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AFL-CIO Proxy Voting

By Harvard Law School Program on Corporate Governance

The AFL-CIO has issued a new report, Facts about the AFL-CIO?s Proxy Votes, to explain how the AFL-CIO votes in corporate director elections. In summary, the AFL-CIO votes for corporate directors based on recommendations by an independent proxy advisor following proxy-voting guidelines that address corporate governance issues, and not union representation.

Last year, an unpublished, unreviewed paper by Aswini Agrawal, a graduate student at the University of Chicago, was posted on this blog, making the very serious and completely false claim that the AFL-CIO is more likely to support directors at companies whose employees are no longer affiliated with the AFL-CIO.

Despite publishing his accusations in news sources and on public websites, Agrawal has refused to discuss his findings, disclose his data set, or respond to substantive criticisms of his paper. After receiving an email requesting peer review and the release of his data, he did publish a revised version on February 7th that failed to address any of the AFL-CIO?s comments, and further failed to release his data.

A letter from the AFL-CIO to Mr. Agrawal pointing out the methodological flaws in his paper and again seeking the release of his data can be viewed here.

Every year, the AFL-CIO publicly discloses each proxy vote that it casts and the corporate governance policy rationale for each vote. Disclosure of the AFL-CIO?s proxy voting record enables interested parties to monitor how the AFL-CIO voted in specific director elections and to make their own determination as to whether these votes are in shareholders? best interests.

While the information disclosed in the AFL-CIO?s report directly contradicts the Agrawal paper, no meaningful conclusion can be drawn from any correlation between the AFL-CIO?s proxy voting and union representation. The AFL-CIO?s proxy votes are based on corporate governance issues, and any correlations with union representation are entirely coincidental and unlikely to persist over time.

The AFL-CIO has requested that the Agrawal paper be revised or withdrawn. The report Facts about the AFL-CIO?s Proxy Votes is available here.

Full post as published by The Harvard Law School Corporate Governance Blog on March 11, 2008 (boomark / email).