Local SF Bay Area ANCA Chairman and KZV Armenian School student present proposal at annual shareholder meeting
SAN MATEO, Calif.—Shareholders at Franklin Resources, parent company of Franklin Templeton mutual funds, voted for the first time on a genocide-free investing proposal on March 13 coordinated by Investors Against Genocide and presented by the Armenian National Committee of America San Francisco Bay Area Chapter. The proposal is the first shareholder proposal to appear on the company’s annual proxy ballot in nineteen years and possibly the first ever. It requests “that the Board institute transparent procedures to avoid holding or recommending investments in companies that, in management’s judgment, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.” Votes in favor of the proposal represented 8.7 percent of the votes cast, with 7.4 percent of shareholders abstaining and 83.9% voting against the proposal.
Franklin Resources recommended that shareholders vote against the proposal, strongly tilting the bias of the votes. The company is predominately owned by institutional shareholders that almost always vote according to management’s recommendations. Additionally, senior executives of the company, Charles Johnson, Rupert Johnson and Gregory Johnson, collectively own 32 percent of the outstanding shares, representing nearly half of the votes against the proposal.
“Americans, once they become aware of this problem, do not want their pensions and family savings connected to genocide,” states Eric Cohen, chairperson of Investors Against Genocide. “While financial institutions may oppose it, ordinary investors who see the proposal will vote their values and support genocide-free investing. We look forward to future votes at Franklin Resources.” According to a market research study conducted by KRC Research in 2010, 88 percent of Americans would like their mutual funds to be genocide-free.
In presenting the proposal at the shareholders meeting, ANCA-SF Chair Armen Carapetian stated, “Franklin Templeton’s recommendation against the proposal states that ‘fostering economic and business development through investment can often help in achieving reforms.’ In some cases, that statement would be correct. However, it is inappropriate and certainly does not apply to the genocidal regime in Sudan that has resisted international condemnation for ten years and continues its genocide and crimes against humanity against its own people in Darfur and recently in the Nuba Mountains and Blue Nile states.”
Carapetian was accompanied by Rubina Karapetyan, a straight-A eighth grade student from KZV Armenian School in San Francisco. Rubina’s grandfather escaped the genocide waged by Ottoman Turkey in 1915, where 1.5 million Armeninan men, women, and children, including Rubina’s great-grandfather, were killed.
An increasing number of institutions have made the decision to vote in support of genocide-free investing. For example, last year’s vote on genocide-free investing at JPMorgan Chase, drew support from T. Rowe Price, CalPERS, CalSTRS, Connecticut State Pension, Florida State Board of Administration, New York State Pension, NYCERS, Ohio State Teachers Retirement System, AFSCME, and Christian Brothers Investment Services, among many others.
A new US SIF report, “2012 Report on Sustainable and Responsible Investing Trends in the United States,” supports the importance of Sudan-related investment policies as a key shareholder concern. Most strikingly, the report found that Sudan is the top socially responsible consideration for institutional investors.
Franklin Resources (NYSE:BEN) owned 1,479,642,253 shares of PetroChina, as of December 2011. That holding amounted to 7% of the shares outstanding of PetroChina, a company widely recognized as contributing to the genocide in Sudan. Currently, half a million people in the South Kordofan and Blue Nile regions of Sudan are facing relentless aerial attacks, violent displacement, and starvation due to the Sudanese government’s ongoing military assaults. Ongoing government-sponsored genocide in Sudan has spanned more than two decades and resulted in the death of over 2.5 million innocent civilians.
On January 24, 37 local and national human rights and religious groups sent an open letter to Charles Johnson, Rupert Johnson and Gregory Johnson. The letter was signed by local groups such as the Archdiocese of San Francisco and the San Francisco Bay Area Darfur Coalition, as well as national groups such as American Jewish World Service, the Enough Project, the Armenian National Committee of America, the Unitarian Universalist Association and the Jewish Council for Public Affairs. It was also signed by notable genocide and corporate governance scholars.
Shareholders approved a similar genocide-free investing proposal at the ING Emerging Countries Fund in June 2012 by a wide margin with 59.2% of votes in favor of the proposal and only 10.8% opposed. Unlike Franklin Resources, ING took a neutral position on the proposal allowing the views of individual shareholders to be represented without the disadvantage of institutional bias.
Investors Against Genocide withdrew its shareholder proposal at TIAA-CREF when it adopted a public policy against investments tied to genocide. TIAA-CREF subsequently divested holdings in oil companies helping to support the genocide in Darfur, Sudan. American Funds divested its holdings in PetroChina following a well-publicized shareholder vote on genocide-free investing.