The 3rd US Circuit Court of Appeals has ruled that Walmart does not have to let shareholders vote on a proposal by New York City's Trinity Church, which owns about $300,000 worth of Walmart stock, that would have forced the retailer's board to tightly supervise the sale of guns with high-capacity magazines.
The proposal, which was initiated by Rev. Dr. James Cooper, rector of the wealthy and socially progressive Episcopalian parish, essentially argued that the sale of such products put public safety at risk and also potentially hurt the company's reputation and the values that create its brand equity.
Walmart's argument has been that to allow such a proposal to be voted on by shareholders would open the door to a wide range of proposals that would make corporate governance impossible. It originally won that argument before the US Securities and Exchange Commission (SEC), but Trinity Church appealed to the courts and won. That prompted Walmart to appeal to a higher court, which produced this result.
Trinity has reserved the right to appeal further up the judicial once it has digested the opinion. In a statement, it said that it was "disappointed with the ruling, but pleased that we have been able to draw attention to an important issue of corporate governance and social responsibility."
The proposal, which was initiated by Rev. Dr. James Cooper, rector of the wealthy and socially progressive Episcopalian parish, essentially argued that the sale of such products put public safety at risk and also potentially hurt the company's reputation and the values that create its brand equity.
Walmart's argument has been that to allow such a proposal to be voted on by shareholders would open the door to a wide range of proposals that would make corporate governance impossible. It originally won that argument before the US Securities and Exchange Commission (SEC), but Trinity Church appealed to the courts and won. That prompted Walmart to appeal to a higher court, which produced this result.
Trinity has reserved the right to appeal further up the judicial once it has digested the opinion. In a statement, it said that it was "disappointed with the ruling, but pleased that we have been able to draw attention to an important issue of corporate governance and social responsibility."
- KC's View:
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If I were Walmart, I might be a little careful. It sounds like both sides are going to keep appealing this thing until they simply can't appeal any higher ... but in the end, Trinity Church may have an in with the ultimate higher power that will make the final judgement about who was right and who was wrong.
As I've said here before, I tend to side with Trinity Church on this one, and not just because, having not been raised in a gun culture, I tend to have a reading of the Second Amendment that is at odds with how people who were raised in a gun culture read it.
Rather, I side with Trinity Church because I think shareholders ought to be able to make these points and have them considered by their brethren, and that boards of directors ought to be forced to deal with issues like these in a granular sense. I firmly believe that more boards of directors ought to be forced to take a broader approach to oversight, with greater legal and financial culpability, than in the past.
