Shareholders pass gun-safety proposal at Ruger AGM
Sturm Ruger & Company (Ruger) has lost a shareholder vote on a gun-safety proposal, an issue that has gained greater prominence in governance terms this proxy season.
The proposal from the Sisters of the Holy Names of Jesus and Mary, Oregon received 7,192,660 votes at the company’s AGM earlier this month, with 3,263,446 votes against the proposal and 124,947 votes abstaining. There were 5,072,689 non-votes.
Specifically, the proposal requests that Ruger’s board of directors issue a report by February 8, 2019 on the company’s activities related to gun-safety measures and the mitigation of harm associated with gun products, including the following:
- ‘Evidence of monitoring of violent events associated with products produced by the company
- ‘Efforts underway to research and produce safer guns and gun products
- ‘Assessment of the corporate reputational and financial risks related to gun violence in the US.’
The proposal states: ‘Gun violence is a public health crisis with extraordinary human and financial costs. Given our commitment to safety and responsibility, it is imperative that we assess all options for decreasing the societal impact of gun violence and mitigate financial and reputational risks for the company.’
It adds in part: ‘While efforts to bring smart guns to the US have been unsuccessful to date, the technology exists and there is reason to believe [smart guns] could significantly reduce accidental shootings and suicides. Additionally, a recent study in the American Journal of Public Health [finds] that almost 60 percent of Americans would be willing to buy a smart gun when considering a purchase.’
The board had recommended a vote against the proposal, stating: ‘The company of course does not condone violence involving the misuse of firearms, but we believe the intentional criminal misuse of firearms is beyond our control. Similarly, the constitutional right of firearms ownership carries with it certain responsibilities and the company has long advocated the safe and responsible ownership and use of firearms.’
It adds: ‘Despite assertions to the contrary, effective smart gun technology does not exist; those devices advanced thus far have proven unreliable, easily defeated, or both… [We] also believe adequate safety practices and procedures are available. Similarly, existing laws, if properly enforced, are sufficient to address the public health crisis of gun violence that, first and foremost, is a law enforcement issue.’
In a transcript from the annual meeting included in an SEC filing, Christopher Killoy, Ruger’s president and CEO, says: ‘The proposal requires Ruger to prepare a report. That’s it, a report. The shareholders have spoken, and we’ll follow through on our obligation to prepare that report in due course. What the proposal does not and cannot do is to force us to change our business, which is lawful and constitutionally protected.
‘What it does not do, and cannot do, is force us to adopt misguided principles created by groups that do not own guns, know nothing about our business and, frankly, would rather see us out of business.’
Several large financial institutions have this year changed tack and publicly committed to engagement with portfolio companies around gun control, suggesting that this may join social issues such as political lobbying and human rights on institutional investors’ agendas.
For example, BlackRock released a statement after the shooting at Marjory Stoneman Douglas High School saying it would offer its clients a choice of products that exclude gun retailers or manufacturers. The firm said it had already contacted all major public gun manufacturers and retailers to discuss ‘responsible policies and practices.'
Previously, gun control had largely been a concern from a corporate governance and IR perspective only in terms of faith-based investors.