Investors in American Outdoor Brands Corp., the parent of Smith & Wesson, on Tuesday won a shareholder vote urging the firearms maker to do more to address gun violence.
The proposal asks the maker of Smith & Wesson guns to track shootings involving the company’s products and consider investing more in technology to prevent their unauthorized use. Nearly 70 percent of investors in Sturm, Ruger & Co. backed a similar shareholder proposal at that company in May.
The company’s board of directors had strongly recommended a vote against the resolution. American Outdoor said before the vote that a report like the one described in the proposal isn’t necessary because it already discloses its reputational and financial risks. The board in proxy materials said, “We do not believe that a report from us would in any way advance gun safety, mitigate criminal gun violence or better educate our stockholders with respect thereto. In fact, the preparation of a report from us as requested by the proponent would be redundant and therefore an unnecessary undertaking and expense.”
Speaking at the meeting after the results of the vote were revealed, American Outdoor Brands CEO James Debney said the vote was “politically motivated,” and that he was “disappointed” the shareholders had not worked through legislatures, according to CNBC.
The proposal, filed by Sisters of the Holy Names of Jesus and Mary, U.S.-Ontario, a member of the Interfaith Center on Corporate Responsibility, requested the company’s board of directors issue a report by Feb. 8, 2019, “at reasonable expense and excluding proprietary information on the company’s activities related to gun safety measures and mitigation of harm associated with gun products,” according to proxy documents.
Sister Judy Byron, member of the Adrian Dominican Sisters and director of the Northwest Coalition for Responsible Investments in Seattle, said the report she and her fellow religious women seek is in the best interests not only of shareholders but also of society. American Outdoor Brands warned investors in June that “actions of social activists” pose a risk to its bottom line.
She cited the use of Smith & Wesson firearms in by gunmen in mass shootings at Marjorie Stoneman Douglas High School in Parkland, FL, a movie theater in Aurora, CO, and a community center in San Bernardino, CA.
The ballot question asks the company to do three things:
- Monitor violent events in which Smith & Wesson products are used.
- Prove the gunmaker is working to produce safer firearms and related products.
- Assess the risks to the gunmaker’s reputation and financial well-being from gun violence in the U.S.
“We are all looking for solutions to gun violence,” said Byron, who presented the resolution at the meeting, in an ICCR news release. “The shareholders who filed this proposal believe that, as a company directly implicated in these events, American Outdoor Brands is obligated to help find them. Not only can these solutions help save many lives, they may help AOBC’s long-term business prospects in the process, and we are gratified that so many of our fellow shareholders supported our resolution today.”
The vote is non-binding, but it puts public pressure on American Outdoor Brands to comply. Ruger has said it will comply despite the resolution being non-binding.
The Interfaith Center on Corporate Responsibility is a coalition of 300 faith-based pension funds, universities and other asset owners as well as secular foundations, investment management firms, investment consulting firms and unions, representing more than $400 billion in combined assets.