Women in Shareholder Activism

Women in Shareholder Activism Sarah C. Haan* CONTENTS INTRODUCTION ..................................................................................... 469 I. WOMEN & SHAREHOLDER ACTIVISM BEFORE THE NINETEENTH AMENDMENT......................................................................................... 471 A. Ellen M. Henrotin & the Chicago Women’s Shareholder Movement ..................................................................... 472 B. Louise de Koven Bowen: The Chicago Movement in the Progressive Era........................................................................... 474 II. WOMEN & SHAREHOLDER ACTIVISM AFTER THE NINETEENTH AMENDMENT......................................................................................... 476 III. WOMEN SHAREHOLDER ACTIVISTS IN THE MODERN ERA ............. 485 A. Early Organizational Activism ..................................................... 486 B. Religiously Affiliated Activism...................................................... 487 C. Women Emerge as Leaders of Corporate Advisory Entities ........ 488 D. Facebook, Women, and Shareholder Activism............................. 489 CONCLUSION ......................................................................................... 491 INTRODUCTION Even a cursory review of the history of American environmental, social, and corporate governance (ESG) shareholder activism reveals the presence of women leaders. This Article sketches some of this history and interrogates the role of women in the shareholder activism movement. That movement typically has involved claims by minority shareholders to * Class of 1958 Uncas and Anne McThenia Professor of Law, Washington and Lee University School of Law. For their generous insights and feedback, the author thanks all of the participants in this symposium, and especially Afra Afsharipour, Martin Luther King Jr. Professor of Law at the University of California, Davis School of Law; and Darren Rosenblum, Professor of Law at McGill University Faculty of Law. 469 470 Seattle University Law Review [Vol. 46:469 corporate power; activists are nearly always on the margins of power, though minority shareholders may, collectively, represent a majority interest. This Article ascribes women’s leadership in shareholder activism to their longstanding position as outsiders to corporate organization. Women’s participation in shaping corporate policy—even from the margins—has provided women with unique opportunities for leadership and challenged stereotypes about the role of women in public life, while also challenging and reforming business practices and policies. The comparatively leading role of women in shareholder activism contrasts with the subordinated role of women in the management of public companies. For many decades, women could play an active role as shareholders in large public companies, but virtually no role in the management of the same companies. Thus, by the 1950s, shareholders’ meetings themselves were deeply gendered events; the throngs of shareholders who attended town-hall-style meetings included both men and women, but the raised stages at the front of those meetings, upon which the board of directors and other officers sat, were male-only. The gendered nature of corporate power was on visual display, and women were relegated to the literal periphery. The rise of institutional investing at the end of the twentieth century shifted women’s participation in the shareholder activism movement further to the edges, at least at first. Yet women played key roles in information intermediaries and proxy advisory firms. In the current period of asset manager activism, women are moving up the ranks of management, but they continue to experience sexism in the shareholdermanager dynamic. Sometimes, the gender of shareholder-activists still seems to matter. Consider what it says about American corporate governance that women have found greater opportunities to participate in high-level corporate decision-making as outside-antagonists (shareholders) than as insiders (officers and directors). Though it is tempting to romanticize shareholder activism as a means to participate in corporate organization, we must resist this. Activists absorb significant costs, and women activists have been targets for ridicule and disparagement. Shareholder activists do not receive the rich compensation enjoyed by corporate officers and directors. And any gains to the company’s bottom line or reputation that result from shareholder activism are shared with numerous others. The activism of the small shareholder is largely a thankless effort. Much of this Article sketches the history of American women in shareholder activism, beginning in the 1890s with Ellen M. Henrotin, perhaps the first person to recognize the potential for collective action among women shareholders. This Article describes the ESG activism of 2023] Women in Shareholder Activism 471 Louise de Koven Bown, another Chicago socialite, and explores the rise of women activists after World War II, led by Wilma Soss, who pursued a mix of social and governance reforms and even achieved some fame in popular culture. Unlike their male counterparts, such as Lewis Gilbert, women activists were savaged by the press. This Article describes the role of women shareholder activists after the emergence of institutional investing, from the Sisters of the Precious Blood, a group of nuns who waged a shareholder activism campaign against the manufacturers of infant formula, to the Corporate Social Responsibility movement of the 1960s and 1970s and the leadership of such women as Alice Tepper Marlin, Joan Bavaria, Amy Domini, and Nell Minow. Finally, this Article describes the experience of a twenty-first century asset manager who ran into sexism in the shareholder-manager dynamic and exposed it in the Financial Times in 2018. This Article concludes by summing up some key insights from this history. I. WOMEN & SHAREHOLDER ACTIVISM BEFORE THE NINETEENTH AMENDMENT Women have been shareholders in American corporations since the nation’s origin.1 However, women became salient as a shareholder population only at the end of the nineteenth century, particularly at banks and railroad corporations.2 From the late nineteenth century until 1920, when women gained the vote for the first time in American democracy, corporate governance was the sole context within which women could express their views on policy or exercise the power of the franchise. Before 1920, corporate organization represented something that, for American women, was unique: the opportunity to fully participate in the governance of an institution through voice and vote. Indeed, newspaper reports from the nineteenth century documented women attending shareholder meetings and speaking out on issues of corporate policy.3 1. See, e.g., Sarah C. Haan, Corporate Governance and the Feminization of Capital, 74 STAN. L. REV. 515, 530–31 (2022) (i (...truncated)