Silicon chip giant Intel has amended its corporate charter to include mandatory reporting on “corporate responsibility and sustainability performance.”
The move came after dialogue between Intel and social responsible investing firm Harrington Investments, Inc.
Harrington introduced in December a shareholder resolution to create a Board of Directors Committee on Sustainability at Intel, the second year in a row the firm had done so. The firm dropped the resolution after Intel agreed to the charter amendment.
“It’s in writing now,” said Dale Wannen, Portfolio Manager at Harrington. “It’s not just them saying ‘we’ll do that.’”
Legal opinion could set new precedent
Intel’s decision was influenced by an opinion from its corporate counsel, Gibson, Dunn & Crutcher LLP, which stated that under Delaware law directors have a fiduciary duty to address corporate responsibility and sustainability performance.
This opinion could hopefully prompt other companies to change their charters to reflect ethical mandates, said Peter DeSimone, Director of Programs for the Social Investment Forum (SIF), the US membership association for socially responsible and sustainable investing.
“This is a tremendous finding to come from a corporate counsel and certainly supports SIF and its members thinking.”
The amendment, which is already on the Intel corporate charter (PDF), changes the duties of the Governance and Nominating Committee to include:
reviews and reports to the Board on a periodic basis with regards to matters of corporate responsibility and sustainability performance, including potential long and short term trends and impacts to our business of environmental, social, and
governance issues, including the company’s public reporting on these topics.
Harrington files almost a dozen shareholder resolutions a year, according to Wannen. Using shareholder resolutions as a way to guide corporate behavior has become more frequent in recent years, with some notable triumphs.
Harrington’s President and CEO John Harrington said “this is a major victory for advocates of corporate responsibility and environmental sustainability, and others who strongly believe that these issues are essential in recognizing directors’ and officers’ fiduciary duty,” in a press release.
Intel was #2 on Corporate Responsibility’s “100 Best Corporate Citizens” list. The company did not respond to requests for comment.