For Immediate Release
Contact: Julie Goodridge, NorthStar Asset Management, Inc.
Boston, Massachusetts
617-522-2635
jgoodridge@northstarasset.com

On June 2nd, Home Depot shareholders will vote on a shareholder resolution brought by NorthStar Asset Management, Inc, a Boston-based socially responsible investment firm, to allow shareholders a say on political contributions made by their company, a direct response to the 2010 Citizens United ruling by the United States Supreme Court.

NorthStar filed a shareholder resolution seeking a vote on political spending, fearing that its fiduciary obligation to protect client assets might be at risk if executives were allowed to continue to make political contributions outside of shareholder control. NorthStar contends that company political contributions that are incongruent with stated company values or policies create risks to the company’s brand, reputation, and ultimately shareholder value.

“The shareholders are the owners of the company,” says Julie Goodridge, CEO of the wealth management firm based in Boston that introduced the measure. “They need to be voting on political contributions.”

In July 2010, Target Corporation made a contribution to Minnesota Forward, a group that supported an anti-LGBT rights candidate; the corporation then faced a boycott and a 1.3 billion dollar drop in stock value. “We do not want to see the same happen to Home Depot,” Goodridge said, pointing out, “It is our fiduciary duty to be aware of corporate actions that put shareholder value at risk.”

In the Citizens United decision, the Supreme Court commented, “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

Yet Home Depot founder and retired CEO Bernie Marcus stated in the Wall Street Journal in 2008 (“Bad Labor Law Is a Path to Economic Ruin” 08/26/08) that companies should use corporate, and thus shareholder, resources for political means. “Even with an official policy guiding Home Depot’s political contributions, significant incongruence between the company’s stated values and its political giving process exists. Standards and ethics made clear by our corporation, we believe, increase our company’s overall ability to return a profit, serve the consumer, and be good corporate citizens. But violating these values by making poor choices in which candidates to support can undermine shareholder value.” Goodridge noted.

“The right to vote is the very core of American democracy. As corporations move to exercising the same status as individuals, NorthStar Asset Management seeks to ensure Home Depot’s voice in the political arena is true to the corporate values that have made the company great” said Goodridge.

Home Depot challenged NorthStar’s resolution with the Securities and Exchange Commission (SEC), claiming (among other things) infringement upon the Company’s ordinary business. The SEC ruled in favor of NorthStar, affirming that resolutions which present a “significant social policy issue” are not excludable even if they may otherwise intrude on ordinary business. According to legal expert Sanford Lewis, who represented NorthStar, “In ruling in favor of allowing the proposal, the staff has essentially determined that after Citizens United, corporate political spending is a significant social policy issue and shareholders can seek to have input on management’s decisions.”

NorthStar Asset Management, Inc., based in Boston, is a wealth management company with a focus on socially responsible investing.