Dillard’s Shareholders Make Clear Push for Transparency

Some 46 percent of shares endorse resolution for retailer to publish sustainability report.

By Danielle Lee 

Nearly half of Dillard’s shareholders voted in favor of a resolution urging the company to publish a sustainability report, the retailer reported in a U.S. Securities and Exchange Commission (SEC) filing last week.

In the vote, which took place in May, 23,872,195 shares (46.36 percent) were cast in support of the nonbinding resolution, according to the lead sponsor, Christian Brothers Investment Services (CBIS).  

Disclosed in the apparel and home furnishing retailer’s quarterly SEC filing, the vote calls for Dillard’s to join the many retailers that release sustainability reports. Some 2,000 companies in all sectors report on their environmental, corporate governance and social responsibility practices.

In a formal sense, the resolution actually failed as 27,619,107 shares were cast in opposition and the abstention tally was 8,628,497 shares.

However, the vote, sponsored by institutional investors, puts substantial shareholder pressure on the Little Rock, Ark.-based retailer to exhibit more transparency about its operations.

Recent SEC proposals could drastically limit shareholders’ abilities to submit such proxy-access resolutions. The SEC has received many comments about these proposals to alter rule 14a-8, which governs the filing of nonbinding resolutions.

Among those weighing in, the Social Investment Forum and the Interfaith Center on Corporate Responsibility oppose the changes as impediments to shareholders’ rights.

The deadline for individuals and companies to comment on these proposals is Oct. 2.

In a statement about the Dillard’s vote, CBIS Corporate Advocacy Coordinator Julie Tanner said: “Given the company’s current lack of disclosure and the fact that preparation of this report will provide shareholders with a more complete view of the company’s policies, especially related to the strength of its existing supplier code of conduct, we encourage Dillard’s to join the mainstream of retail industry practices. Apparel manufacturers and retailers such as The Gap, Nike, Target and Timberland have recognized the growing relevance of global labor standards practices and have disclosed their supplier codes of conduct in publicly available reports. We know that Dillard’s cares a lot about these issues and does not want to be looked upon as a laggard in the industry.”

In addition to CBIS, the resolution was also sponsored by the Connecticut Retirement Plans and Trust Funds, the New York City Pension Funds and Amalgamated Bank’s LongView Collective Investment Funds.