Administration June 9, 2005

NYC's Thompson Active on Two Corporate Governance Fronts

September 6, 2005 (PLANSPONSOR.com) - In two separate actions New York City Comptroller William Thompson, Jr. has asked US and overseas companies to review their Sudan ties and improve workplace human rights policies.

Reported by

Fred Schneyer

Both actions, taken in late August, are in line with moves by other large institutional investors in recent years to exert their influence in a wide variety of issues on companies in which they invest.

Acting on behalf of the five New York City pension funds, Thompson announced first that four corporations have agreed to beef up their workplace human rights policies. According to Thompson’s first news release the four agreed to improve their policies to ensure that their overseas suppliers respect workers’ human rights, as sought in the New York City funds’ shareholder proposals. The companies involved were:

VF Corporation of Greensboro, North Carolina
Fluor Corporation of Aliso Viejo, California
General Mills of Golden Valley, Minnesota
Best Buy Co., Inc. of Richfield, Minnesota.

The workplace rights include: banning child labor; allowing all workers to form and join trade unions and bargain collectively; prohibiting discrimination of worker representatives; barring discrimination or intimidation in employment; and not using forced labor, including bonded or prison labor.

The policies are based on the conventions of the International Labor Organization (ILO) on workplace human rights and the draft United Nations’ Norms on the Responsibility of Transnational Corporations with regard to Human Rights.

The following day, Thompson issued a second Web statement calling for dozens of companies in the United States and overseas to immediately review their business ties to Sudan.

Thompson began sending out letters that ask that each company to review any potential financial and reputational risks with its Sudan ties, and report its findings to shareholders.

“I write regarding an issue of great concern to the trustees of our funds – the potential risk to our investments in companies with business ties to Sudan, a country governed by a regime that has committed gross human rights violations against its own people, and that the US State Department has designated as a ‘state sponsor of terrorism’,” Thompson wrote.

As shareholders, he said, a company’s business dealings with Sudan “could expose the Company to negative publicity, public protests, and a loss of investor confidence, all of which could have a negative impact.”