Financial History Issue 127 (Fall 2018) | Page 18

style. And although Soss drew criticism for her acid comments, she earned enor- mous respect as well. A front-page Wall Street Journal article in 1963 highlights her blistering critique of IBM’s skimpy post-meeting report along with a resolu- tion requiring more detail. In response, Chairman Thomas Watson Jr. invited her to IBM’s headquarters, where he accepted her proposal. By the early 1960s, the Gilberts bragged in their annual reports of many impres- sive turnouts: up to 10 meetings drew more than 1,000; two dozen between 300 and 900; and AT&T, a bellwether boast- ing millions of shareholders, set the era’s record at 12,000. A 1964 New York Times story reported: “The vociferous minority shareholders helped popularize meetings by their persistent attendance and their keen questioning on controversial mat- ters.” The Gilberts, who devoted a section of their reports to press coverage, declared in 1965: “The press throughout the nation showed a growing interest in what takes place at the annual meeting.” New Yorker columnist John Brooks reported on several annual meetings in 1966. Altogether, he found the action lively and unruly, laced with ill-mannered verbal dueling and removal of hecklers. But he also heard substantial dialogue that put a human face on corporate executives and shareholders. His chief takeaway: pro- fessional shareholders helped reveal exec- utive personalities, as the Q&A “brought the companies to life.” Calvin Trillin made the rounds in 1972, reporting in The New Yorker a more cyni- cal synthesis of the era’s quest for share- holder democracy. Critics saw the gadflies as abetting a charade, under the pretense that shareholders exercised control, serv- ing management by projecting the false appearance of democracy. But while most shareholder proposals garnered few votes and rarely passed, in aggregate over those decades the gadflies—along with man- agement—made shareholder primacy the norm in corporate life. Trillin also noted the arrival of a differ- ent breed of activists at the annual meeting, focused on social responsibility. They first appeared in 1967 at the Eastman Kodak meeting, where Saul Alinsky challenged its minority hiring practices and, after debate, the company agreed to reforms. The approach gathered force throughout the 1970s, as social activists won court Wilma Soss (left) and Lewis Gilbert (right) at the 1957 New York Central annual meeting. rulings drawing on earlier victories by the Gilberts, insisting that management put shareholder proposals on diverse subjects to a vote “to give true vitality to the con- cept of corporate democracy.” The Project for Corporate Responsibil- ity emerged, mounting its famous Cam- paign GM, which used shareholder pro- posals and the annual meeting on behalf of the rights of others stakeholders, just as the gadflies had in the name of sharehold- ers. Ralph Nader advanced the interests of consumers against corporations through annual meetings as well. Shareholder activist Evelyn Davis rose to fame during 16    FINANCIAL HISTORY  |  Fall 2018  | this period, though running counter to the social activists and sometimes against the Gilberts and Soss. For instance, she repeatedly offered shareholder proposals to prohibit corporate donations to chari- table organizations. Amid this activism, proposals arose to abolish annual meetings. Proponents argued they were no longer useful to corpo- rations; “crushing bores,” was a common description. In 1972, Delaware, a leading state of incorporation, updated its law to let shareholders act by written consent rather than at meetings. In a New York Times op-ed, J.B. Fuqua of Fuqua Industries