Meet the activist shareholding nun

By Anthony Reuben
Business reporter, BBC News

Picture the scene: you are chairing your company's annual shareholders' meeting, there is somebody raising issues you really do not want to discuss and you are desperate for her to sit down and be quiet.

Some of these things sound like very small things but they're very big when you're the worker that has to endure this every day Sister Susan Mika

Oh yes, and she's a nun.

Sister Susan Mika is one of a group of religious activist shareholders who were raising corporate governance issues with companies before many had even heard of the concept.

"They bring a combination of owning a bit of your company and being from the religious community," says Jonathan Halpern director of research and advocacy from the consultancy Sustainability.

"That means they get a little more time at shareholder meetings and it's a little bit harder to cut them off."

Sister Susan says her work is consistent with her religious calling.

"To me it fits right in to our mission of helping people, looking at the stewardship of creation, looking at what we're doing to preserve our world and pass it on to the next generation," she says.

Factory conditions

Ten years ago, Sister Susan turned up at the Alcoa general meeting to raise the issue of how workers at plants in Mexico were being treated.

"We took workers to the annual meeting in Pittsburgh and the workers presented their information to the shareholders," she says.

"The chief executive was Paul O'Neill [later US Treasury Secretary] and he agreed to meet with us.

"He went down to the factories in Mexico himself and he made significant changes in those factories."

Mr O'Neill raised wages at the plant the following day, dismissed the chief executive of that division of the company and removed rules that required staff to ask supervisors for keys and toilet paper if they wanted to use the lavatories.

"Some of these things sound like very small things but they're very big when you're the worker that has to endure this every day," Sister Susan says.

Pioneers

Sister Susan is part of the St Scholastica Benedictine Monastery in Boerne near San Antonio, Texas.

We use a variety of strategies with companies depending on what's working Sister Susan Mika

She works with a network of other like-minded monasteries and in 1982 became director of a Texas organisation, which is now called the Socially Responsible Investment Coalition.

She is also involved with the Interfaith Centre on Corporate Responsibility (ICCR), which is a New York-based coalition of 275 faith-based institutional investors.

"There are so many other institutions today doing this kind of work, but religious organisations really were the pioneers," says Professor Sandra Waddock from Boston College's Centre for Corporate Citizenship.

"They realised that by owning shares they could work within the existing system.

"There are certain nuns who are notorious for standing up at shareholder meetings and not taking 'no' for an answer."

The ICCR was very active in putting pressure on companies not to work in Apartheid South Africa.

Its first shareholder motion was an Episcopal Church resolution at General Motors against working in South Africa.

Media attention

Every now and then, Sister Susan's work attracts a great deal of attention to her monastery.

Religious groups have used a variety of innovative strategies

At first, she says, reporters were puzzled.

"One of the first resolutions that some of the groups that we were involved with was raising questions about the building of a nuclear plant outside Houston," she says.

"The press was quite surprised that we would get involved with that issue and the phone rang off the hook for several days."

Last year, an investigation by the Wall Street Journal attracted a great deal of interest in her work.

A former Wal-Mart employee said that the retailer had been directing surveillance operations on some of its critical shareholders, including the Benedictine Sisters of Boerne, Texas and other ICCR members.

Sister Susan says it took a long time to get to the bottom of what had been going on.

"Eventually [Wal-Mart] sent a fax saying that it was a suggestion but nothing was done about it, but it did cause an uproar," she says.

She adds that she was particularly disappointed because she had such a long-term relationship with the retailing group.

"I've been interacting with Wal-Mart for 17 or 18 years myself," she says.

"You can't argue with this long-term relationship of raising questions."

Innovative methods

Putting up resolutions at annual meetings is not their only weapon, though.

"Another is dialogue, another might be attending the annual meetings of the companies and speaking to the shareholders and the board of directors, and sometimes letter writing," Sister Susan says.

"So we use a variety of strategies with companies depending on what's working."

Other religious groups have tried even more innovative ways to put pressure on businesses.

The Evangelical Environmental Network ran a campaign against gas-guzzling sports utility vehicles under the slogan "what would Jesus drive?".

Owning the shares

The tricky part for activist investors is that if they want to put up a stockholder resolution then they have to own at least $2,000 (£1,030) of shares in that company.

The problem is that they are investing ministry funds and pension funds and have strict rules about what sort of companies they are allowed to invest in.

The restrictions are known as the screen and they stop the religious organisations' money being invested in companies involved with, for example, weapons, alcohol or gambling.

"Some of the groups that I've been working with have been raising questions for the last four years with Halliburton," Sister Susan says.

"In many portfolios that would be screened out, but some groups were able to purchase Halliburton in order to be able to raise the question."

So some religious groups have ended up owning shares in a company specifically because they object to some of its activities.