Shareholders Squeeze Cisco on Human Rights 264
Comatose51 writes "According to this article at Wired, Boston Common Asset Management, has filed a shareholders resolution asking Cisco to 'adopt a comprehensive human rights policy for its dealings with the Chinese government, and with other states practicing political censorship of the internet.' Cisco so far has asked the SEC to omit this proposal from the agenda for the next annual meeting, claiming that it already has a comprehensive human rights policy in place and that 'Cisco does not participate in any way in any censorship activities in the People's Republic of China ...' However, 'a report from the OpenNet Initiative watchdog group last April singled out Cisco for allegedly enabling the Chinese government's notorious "Great Firewall."' As a shareholder in Cisco, I would like to see this issue discussed and voted on."
Et tu, Microsoft (Score:4, Interesting)
You probably won't hear it on the evening news in the USA, but Microsoft is also actively engaged in helping China with political censorship [google.com].
Key Phrase as to why this doesn't even matter (Score:2, Interesting)
Even if it came to a vote and passed, the resolution would not be binding on Cisco's executives. But "it sends a strong message to management, and it gets across the sentiment of shareholders in a way that writing a letter can't do," says Wolfe.
Big whip. It's not binding and is just paper. As for the reasoning that management cares what the shareholder's think...well that argument has been going on for decades.
Also from the article:
"Can companies just claim a total lack of political responsibility in how their technology is used in all instances? It's something that companies should be thinking about when they sell their technologies around the world."
Yes, they can. Companies are out to make a profit not a political statement. Investors, i.e., the shareholders, want a monetary return, not a political return on their investment. As an investor in Cisco I would sell immediately if I knew Cisco was going to quit selling to one of the largest markets in existence because they were going to make a political statment (in fact I would sell short and make quite a bit when this news hit the street as well).
There is nothing that Cisco itself can do change human rights in China. In order for that to happen the people of China have to want the change; really want the change. If tomorrow Cisco stopped selling to China Juniper or another company would just take up the slack. Only if all companies did this would that then make an impact. (And yes, I know you have to start somewhere, but why don't you start with the people in China first?)
Political mongering at corporations has been around for decades and it will not go away. But what a waste of time to fight over a non-binding non-effort.
Activists got an item on the Caterpillar agenda (Score:2, Interesting)
For some marginally good news for a change, as highlighted by jewishvoiceforpeace.org [jewishvoiceforpeace.org] and corpwatch.org [corpwatch.org], according to an Apr. 15, 2004 Peoria Journal Star article [pjstar.com]:
Caterpillar is headquarted [caterpillar.com] in Peoria, which is why the Peoria newspaper ran the story. I've been unable to locate any other newspaper running this story.The Peoria newspaper portrays it as a loss for the activists, when in fact it is a major victory (the 4% means it has to be discussed at next year's shareholder meeting) and represents a creative and practical means for effecting change in corporate behavior -- much more practical than street riots.
As I've often stated, corporations should not be so large, last so long, and have Constitutional rights. However, if they have to be around, then the proposal contained in the conclusion of the seminal Small Is Beautiful [serve.com] for bridling corporations is good. Small is Beautiful says that since corporations are like mini-governments, run them as a democracy where all the stakeholders (all who are affected by the existence of the corporation, including investors but especially those who live near the corporation's activities) vote.
Failing those two -- i.e. if we can't ban large corporations and if we can't have stakeholders vote on how large corporations should be run -- then participating in the existing corporate governance process -- namely buying stock and voting at shareholders meetings -- is the next best thing.
This peaceful, legal alternative to reining in amoral powerful corporations has gone underreported.
See also the previous UnderReported.com stories:
Is anything more important than money? (Score:4, Interesting)
Yet, are there things that are more important than money?
Fortunately, many of my peers in the United States of America feel that some things are more important than money. Consider the case of Stanford University. It is probably the most commercial of the elite universities and has strong ties to industry. Yet, Stanford University recently divested its investments in Chinese companies like PetroChina, which is commited to indifference to the Sudanese victims of human-rights abuses [stanford.edu].
What surprises me about the lead article in this discussion is that Boston Common Asset Management, which (to my knowledge) is not an official advocate of socially responsible investing [socialfunds.com], has done such a clearly socially responsible act. Does anyone know of any funds managed by Boston Common Asset Management? I want to invest a significant amount of my 401K monies into those funds.
Like Stanford's Board of Trustees, I too am committed to the cause of human rights. I invest exclusively in socially responsible mutual funds.
By the way, there is a significant and measurable difference between Western society and non-Western society. In the West, you will often see incidents of this kind, where shareholders actually demand that companies support human rights. Cisco will change. Reebok [reebok.com] has already changed and is now an official supporter of Amnesty International. Can anyone find examples of such shareholder activism in, say, the Chinese province of Taiwan [geocities.com]?
Paging Mr. Sociopath... (Score:2, Interesting)
That'd be ok, wouldn't it? Because, as you said, your investments to make profit should be somehow seperated from your feelings on human rights?
Ok, so how about we cut to the chase, then? How about I offer you $1,000,000 tax-free (pure PROIFIT!!!) for your wife and daughters, so they can be used in a fatal and painful medical experiment?
That should be cool with you, shouldn't it, since you are a guy who likes to seperate his financial considerations from his morality?
They have a word for people who place profitabiliy and money above concerns of human rights and basic morality.
We call those people sociopaths.
as someone that actually lived in china... (Score:5, Interesting)
It slows down the entire internet outside of china, even if the website is not being blocked.
Even if you pay for a proxy server outside of China, this is a serious pain that impairs any Internet related business.
I will never buy Cisco products, or any other company that is involved in it.
Perhaps it would be better to boycott companies that are big buyers of Cisco products? This worked pretty well in Forcing the South African Aparteid Goverment to change.
Anyway, after living in China I am not convinced they are on their way to a huge bubble and collapse. Sure, I see tons of new buildings and businesses, but there are also tons of scams and empty buildings. I wonder if they will not soon overdevelop beyong their capacity to use? Well, I guess we will just see.
So now it is US companies also? (Score:4, Interesting)
Um, a little late? (Score:3, Interesting)
So why in the world are they even talking to Cisco, which makes something at 10x the cost, except to trick them into adding features they will never buy anyway.
Come on Cisco, get your head our of your ass and wake up!
Re:Yawn! (Score:3, Interesting)
What a quaint idea, only there is no such thing as "our national companies" anymore. Most multinationals are approaching stateless entities. Many are moving headquarters to offshore havens with tax codes and regulation friendly to big corporations. If government really tried to pressure any of them out of China they could easily do the same and wave goodby to the U.S. as their home base.
John Chambers, Cisco's CEO, has given some infamous speeches where he has declared Cisco is becoming a "Chinese company". Some excerpts [blogspot.com]. So if you want to argue what nation Cisco belongs to they may have already seceeded from the U.S. and raised their flag in Beijing.
In the case of Cisco, if you read the link above you see China is the one dicatating to Cisco what to do, not the U.S. government.
The other obvious fact is most of the big multinationals are so powerful, and have such massive influence on the politicians and bureaucrats that run the U.S. government, its much more a case where they are pressuring the government and dictating to it on how to treat China, not vice versa. In particular they are demanding the U.S. throw open American markets to Chinese goods (same for NAFTA and CAFTA nations) because there is short term profit in it for those multinationals because they help make and sell those goods, and especially because they want the cheap labor, no environmental regulation etc. They are in most respects dictating to the U.S. government a policy towards China that is already very detrimental and could eventually be devestating to the U.S. economy. The U.S economy simply can't sustain half trillion dollar, and exploding, deficits. If the U.S. government were acting in the interest of the people and the long term health of the U.S. as a nation it would be erecting trade barriers, raising tariffs on Chinese goods, and withdrawing most favored status. Instead the government is collapsing barriers to Chinese goods and Chinese investment in the U.S. at the same time the Chinese maintain MASSIVE barriers to U.S. goods being sold in China and U.S. companies doing business there. In particular the only way U.S. companies get a foothold in China is they must partner with Chinese companies and usually transfer IP and markets to them to gain that entry, IBM's sale to Lenovo being the classic example.
Now shareholders certainly do have a right to dictate the direction of the corporation but ONLY if they can muster enough votes to dictate that direction. Shareholder pressure certainly has dictated corprate responsibility in the past on places like South Africa. But China is a LOT bigger economic prize than South Africa. For all the socially responsible investors that might want to get a company out of China, there are probably as many or more that want to dive in head first because there are potentially large profits to be made there, if they pass on them some competitor will reap them. Unfortunately in free markets, free markets get to decide which side wins in the end. Profits almost always win out over social responsibility. South Africa was was an exception because it wasn't that important to most companies, and being associated with it did cut in to their profits because it was such a pariah. Cisco is betting its entire future in China so it wont cut China loose without a major fight in the boardroom and shareholder's meeting.
Re:Yawn! (Score:2, Interesting)
I mean, let me see are you telling me censorship does not exist in the US? And what is the policy on homosexuality and gay marriage by the president in the United States? Wow, certain people are oppressed in the US too you know?
Funny we speak of good and bad like we actually know how to define such as well. So it is being "good" to be against the policies of a foreign government. Yet it is bad to limit the "freedom" to bear arms in the United States. And gun manufacturers are never factored into the equation when things like Columbine happen.