The power of the American consumer is well established. Consumers wishing to encourage certain business practices may employ a variety of measures, including boycotts, advertising campaigns for or against a certain product, and lobbying efforts. While the strength of a fair truth label campaign may ultimately grow with the support of like-minded consumers, corporate shareholders represent another powerful group often unrecognized by consumer activists.
Corporations owe fiduciary duties to their shareholders. For most publicly traded corporations, communication with shareholders takes place in the form of annual shareholder meetings. As corporations become more powerful in American law and society, shareholders who wish to promote a specific cause are becoming more outspoken and influential in corporate shareholder meetings. The result is a unique type of activist: the "cause shareholder."
This paper will examine the duties of publicly traded corporations to their shareholders, and analyze how these duties can empower shareholders to create social change. As part owners of publicly traded companies, cause shareholders have a distinctive platform for sharing their concerns and encouraging corporate action. For the fair truth label campaign, cause shareholders may provide a new avenue of activism: shareholders can pressure corporations from within to promote the fair truth label.
Benedetto Neitz, Michele, "Fair Truth and Fiduciary Duty: The Power of Corporate Shareholders to Make a Difference" (2011). Publications. 585.