Intel Amends Charter – Sustainability Now a ‘Fiduciary Duty’
Responding to pressure from an environmental investment group, Intel said it would include “corporate responsibility and sustainability performance” in the committee’s overall policy responsibility. The company’s charter now says it has a “fiduciary duty” to do so.
Intel had been pressured by a shareholder resolution from Harrington Investments. For the second year in a row, Harrington submitted a resolution to amend Intel’s bylaws to create a “Board Committee on Sustainability.”
At first, Intel opposed the resolution but after engaging in dialogue with Harrington, the computing giant agreed to change its corporate charter to require its Governance and Nominating Committee instead serve in that capacity.
Now the Governance and Nominating Committee will “review(s) and report(s) 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.”
Intel sought an outside legal opinion on Delaware Law, finding that directors have a fiduciary duty to address corporate responsibility and sustainability performance as specified in the committee charter.
“Intel has acknowledged in their committee charter, that directors must take into consideration corporate responsibility and sustainability performance, including long and short term trends and impacts on Intel’s business, as part of their fiduciary duty,” said John Harrington, President and CEO of Harrington.
Intel also had its outside legal counsel, Gibson, Dunn & Crutcher LLP, construct a legal opinion confirming that pursuant to Delaware law, corporate responsibility and sustainability reporting based upon the committee’s charter was part of the “fiduciary duty of company directors.”
After that, Harrington said it would withdraw its bylaw amendment resolution.
Earlier in March, it was revealed that U.S. investor groups have filed 95 global warming shareholder resolutions with public corporations, a 40 percent increase over last year.
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