American Funds sets vote on anti-genocide resolution
For the first time, American Funds shareholders this fall will be voting on whether to ask the boards of directors of 16 funds to institute a divestment policy against companies that do business in countries that practice genocide or tolerate crimes against humanity.
For the first time, American Funds shareholders this fall will be voting on whether to ask the boards of directors of 16 funds to institute a divestment policy against companies that do business in countries that practice genocide or tolerate crimes against humanity.
The 16 funds represent $700 billion in assets.
Several of those funds have holdings in such companies as Petro-China, which does business in Sudan, where the government has conducted genocide in the Darfur region.
The shareholder resolution, submitted as part of the efforts of Investors Against Genocide, is non-binding.
It asks the boards to “to institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.”
The boards of directors of the funds expressed opposition to the resolution.
“We believe that considering these issues on a company-by-company basis and as part of the investment management process is preferable to having the fund boards make these decisions,” said American Funds spokesman Chuck Freadhoff.
Eric Cohen, chairman of In-vestors Against Genocide, said the activist group contacted senior executives at American Funds and asked them to embrace the resolution or at least remain neutral.
“We were disappointed that when the definitive [document] was filed, they were opposed to it,” he said.
“There will be a lot of automatic voting that will go the American Funds’ way. Like the other votes, we expect that 20% will vote our way,” Mr. Cohen said.
However, “that 20% will represent a very large number of shareholders that will be angry with them,” he said.
As of June 30, American Funds, advised by Capital Research and Management Co., had $850 billion in assets under management.
The Investment Company of America fund will hold its shareholder meeting Oct. 27.
The votes for all of the other funds involved will be Nov. 24.
Earlier this year, Investors Against Genocide worked with shareholders to introduce similar resolutions on mutual fund proxies at Fidelity Investments and The Vanguard Group Inc.
E-mail Sue Asci at [email protected].
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