Corporate purpose and companies suing shareholders

Ann and Mike talk about what we mean when we look at corporate purpose, and how a shareholder lawsuit at META illustrating the debate on corporate purpose met its end in Delaware. They also talk about another angle on corporate purpose and climate change, as XOM sued ESG shareholders to stop their efforts to define corporate purpose using climate change proposals.

Ah, corporate purpose, it gets a lot of attention these days. While there’s much to discuss, we can focus on a recent case that seems to encompass many of the issues in the debate, involving META or Facebook.

• What’s all this we hear about corporate purpose?

• This is a debate? After 100 years, why isn’t it settled?

• It seems like shareholders get prioritized a lot though, right?

•  How does this debate relate to the hundreds of ESG proposals that companies saw this year and in past years?

• Is it realistic to think those kinds of proposals will succeed?

• How did one shareholder, Jim McRitchie, move ahead to test this idea legally at META?

• And what happened?

• So is the universal owner theory dead?

• We can talk specifically about the company, Exxon Mobil, and its proposal situation – it receives numerous ESG proposals each year.  And recently it received proposals from two repeat sponsors, Arjuna Capital and Follow This.

• Now first, who are Arjuna Capital and Follow This?

• What were their proposals?

• Normally, when Exxon or any other company gets a proposal like this, what does it do?

• What did Exxon do here instead?  

• What about other shareholders - like all the other shareholders who are invested in Exxon - did they care about any of this?

• How did Arjuna and Follow This respond?

• What else did Exxon Mobil do after the shareholders withdrew? 

• How might this affect future shareholder proposals?