US: Activist investors pressure PepsiCo
PepsiCo has defended its position within the US Chamber of Commerce following criticism from social activist investment groups.
Asset managers Walden Asset Management and Domini Social Investments last week called for a shareholder vote to force PepsiCo's independent directors to review contributions made to trade groups such as the Chamber of Commerce.
They said that PepsiCo's membership of the Chamber's board can be widely perceived as supporting and promoting the Chamber's political agenda. The fund managers said that this could have a negative impact on a company with a strong reputation for good governance and corporate responsibility.
Timothy Smith, senior vice president of Walden Asset Management, which owns PepsiCo shares, said that the Chamber of Commerce's political agenda often undermines "the very leadership these companies demonstrate on sustainability".
He added: "As board members and major corporate contributors to the US Chamber of Commerce, [the firms] play a passive and compliant role, remaining silent while the Chamber reportedly poured $75m into the 2010 election while working to unseat any member of the US Congress who voted in favour of healthcare reform."
A spokesperson for PepsiCo told just-drinks today (8 November): "PepsiCo is a member of the US Chamber of Commerce because it has a long history as an effective advocate of business. While it would be unlikely and unrealistic for our company to agree with any outside group on every issue, having the flexibility to enter into coalitions such as this one is critical in advancing sound public policy."
So far, three other companies - Accenture, IBM and Pfizer - have been bit with a similar allegation from the same investment funds.
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