Construction Workers Union Unveils Corporate Governance Initiative

LIUNA – the Laborers’ International Union of North America – said in a statement it is filing shareholder proposals with 28 corporations under three categories:

• mandating new disclosures of potential risk in mortgage-related investments,
• limiting and disclosing conflicts of interest between credit rating agencies and the mortgage buyers and sellers who pay for those agencies’ services, and
• requiring disclosures of succession plans and executive compensation policies in instances where CEOs are replaced because of the mortgage crisis.

The campaign is designed to help protect workers’ pension funds and “begin restoring confidence and accountability to the mortgage industry and housing market,” according to the LIUNA announcement.

“As many as 1 million residential construction workers will lose their jobs, up to 3 million homeowners face foreclosure and hundreds of billions of dollars in shareholder value have been destroyed because of a system riddled with conflicts of interest, lack of disclosure and lack of oversight,” charged Terence M. O’Sullivan, LIUNA General President, in the statement. “A crisis of this significance requires an equally significant response. We cannot stand idly by as workers’ pensions get hammered, jobs and homes are lost and our economy falls into a downward slide.”

The union is fling shareholder proposals with financial service and mortgage holding companies such as Lehman Brothers, Washington Mutual, and Bear Stearns to require full disclosure of the types of mortgages bought and sold and their underlying value so that shareholders can accurately assess risk.

Meanwhile, proposals at credit rating companies such as Citigroup, IndyMac Bancorp, Wells Fargo, Moody’s, and Standard & Poor’s would require a cooling off period before hiring key staff from financial services and mortgage holding companies with whom they have done business and would bar analysts from covering a company for more than five years. The LIUNA proposals would also require policies to disclose and limit conflicts of interest with credit rating agencies.

Finally, executive succession proposals have been filed at corporations including Merrill Lynch and Toll Brothers. Companies in which executive pay proposals have been filed include Goldman Sachs, Countrywide, and Morgan Stanley, LIUNA said.

The union has pension funds of $32 billion held for its half-million members who work predominantly in the construction industry, according to the statement.