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Answers to common questions about shareholder advocacy and how Indigenous leaders can engage directly with investors and companies to forward their communities’ priorities and self-determined goals.

What is shareholder advocacy?

Shareholder advocacy is a strategic tool used by investors to address corporate policy and to influence companies to create, improve, or halt specific behaviors. Shareholder advocacy encompasses many tactics, and can involve dialogue between affected communities and shareholders, with shareholders then approaching the company to create change from within. Indigenous leaders can work with shareholders to develop strategies that will work best for their given situation.

What are shareholders?

Shareholders collectively own publicly traded companies through shares, also called stocks, representing a percentage of the business. As owners, shareholders have certain rights to engage with corporate leadership on issues of concern. When a significant number of shareholders advocate for a particular issue or action, companies are compelled to address it.

What are some common tactics of shareholder advocacy?

Through letter writing, resolution proposals (official written requests submitted to a company by shareholders), investor and company meetings, and targeted media engagement, Indigenous Peoples can bring investor focus to their concerns and priorities on a particular project. Critical to this strategy is for allied investors to activate their portfolio to engage with companies they hold, and to forward dialogue that is made persuasive by their leverage as a shareholder.

What are some common goals of shareholder advocacy?

Each engagement is unique, and every community has their own self-determined goals. That said, increased transparency and accountability, improved corporate governance, enhanced environmental and social responsibility, creation of (or reporting on the effectiveness of) specific policies (human rights, Indigenous Peoples’ rights, etc.) are all common goals of shareholder advocacy. Any issue that a community or investors are concerned about can be brought to engagement.

Which shareholders are most likely able to support my community?

Investors commonly involved in shareholder advocacy could be asset management firms, pension funds, retirement funds, corporate social responsibility organizations, or faith-based organizations, among others.

How can I learn who the shareholders of a company are?

Shareholder information is most easily found online. Major financial websites, home-country corporate regulatory bodies, as well as the stock exchange where a company is traded are all resources to help locate large shareholders of a particular corporation.

How do we talk to companies that do not want to talk to us?

While the company may not want to listen to private citizens or community leaders, they have an interest in satisfying their ownership. Directors also have a fiduciary duty (the legal responsibility to act in the best interest of another party) to report on likely risks that the company will experience through its operations, which can include their exposure to Indigenous Rights Risk. By building a case with a shareholder or group of shareholders, Indigenous leaders may find that the company is more receptive to requests made by shareholders because they have influence in the company through their shareholder status.

By building a case with a shareholder or group of shareholders, Indigenous leaders may find that the company is more receptive to requests made by shareholders because they have influence in the company through their shareholder status.

The company or project we are being harmed by is state-owned or privately owned. Is shareholder advocacy still an option?

Shareholder advocacy is best applied to publicly traded companies. In circumstances where the target company is state-owned, there may be value-chain or end-user companies that are publicly traded, and shareholder advocacy can be leveraged at this level.

Should we reach out to the company directly before reaching out to shareholders?

Some shareholders want to see that you have tried to engage the company before they get involved. Having data to show shareholders that you have attempted to work with the company beforehand may give them leverage going into their engagements with the company. Shareholders can also assist in contacting the company should other methods prove unsuccessful.

How can we reach out to a company directly before trying shareholder advocacy?

Reaching out to a company directly is a sound first step. When engaging in dialogue with a company, here are a few important steps to remember:

• Gather information and evidence. Collect detailed information about your specific issue and document evidence of company impacts in your community as much as possible.
• Identify appropriate contacts. Identifying contacts within the company may involve research into several different sources. Company websites, annual reports, environmental or social responsibility departments, regulatory bodies, and financial websites are all potential sources to identify relevant contacts within the company.
• Formulate clear objectives. Defining the outcomes you seek from dialogue can shape your engagement strategy and provide clarity when collaborating with other stakeholders.
• Draft a formal letter or email. Clearly outline the issue, provide supporting evidence, and state your desired outcome from the dialogue.
• Request a meeting. A meeting provides an opportunity for more in-depth conversation and clarity on the stance of both parties.
• Stay informed about legal options or industry grievance mechanisms. Consulting with legal experts may provide guidance on potential regulatory violations. In addition, many industries, as well as regulatory or governing bodies have grievance mechanisms that can be used by communities and individuals negatively affected by certain business practices and operations.
• Persistence and collaboration are key. Be persistent in your efforts and open to collaboration. Alliances built with other communities, experts, and interested parties can strengthen your position and provide additional resources.
• Remember:This is only a first step and may not result in engagement. But these are valuable actions that will start you on the path to change and will be useful if approaching investors is your chosen next step.

Are the strategies for shareholder advocacy the same for all industries (e.g., mining, hydroelectric, wind/solar farms, etc.)?

Strategies with different investors or advisor groups may differ depending on their areas of focus, however the basic framework of shareholder advocacy and the steps involved can be applied to investors across many different markets, industries, and countries.

What does a successful shareholder advocacy campaign look like? What are some examples of past successes?

Every engagement is different, and every outcome is rooted in self-determination. Because of this, no two shareholder engagement campaigns are exactly alike. When corporate behavior is altered for the benefit of Indigenous Peoples, society at large, the environment, or any other criteria set forth by impacted communities, advocacy can be said to be successful. This determination, however, is left up to the community leaders engaging with shareholders and corporations.                               

Some recent examples of success through shareholder advocacy: in the Toronto Stock Exchange, from the Dakota Access Pipeline by major banks in the European Union, termination and resignation of Rio Tinto executive and board leadership and a after the destruction of the Juukan Gorge in Australia, and eliminating the racist name and logo of the Washington, DC NFL team.

How long does the shareholder advocacy process take to reach a conclusion?

Dialogue, negotiation, and building support among investors takes time, and may be a years-long process. This does not, however, mean that shareholder advocacy is less effective or less valuable than other actions for change. When used in tandem with other mechanisms, shareholder advocacy adds strength and evolves over time to reach the goals of Indigenous communities.

When used in tandem with other mechanisms, shareholder advocacy adds strength and evolves over time to reach the goals of Indigenous communities.

What is an Annual General Meeting?

Annual General Meetings (AGMs) are yearly gatherings of a company’s shareholders. Attendance is limited to shareholders (or their proxy), and agenda items typically include presentation of the company’s financial performance, voting on resolutions, election of board members, and questions from shareholders to the board of directors or executives.

What are shareholder resolutions (aka proposals or directives)?

Shareholder resolutions are a tool that investors use to create change within a company or corporation. They are no more than 500 words in length, contain a formal “ask” followed by rationale and supporting statements, and are voted on by shareholders at a company’s AGM (Annual General Meeting). Specific requirements for shareholder resolutions are set and governed by a regulatory body in the country or province where the company is headquartered.

Examples and samples of shareholder resolutions to banks and insurance companies can be found in our Indigenous Peoples' Rights and Participation in 2023 AGM Proposals publication.

What are the possible outcomes of filing a shareholder resolution?

Outcomes of filed resolutions vary depending on several factors. Typically, however, filed shareholder resolutions will result in one of the following:

• Dialogue. Shareholders and the company may continue to negotiate a solution after a resolution has been filed, prior to voting.
• Withdrawal. If a solution is found prior to voting on the resolution, the resolution may be withdrawn by filing shareholders.
• Vote. If a solution is not reached through dialogue, the resolution goes to a vote of the shareholders. The outcomes of the vote determine on the level of support it receives (or does not receive) from voting shareholders. Resolutions may be amended, further negotiated, or refiled in following years if substantial shareholder support is not obtained.
• No-action request (or similar action if headquartered outside of the US). If the company feels the resolution violates certain regulations set forth by its regulatory body, a no-action request may be filed. This request seeks permission to exclude a shareholder resolution from the company’s proxy materials on the basis that the resolution falls under a legal exclusion. These requests and exclusions differ depending on the country or province a company or corporation is headquartered in.
• Implementation by the Board. Even if a resolution is not formally approved by a majority vote, the board of directors may choose to voluntarily implement some or all the proposed changes if they believe it is in the best interest of the company.

Are shareholder resolutions binding?

Shareholder resolutions are recommendations to company leaders and are not legally binding. However, a resolution that has strong investor support incentivizes a company to meaningfully respond to the articulated concerns and can act as an avenue to productive dialogue.

Is shareholder advocacy the only option for pursuing change in corporate behavior?

No! Shareholder advocacy is one among several courses of action to change corporate behavior. Other actions can include media campaigns, domestic litigation, policy creation within the United Nations, industry complaint mechanisms, and others. Shareholder advocacy works alongside these other methods, not in place of them. In fact, the effectiveness of shareholder advocacy is often strengthened when coordinated with these other strategies.

What is the difference between shareholder advocacy and corporate advocacy?

Shareholder advocacy works with shareholders, leveraging their position as partial owners of a company to pressure that company to make changes in corporate behavior. Corporate advocacy involves working directly with the company to improve or alter their policies or actions.

What is ESG?

Environmental, social, and governance, or ESG, is a term commonly used to describe the strategy for identifying, measuring, and mitigating non-technical risk. ESG is a framework used in risk due diligence, to measure and operationalize socially responsible and sustainability-focused investing.

Is shareholder advocacy limited to environmental, social and governance (ESG) issues?

No. Shareholder advocacy can be employed to create change on many issues within a company. Proposals targeting enhanced reporting on specific topics, executive compensation, political contributions, and civic engagement are often seen, among many others.

How can we get involved with shareholders to advocate for our rights with a company?

First Peoples Worldwide is the secretariat of the Investors & Indigenous Peoples Working Group (IIPWG). This group holds monthly open calls and helps facilitate partnerships between investors and Indigenous Peoples.

For more information about shareholder advocacy or to inquire about Shareholder Advocacy Leadership Training, please contact us at fpw@colorado.edu. See also 91��Ƭ�� Shareholder Advocacy and Shareholder Advocacy Leadership Training (SALT).

Photos (top to bottom): Annual General Meeting ; proxy voting ballot via stock images; Indigenous leaders at NYC climate march .