We all know about Monsanto.
The agribusiness giant is a huge international corporate entity that wields immense power and courts controversy wherever it operates. We know that Monsanto spends undisclosed millions each year to block elected local governments from introducing and implementing GMO-labeling laws. We know the way that Monsanto has continued to push the use of known carcinogens – like glyphosate in Roundup – in increasing volumes on food crops around the world. We know how Monsanto’s seed programs in countries like India and Bangladesh have driven millions of subsistence farmers into debt and suicide.
But Monsanto isn’t just a nameless multinational corporation.
Monsanto is a publicly-traded company that millions of people around the world have an active stake and say in running. Decades of Monsanto’s policies, driven in part by unchecked corporate leadership, have earned the company the title of “worst corporation in the world.” And Monsanto shareholders have more to be unhappy about than the company’s less than stellar image in the global agricultural market.
In 2015, earnings per share of Monsanto stock declined 9 percent. Shareholder return for 2015, which includes share price appreciation and dividend payment, was in the negative. Since November, Monsanto has reported a loss of $253 million and shareholder value has declined an additional 7 percent, well beyond market losses.
So this week, when Monsanto shareholders assemble in Missouri for the company’s annual general meeting of shareholders (AGM), they’ll have a lot to be unhappy about. That’s why SumOfUs has been working with Monsanto shareholders and institutional investors to demand changes to the company’s corporate structure.
As both CEO and Chairman of the Board, Hugh Grant has unchecked influence over Monsanto’s direction. The combination of these two roles in a single person – something that is rare outside the United States – weakens a corporation’s governance and harms shareholder value.
A number of academic studies have found that an independent board chair improves the financial performance of public companies by being in a better position to oversee the executives of a company, as well as setting a pro-shareholder agenda without the management conflicts that a CEO or other executive insiders often face. Evidence has proven that when firms separate the CEO and board chair roles, it eliminates the conflict of interest that inevitably occurs when the CEO is responsible for self-oversight.
In 2015, we united consumers and shareholders in campaigns against the Monsanto-Syngenta merger, pushed back on lawsuits against GMO labeling in Vermont and even urged Amazon.com to stop selling Roundup products. And this year, Grace Holden, a SumOfUs member and Monsanto shareholder, has submitted proxy resolution #7 to be debated at this year’s shareholder meeting. This resolution would permanently separate the role of CEO and board chair.
Last year, a similar resolution won 19 percent of the necessary votes needed to secure this essential step towards good governance at Monsanto. That’s a huge victory for corporate accountability – and this year, we hope even more shareholders will join with us. Across the US, SumOfUs members are calling and emailing their investment funds, asking them to vote in favor of our motion at Monsanto AGM this week in St Louis. We hope they will vote with us and start a new chapter in Monsanto’s history.
Monsanto has a lot to answer for and we plan to hold the company accountable for all of it in 2016. Together, we can start by making the executives who run global corporations like Monsanto accountable to the people who own them.