NEW YORK - July 18 - Inside the meeting, shareholders and advocacy groups press TIAA-CREF officers to explain several governance scandals in the past year and its investment in some socially irresponsible companies; demonstrators outside the building take their case to the public.
As corporate scandals continue to rock Wall Street, the nations largest pension fund is once again coming under fire from the Make TIAA-CREF Ethical coalition.* At the CREF annual shareholders meeting July 19, advocacy groups are joining shareholders to demand greater accountability from TIAA-CREF, the $350 billion pension fund for educators and researchers. As demonstrators picket outside TIAA-CREF headquarters with banners, placards, and costumes, shareholders will speak up inside the annual meeting. Two years ago, at an annual meeting also held in New York, TIAA-CREF Chair and CEO Herbert Allison was pounded by shareholders for his exorbitant salary. Now shareholders want to know why the self-proclaimed governance leader is itself coming under scrutiny. After SEC complaints, two trustees had to be removed because of financial conflicts of interest. Additionally, their CFO, now on a leave of absence, is under investigation by the SEC and DOJ for practices in her previous job. Finally, after doing an insufficient background check, they hired a criminal, resulting in a breech in security and a subsequent lack of candor about events surrounding her removal.
Says activist and coalition representative Jaime Lagunez, of frente civico por la defensa del Casino de la Selva, For a group claming leadership in governance and social responsibility, they need to look in the mirror and recognize their own shortcomings in these areas. They need to be more vigilant in their own corporate governance and they need to divest from corporations involved in human rights violations and in public health, community, and environmental degradation. Instead they need to be investing in socially responsible ventures.
The Make TIAA-CREF Ethical coalition points to contradictions between the companys stated policies and its investments. TIAA-CREFs Policy Statement on Corporate Governance states that TIAA-CREF believes that building long-term shareholder value is consistent with directors giving careful consideration to issues of social responsibility and the common good. We recognize that efforts to promote good corporate citizenship may serve to enhance a companys reputation and long-term economic performance. The policy further states that companies should be concerned with "environmental impact...the corporation's communities and constituencies... deliberate and knowing exploitation of any non-shareholder constituencies... human rights... labor issues
At the same time, notes the coalition, TIAA-CREF invests in:
- Nike and Wal-Martcondemned for selling products produced by overseas sweatshop labor
- Wal-Mart widely criticized for its domestic labor practices, hurting local businesses, and promoting urban sprawl
- Unocalhas business ventures with Burmas brutal government
- Philip Morris/Altriaresponsible for Marlboro, the leading cigarette brand among youth
- Costcopromotes police brutality in Mexico and the destruction of its cultural heritage and the environment
- Coca-Cola markets nutritionally deficient products to kids at home, tied to water shortages abroad and is complicit in gross human rights abuses, including murder, torture and kidnapping in Colombia (TIAA-CREF divested its harmful World Bank bonds and should state it will buy no more.)
"Stockholders by definition are owners of a company and with ownership comes responsibility," says Corporate Campaign, Inc./Campaign to Stop Killer Coke director Ray Rogers. "I do not believe TIAA-CREF participants want to be associated with the tobacco industry or companies like Coca-Cola that are complicit in widespread human rights abuses including kidnapping, torture, and murder; fraudulent business practices and undermining the health and well-being of children worldwide."
The coalition asserts that TIAA-CREF must divest from these companies immediately or engage in transparent attempts to influence them to change their behaviors. It is calling for TIAA-CREF to set a deadline to divest from the companies if they do not make sufficient changes.
According to coalition group representative Neil Wollman, a professor at Manchester College in Indiana, TIAA-CREFs claims that non-financial criteria cannot affect their financial decisions is inconsistent with their governance document. Wollman asks, "Would TIAA-CREF have invested in the production of Nazi gas chambers in World War II if it meant a healthy financial profit? TIAA-CREF must either agree that moral issues are relevant to investing, or they must admit that such investment is OK with them. It's time for TIAA-CREF to answer these kinds of questions to shareholders, stakeholders, and the media. Important moral concerns are at stake here."
According to Wollman, TIAA-CREF also reneged on promises made over a year ago that it would address the concerns of the Social Choice for Social Change campaign, a group in the coalition that is seeking investment in community development and other positive ventures. Wollman says that top TIAA-CREF officers engaged in dialogue with the group for a year, then rejected all but one request. He notes, "Where is the concern for shareholder voices that they proclaim? Where is the concern for social and corporate responsibility they profess? How can one take seriously their tag line, Financial Services for the Greater Good?
Howard Zinn, a noted historian, says, I hope that more and more people will insist that TIAA-CREF funds be invested in socially responsible ways. University of Pittsburgh Professor Dennis Brutus, the anti-apartheid campaigner who spent time in prison with Nelson Mandela for opposing apartheid in South Africa, says, Not only interest, but the interests of the people must be borne in mind when making sound and moral decisions.
TIAA-CREF July 19 Demonstration
Demonstration: Outside TIAA-CREFs corporate headquarters and raising of voices inside to urge fund to divest of Costco, Wal-Mart, Coca-Cola, Nike, Unocal, Philip Morris/Altria (and pledge no reinvestment in World Bank bonds). Instead, CREF should invest in life-promoting ventures.
When: Tuesday, July 19, 8-10 AM. (CREF meeting starts at 9 AM.)
Where: TIAA-CREF, 730 Third Avenue (between 45th and 46th), Manhattan, NYC
* The Make TIAA-CREF Ethical coalition includes: The US Campaign for Burma, Corporate Accountability International (formerly Infact), World Bank Bonds Boycott, Press for Change, Social Choice for Social Change, Canadian Committee To Combat Crimes Against Humanity (CCCCH) , Citizens Coalition (Frente Civico), Educating for Justice, National Community Reinvestment Coalition, National Congress for Community Economic Development, Campaign to Stop Killer Coke/Corporate Campaign, Inc., Campaign for a Commercial-Free Childhood, and Sprawl-Busters.