Berkshire Hathaway Inc shareholders have rejected several proposals for environmental, social, and governance (ESG) changes at the company during the annual meeting held on Saturday.
The billionaire investor Warren Buffett, who is also the chairman of the conglomerate, along with his board, opposed all the six proposals.
The shareholders voted against disclosing more information about the company’s climate-related risks and greenhouse gas emissions and rejected the call for an independent director to replace Buffett as chairman.
This article will discuss the results of the Berkshire Hathaway annual meeting and their potential implications for the company.
At the annual meeting of Berkshire Hathaway’s shareholders, the majority of shareholders voted against six proposals concerning ESG modifications within the conglomerate.
The rejected proposals included three that called for greater disclosure of climate-related risks and greenhouse gas emissions, as well as efforts to promote diversity.
In addition, a renewed call for an independent director to replace Warren Buffett as chairman was also voted down by a margin of almost 10-to-1.
In addition, a suggestion that Berkshire and its subsidiary companies abstain from taking positions on contentious social and political concerns unless it was essential for business obtained minimal support of less than 1%.
The advocate of the independent chair proposition asserted that it would aid in separating Berkshire from Buffett’s “political activities,” which caused the audience to react negatively when he mentioned the connection between Bill Gates and Jeffrey Epstein, the deceased financier and convicted sex offender.
Despite the push for ESG-related changes, Buffett noted that Berkshire’s operating businesses do not use their resources to promote their own political views and contributions at the corporate level. He added that Berkshire has had a “quite satisfactory experience” overall.
Warren Buffett’s ownership of special shares provides him with an almost 32% voting stake in Berkshire, which makes it challenging for proposals that he opposes to gain approval. The California Public Employees Retirement System (CalPERS), the biggest public pension fund in the United States, co-sponsored one of the climate disclosure proposals that was rejected.
Berkshire Hathaway Shareholders Reject Disclosure on Climate and Diversity
For three consecutive years, the public pension fund, CalPERS, co-sponsored a proposal related to climate disclosure, which was ultimately rejected by Berkshire Hathaway’s shareholders.
Additionally, CalPERS withheld its votes in the re-election of three directors on Berkshire’s audit committee, citing their failure to provide sufficient disclosures of environmental risks. Berkshire shareholders did, however, reelect the company’s 15-person board.
The rejection of these proposals highlights the ongoing tension between ESG-focused investors and companies that prioritize shareholder value over social and environmental concerns.
It also underscores the importance of corporate governance, particularly in companies where a single individual holds a significant amount of voting power.
The impact of the rejection of these proposals is that Berkshire Hathaway will not be required to disclose more information about its climate-related risks, greenhouse gas emissions, and efforts to address them.
The company also will not be required to promote diversity or appoint an independent director to replace Warren Buffett as chairman.
Given that Buffett has special shares that provide him with almost a 32% voting stake in the corporation, it is not unexpected that proposals that go against his wishes would be hard to pass.
Additionally, the rejection of the proposals suggests that Berkshire Hathaway shareholders are generally satisfied with the current management and operations of the company.
However, the rejection of the climate disclosure proposals may lead to criticism from environmental groups and investors who are concerned about the company’s impact on the environment and its efforts to address climate change.
It may also result in continued scrutiny from CalPERS and other large institutional investors who have been pushing for greater disclosure and transparency from Berkshire Hathaway on environmental, social, and governance issues.
