- - Monday, February 18, 2019

ANALYSIS/OPINION:

The poisonous activism of social justice warriors has spread into the nation’s corporate boardrooms. As activists — some might call them partisan troublemakers — on the outside decry the corruption and evildoing of big business, others have worked their way inside to offer resolutions to require companies to “do good,” as the warriors define “good.”

Under the guise of protecting share value, these warriors who bought a share or two to enable them to pose as investors, demand that shareholders get to vote on rogue proposals that have nothing to do with preserving value, creating jobs or adding to company growth. Instead, these warriors are determined to bring the company in line with a political agenda close to the fantasies of the so-called Green New Deal.

Most successful companies do what they were organized to do, and try to stay out of politics. That’s not always possible. The U.S. Securities and Exchange Commission continues to block meaningful reforms to require that shareholder resolutions be put to a shareholder vote which would squelch much of the trouble-making. This has led to what to the naked eye is strange behavior, with companies forced to take positions which run counter to a company’s bottom line.

Larry Fink, the CEO of the investment firm Blackrock, has pushed the issue in his annual letter to shareholders, talking about his firm’s “tremendous responsibility” to “our role as a fiduciary, our expertise in investing, markets and technology, our knowledge of and ability to empathize with investors’ needs — to drive action.”

Those “actions” almost uniformly push the corporate culture to the left. Fortunately, not everyone is playing along. American Outdoor Brands Corporation — which among other things manufactures guns and other products under the brand “Smith & Wesson” — got hit with one of the resolutions recently and, rather than cave to pressure applied by shareholders who bought a few shares only to shape corporate policy, is making a robust defense of its business practices, a defense that should set the standard for other companies drawn into political debates.



The rogue shareholders demanded that the company’s executives say what they were doing about “gun safety measures and mitigation of harm associated with gun products,” with a special emphasis on monitoring violent events associated with company products and any associated “reputational risk,” and to say what progress is made on research and production of “safer guns.” This all sounds pious, but the noble language hides actual intent to do harm.

The company complied, but in a way almost guaranteed to cause heartburn for the shareholders who asked the question. To summarize, the company answered, its reputation among buyers of guns and the confidence of supporters of the Second Amendment is more critical to the success of the company, and the protection of shareholder value, than detractors and special interest groups with a partisan political agenda. Efforts to improve the company’s reputation among its critics would be inherently futile.

A successful company will put itself in peril if it forgets who its constituency is and tries to appease those who would be pleased to see driven out of business. But this time the makers of Smith & Wesson firearms are making a resolute defense of the Second Amendment, which the U.S. Supreme Court has declared is an individual right. Supporting the Second Amendment is not only good citizenship, but good for business.

We hope this is the beginning of a trend. Exxon/Mobil and the other major oil companies, for example, should never quail before the demands of the chorus of the “climate crisis” crowd determined to impose damage on the economy in the name of making rain, snow, brutal winters and long, hot summers go away. Such companies should defend themselves and offer an unapologetic salute to the fossil fuels that have improved the quality of life in America. General Motors, which has canceled production of its all-electric Chevy Volt, should salute, rather than apologize for, the internal-combustion engine. It’s one of the great inventions in the history of man.

Companies exist to make products people want. If the public doesn’t want what companies produce, the companies will either make something else or go out of business. These companies should stop apologizing for what they do, and quit feeding the beast trying to drive them out of business.

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