium, it seems like a good time to make those posts.  I start with the first of the two here.

This post covers my commentary on Stefan Padfield's paper, An Introduction to Viewpoint Diversity Shareholder Proposals.  It was a fascinating read for me.  I was unaware of this genre of shareholder proposal before I picked up Stefan's draft.  If you also are in the dark about these shareholder proposals, his article offers a great introduction.  Essentially, viewpoint diversity shareholder proposals are shareholder-initiated matters proposed for a shareholder vote that (1) are included in a public company's proxy statement through the process set forth in Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and (2) serve "to restore some semblance of balance" in public companies that are characterized by viewpoint bias or discrimination.  Stefan's article offers examples and provides related observations.

My commentary is entitled A Few Quick Viewpoints on Viewpoint Diversity Shareholder Proposals.  It is posted on SSRN here. The SSRN abstract is as follows:

This commentary essay represents a brief response to Professor Stefan Padfield’s "An Introduction to Viewpoint Diversity Shareholder Proposals" (22 TRANSACTIONS: TENN. J. BUS. L. 271 (2021)). I am especially interested in two aspects of Professor Padfield’s article on which I comment briefly in turn. First and foremost, I focus in on relevant aspects of an academic and popular literature that Professor Padfield touches on in his article. This literature addresses an area that intersects with my own research: the diversity and independence of corporate management (in particular, as to boards of directors, but also as to high level executive officers--those constituting the so-called “C-suite”) and its effects on corporate decision-making. Second, I offer a few succinct thoughts on the suitability of the shareholder proposal process as a means of promoting viewpoint diversity in publicly held firms.

The essay is reasonably brief (so feel free to read it in its entirety).  But the essence of my conclusion offers the bottom line.  

Although viewpoint diversity may be a vague or malleable term, the business environment and exemplar shareholder proposals featured in Professor Padfield’s Article offer guidance as to the contextual meaning of that term. Based on his depiction and the literature on management diversity’s role in efficacious decision-making, viewpoint diversity has the capacity to add value to the business management enterprise and enhance the existence and sustainability of a healthy, happy workforce. Moreover, his Article indicates, and this commentary affirms, that the shareholder proposal process may be a successful tool in raising viewpoint diversity issues with firm management. Even if the inclusion of specific shareholder proposals in public company proxy statements may be questionable under Rule 14a-8, the existence of viewpoint diversity shareholder proposals may open the door to productive dialogues between shareholders and the subject companies. In sum, Professor Padfield’s Article represents a thought-provoking inquiry into an innovative way in which securities regulation may contribute to forwarding corporate social justice in the public company realm.

So, even if you don't read my commentary, you should read his article.