Hold onto your seats, because the culture war has officially entered the boardroom. Activist investors are fed up with what they describe as “woke” policies that prioritize political agendas over shareholder value. Leading the charge is the National Center for Public Policy Research (NCPPR), aiming to put a stop to these companies’ controversial stances. Two major retailers, Target and Dick’s Sporting Goods, are under fire.
Let’s dive into the nitty-gritty. At Target, the investor backlash comes in the wake of last year’s Pride Month displays, which included products such as female-style swimsuits designed for “tucking”. This sparked outrage and led to significant backlash, with some stores reportedly instructed to relocate these displays to avoid a “Bud Light situation.” Activists argue that the fallout from these decisions has hurt sales and stock prices, culminating in a staggering $12 billion lawsuit against the company.
The NCPPR isn’t pulling any punches. They want Target to produce a report detailing its partnerships and support for what they term “divisive social and political organizations.” One of the primary targets? The Human Rights Campaign (HRC), which the NCPPR claims has aggressively pushed radical gender theory through its partnership with Target. The retailer’s board, however, has urged shareholders to vote against this proposal, branding it as unnecessary and counterproductive.
But Target isn’t the only one feeling the heat. Over at Dick’s Sporting Goods, the NCPPR is pushing for a bylaw amendment that would waive the business judgment rule, increasing board accountability for any political or ideological actions. This proposal stems from a past incident where Dick’s stopped selling assault-style weapons following the Parkland shooting. Then-CEO Ed Stack made it clear that financial implications were secondary to what he considered the right decision. The NCPPR’s proposal seeks to refocus Dick’s on shareholder value rather than political statements.
Target, Dick’s Sporting Goods went ‘woke.’ Here’s how that worked out with investors… https://t.co/hyv8P4F9HT
— BPR (@BIZPACReview) June 12, 2024
Dick’s board has unanimously recommended a vote against the proposal, contending that it likely violates Delaware law. Nevertheless, the push for greater accountability is gaining traction among shareholders who are tired of seeing their investments used as platforms for political activism.
The Wall Street Journal has reported a rise in “anti-woke” shareholder activism, highlighting a growing trend of investors challenging corporate decisions that they believe stray too far into the realm of politics. Despite this momentum, none of the NCPPR’s proposals have passed so far, underscoring the uphill battle faced by those seeking to pivot these companies back towards a more neutral stance.
What’s at stake here isn’t just a clash of ideologies, but the very essence of corporate governance. Should companies prioritize social justice initiatives, even at the risk of alienating some customers and investors? Or should they remain apolitical, focusing strictly on maximizing shareholder value?
The NCPPR is clear on where it stands. For them, this isn’t just about balance sheets—it’s about resisting what they see as an overreach of corporate power into the political sphere.