Shareholders up tax scrutiny at AGMs

Proxy voting is an important tool in a shareholder’s toolkit and is increasingly being used to request tax transparency from companies worldwide.

Last year’s proxy season yet again saw a record number of shareholder proposals targeting social issues such as responsible tax, human and digital rights, and diversity and inclusion, asset manager Federated Hermes’ stewardship arm EOS noted in its Q2 public engagement report.

In 2022, tax transparency shareholder proposals were filed at Amazon, Cisco and Microsoft. “This was significant, as such proposals have historically been blocked from going to a vote,” the EOS report noted.

Amazon and Microsoft again faced shareholder proposals last year seeking a tax transparency report that considered the indicators and guidelines of the Global Reporting Initiative (GRI) tax standard.

Added to the mix was a tax transparency proposal at Brookfield Corporation in Canada submitted by the BC General Employees’ Union, and resolutions filed by Oxfam America at ConocoPhillips’s and Chevron’s AGMs in May, and ExxonMobil’s in June. These called for improved disclosures, including detailed country-by-country reporting to prevent tax avoidance.

“Exxon, Chevron, and ConocoPhillips’s threadbare tax disclosures leave investors, watchdog groups, and the general public in the dark about the companies’ secretive tax practices,” Oxfam America policy lead of extractive industries and tax, Daniel Mulé, said at the time.

The resolution at Exxon won the support of 14% of shareholders, with 15% backing the resolution at Chevron and 17% at ConocoPhillips, with EOS recommending support for all three.

As we move into 2024 we can no doubt expect another bumper year for tax disclosure scrutiny at AGMs, making the Fair Tax Mark – which satisfies the key reporting recommendations of GRI 207, the Principles for Responsible Investment and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct – a must-have for staying ahead of the curve. 

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