Corporate Shakedown

Shareholder activists driving liberal shift of American business

Sen. Bernie Sanders/ Getty Images
August 12, 2019

American businesses are adopting increasingly liberal policies and public stances due to pressure from progressive activists within corporate America, rather than social media outrage cycle, according to corporate watchdogs.

The practice of marshaling a minority of stakeholders in a company to advance a political cause is often referred to as "shareholder activism," and the tactic has proven effective in the 21st century. Shareholders of publicly-traded corporations push for reforms aimed at achieving political, rather than business, ends. The results can be seen in major American companies publicly backing liberal positions on major culture war issues, from the "racism" of the American flag, to transgender bathrooms, and pro-life legislation.

Stephen R. Soukup, vice president of the market research firm "The Political Forum," works to inform his audience of this corporate bias through his company's newsletter. He said he worries that not enough conservatives are aware of this leftwing bias within the shareholding world to even begin fighting back effectively.

"The initial goal should be to make shareholders and large institutional investment firms aware that this is going on," he told the Washington Free Beacon. "You have no idea how many people have reached out to me saying they had no idea."

The next step, he says, is to get conservatives to create their version of this business strategy that will help restore their influence in the business sphere.

"As conservatives, we would ideally like to avoid government action," he said. "A better alternative is beating them at their own game."

Some conservative activists are now adopting the playbook for their own ends. Justin Danhof, director of the Free Enterprise Project at the National Center for Public Policy Research, works to counter this bias by introducing conservative-minded proposals at shareholder meetings for large corporations such as Amazon and Apple. More recently, he’s focused on countering diversity proposals from liberal shareholders that force corporations to consider different races and genders every time there is an open position in the company. Instead, he introduces what he calls a "true diversity" proposal that focuses on creating a more ideological diversity in workplaces dominated by liberal political thought.

"Corporate American is becoming the new college campus," he told the Washington Free Beacon. "They’re in a bubble—they don’t hear other perspectives."

Danhof’s job is to bring this alternate perspective to shareholder meetings. When he introduced his ideological diversity proposal at Amazon's annual meeting of shareholders in Seattle earlier this year, he was heckled, booed, and even accused of being a member of the KKK.

"The room was all liberal," he told the Free Beacon. "They're the most woke people in Amazon. When they heard conservative ideas, they acted with extreme petulance."

Danhof expressed similar sentiments, saying that neither government regulation or conservative boycotting are an adequate response. Instead, he suggests that conservatives take notes on how socially engaged leftwing activists are regarding hot topic political issues.

"The history of boycotts in the conservative movement is a continual failure," he said. "The left does it with engagement."

Danhof cited progressive engagement regarding Georgia's heartbeat bill earlier this year as an example of how liberals successfully engage the public with their political outrage.

"We need indexes on how different companies treat conservatives," he said.

Danhof also raises awareness of the role of proxy services like the Institutional Shareholder Services in influencing corporations to shift leftwards. Together, he says, with the liberal shareholder activists, they make up a highly effective progressive advocacy machine that has become increasingly powerful and partisan in recent years.

"ISS did once care about governance," he said. "Now they care about the social justice warrior agenda … they believe in AOC's socialist economic view."

ISS did not return request for comment.

According to Danhof, liberal shareholders make proposals reforming corporations and cite supporting studies funded by firms connected to their investment fund network. Then, he says, proxy services like ISS endorse the proposals so that eventually, the corporations adopt them, effectively shifting the company leftwards. Popular areas of reform are diversity requirements and environmental restrictions.

Influential corporations such as Facebook and Amazon have received backlash from political figures ranging from Fox News host Tucker Carlson to Sen. Tom Cotton (R., Ark.) and Sen. Josh Hawley (R., MO), as well as presidential hopeful Elizabeth Warren (D., Mass.). A recent Washington Free Beacon investigation found that employees of Google, Twitter, and Facebook did not make any contributions to President Donald Trump's reelection campaign during the second quarter, despite giving a combined $250,000 to leading 2020 Democratic candidates. Soukup said that in the midst of the bipartisan condemnation of big tech corporations, he thinks these companies have to make more in-roads with a conservative movement that is more skeptical of Big Tech than the average liberal.

"The populist revolt on the right, which I think started with the Tea Party, was a big part of Trump’s election," he said. "On the left, if you take out the young agitators in the Democratic caucus, plus [socialist Vermont Sen. Bernie] Sanders, you find that most do not demonize corporations … young players on the left are not reading from the same book."

To Danhof, the key for a united conservative front to counter this corporate bias is mimicking the successful leftwing system of action.

"If the left can do it, then so can conservatives," he said.

Published under: Progressive Movement