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Shareholders Squeeze Cisco on Human Rights
Comatose51 writes "According to this article at Wired, Boston Common Asset Management, has filed a shareholders resolution asking Cisco to 'adopt a comprehensive human rights policy for its dealings with the Chinese government, and with other states practicing political censorship of the internet.' Cisco so far has asked the SEC to omit this proposal from the agenda for the next annual meeting, claiming that it already has a comprehensive human rights policy in place and that 'Cisco does not participate in any way in any censorship activities in the People's Republic of China ...' However, 'a report from the OpenNet Initiative watchdog group last April singled out Cisco for allegedly enabling the Chinese government's notorious "Great Firewall."' As a shareholder in Cisco, I would like to see this issue discussed and voted on."
In every other discussion on /. about companies in China, we're told that it's the shareholders that force them to operate there. It's nice to see someone who's socially responsible for once.
As a shareholder in Cisco, I would like to see this issue discussed and voted on.
And as executives, the members of the board would like to see this swept under the rug as quickly and quietly as possible. Remember that such a resolution would impede the company's ability to do business in the single fastest growing tech market in the world.
IIRC, I read in a recent issue of IEEE Spectrum that Cisco was also a winner of one of six huge contracts to rebuild China's Internet infrastructure. I highly doubt the Chinese government would have chosen Cisco if they did not have the ability to sensor as the Chinese government on it. If you can lay your hands on that copy of Spectrum, they specifically discuss the censorship issue and speculate as to whether or not Cisco is party to it.
It is a business of network equipment. It has the primary goal of turning over as much equipment as it can, and make as much money as it can... what's the phrase? "Maximizing Shareholder Value".
It's not Cisco's prerogative to try and tell ANY government how to draw up policy... all they need to do is keep selling hardware... at a profit.
If a couple shareholders don't like it, buy them out and tell them to move on. Seriously.
I mean, puh-leeze...
The problem with socialism is that they always run out of other people's money. - Margaret Thatcher
Because some shareholders are still human?
So does Google and so does Yahoo!. But then, Google is held in such high regard here that we can only say such things about them in hushed tones.
I often see people in US, the most capitalistic country in the world (this might start a flame war but I'll say it anyway, that is how I see it), who believe that somehow all these companies have morals and are actually trying to change the world for the better even if it means taking a loss. They view companies as they would like to view individuals: honest, charitable, friendly and in general, very nice. Companies will go to great lengths to project that image onto the public. But the reality is that their only goal is to make money. If something doesn't make money - it is not worth doing, it has nothing to do with morals or principles. Even Cisco's self-imposed resolution to not cooperate with oppresive governments is there to keep people like you happy and investing in them, if they can also get away with cooperating with China and make money off of that, they'll do that too.
Sometimes the goverment or the people (through legislature) step in and put "the smack down". Have you noticed how Phillip Morris started airing all these "smoking is bad for you" ads - it is not because they are nice and want to help and educate, they are just "making the public aware" as to avoid paying another settlement, they know that those who are addicted and smoke will not look at the ad and say, "oh crap, so this is actually bad for me! I better quit right now!".
No, if you're talking guns and murders, it would be more like this conversation between a gun salesman and a customer:
Customer: "I'm looking for a gun, can you suggest one?"
Salesman: "Okay, well, what do you need to use it for?"
Customer: "My wife has been having an affair, and I need to off the bastard who's getting on her."
Salesman: "Oh, good, well, I have the perfect choice right over here..."
If not even the shareholders gets a vote in how the corporations is run. What is running them?
Cencorship constitutes a gray area in politics. Can you prove to me that their censorship violates human rights? If it's gone too far, can you show me how far is too far and prove to me that the lives of the people are worse because of this? I don't want theories or political arguments--I want data. We have cencorship in the United States, you know, but you don't see Cisco turning on our government, do you?
I object to Cisco Routers being used to route packets that contain child porn, racism, and jingoism... Perhaps Cisco should install software on all their routers so that Cisco engineers can examine every packet that they route and determine if it's for a moral purpose.... This would be like buying half-dozen shares in the Remington corporation and demand they stop selling guns to people who kill things with them... Cisco's business is firewalls and such...they have no control over what the purchasers of their equipment do with them...and if Cisco cuts off direct ties to China, then any one of their hundreds of resellers will sell the product to the Chinese.
-merlyn
While I have little or no love for Cisco (they're pretty much the Microsoft of the networking hardware world), I'm not sure how it can be "their fault" particularly if China buys the same Cisco kit the rest of us do and uses the same old standard features that Westerners routinely use for corporate firewalls etc, only to build their giant firewall.
What's Cisco supposed to do? Just blanket not sell to China Inc. (china essentially operates like a large corporation) just in case their kit is used for Evil(tm)? Many western corporations are as powerful as nations and quite Evil(tm) too - for consistency, shouldn't Cisco therefore also be compelled not to sell network hardware to Shell Oil or Halliburton, say?
Shareholders are the owners of the company. Within reason, they can collectively use this power to further any agenda they want, be it political, environmental or the usual financial. From Wikipedia: In the United States most cooperatives are corporations or limited liability companies. Co-ops can further the agenda of getting organic food out to the people who want it, providing low cost housing to members, or simply sharing access to automobiles to reduce environmental impact. I for one am glad that these shareholders aren't just passing the buck on this issue. Heck, I'm happy to see the investors taking responsibility on any issue like this. Although one can still suspect that there are alterior financial motives, but it could be as simply as good PR in an industry that considers access to information to be important enough to boycot, or at least choose a competitor's product, because of their involvement in China.
I'll never make that mistake again, reading the experts' opinions. - Feynman
An entry goes in the annual report supplement for proxy votes. The 62.27% of shares held by institutions and insiders goes along with the board to vote against it. Most of the folks getting the proxy statement don't bother to register a vote.
If as many as half register a proxy vote, and all of them vote in favor, that's a whopping 18.87% of shares in favor. Proposal fails...
The way I see it, Cisco has no responsibility for the "human rights" of China. They're not the government. If China comes to Cisco and says, we'll trade you these millions of dollars for your routers, they have an obligation to the shareholders to say OK. I mean, if they don't do it, then Juniper will do it. China is the one that is responsible for their misdeeds against their people, Cisco merely makes it slightly easier for them. That doesn't make them "liable" for it, though. They're just trying to make money. The shareholders are supposed to like money (isn't that why public corporations are all evil).
The solution, of course, is to not buy Cisco products if this bothers you, though. I (for other reasons, mainly their habit of suing security people trying to HELP them) won't buy them anyway, but this is (I guess) yet another reason to look elsewhere for routers.
My other car is first.
That sounds like a great idea.
Unfortunately, it seems that now some companies have succeeded in making lots of money, they are the ones telling the government how to behave.
Arguably, some power still lies with the people because they are the ones who buy the companies products... but then you remember we are talking about multinational companies with foreign customers. These foreign customers include other governments - meaning that you effectively have foreign governments (i.e. China) wielding power over the US government. Don't you just love capitalism!?
I've thought about your position, and it seems attractive, but then I remembered a counter-example.
This is exactly the same argument the military equipment and weapons manufacturers use as to why they should be able to sell their guns to anyone with the money, and be able to sell any weapons, such as landmines, to anyone.
Similar arguments are used by companies using what is near slave labour (and in some cases, actual slave labour through contractors) - if they can buy goods for the cheapest possible price, wouldn't they be remiss to the shareholders
to not take advantage of it?
We have a duty, through government, to prevent our national companies from doing significant harm as part of their business plan, and I think shareholders should also have the right, if not the duty, to put pressure on the company they own to also act in a more socially responsible way.
In the end of the day, the shareholders own the company. If a majority of them think not helping censor free speech in china is more important than making the most money possible, then all power to them.
Remember kids, it's all fun and games until someone commits wholesale galactic genocide.
You're mistaken on this point. Corporate directors are required to make decisions that best serve the interests of their shareholders. This is known as the shareholder primacy norm. There's a world of difference between serving the best interests of shareholders and making money at all costs.
If a majority of the shareholders express concerns over the possibility of aiding China with human rights violations then the directors of the company would not face any legal trouble if they turned down a contract with China over such concerns.
I wonder if you'd feel the same way if China made the same offer to Smith and Wesson, or Colt. How about Lockheed Martin or Raytheon? Dow Chemical?
Trying to make money isn't justfication for every action, even when companies need the money desperately to stay in business. If it were, hit men would incorporate and KILCO (pun intended) would be listed on the NYSE.
US shareholders would do best to get their own government's act cleaned up before getting all uppity over China...
> If China comes to Cisco and says, we'll trade you these millions of dollars for your routers, they have an obligation to the shareholders to say OK.
Unless, of course, the shareholders tell Cisco it ISN'T ok, which is EXACTLY what is happening. They are saying "Don't support censorship."
So what is wrong about that?
Add public trading to the mix, and the importance of customer service is diluted. Short term value extraction becomes the most important thing, and goals of course shift, as you note.
Of course, some functions need the capital that (almost always) only an IPO can provide, and many industries are the sorts in which a failure to IPO means you're doomed. Cisco is certainly in this category. But when buying Cisco (or Walmart), one should remember that you're implicitly funding their behaviour. What that means to you? I dunno. For me, I don't shop with either of them. Does this mean I pay more for soap? Probably. It also led to me learning how to make soap. I don't do it any more, but it was neat to learn. I also build network hardware for clients most of the time - they don't need Cisco gear, and I'm good enough at it now that it actually works out cheaper to use OpenBSD on decent hardware. For places where redundancy and optimization is important, we bid it out for the client (Cisco included), and Cisco almost never wins on cost benefit.
Lesson? Small, hungry companies provide better service and product, and the attitude of dealing with the devil you know just means you don't learn anything new. Oh, and that economics dictates everything, but that doesn't invalidate rational exploration of alternatives - heck, some people even call that 'innovation'.
I forget what 8 was for.
You can run a LAN/WAN without using proprietary software (which is what Cisco provides -- as integrated HW/SW systems).
The Chinese already make all the hardware they need -- they could build their own damn firewall with a bunch of MIPS/x86/ARM -- whatever -- and the various modems (fiber/ATM/DSL/wireless). Cisco could go "poof" tomorrow, and the Chinese would build their own repressive firewall out of "stock" components.
There are probable a variety of companies (e.g. Google or Yahoo! or IBM) that build their own networks -- because they can, know better, or just don't want Cisco around. Or universities that are too broke (and too savvy) to buy Cisco crap. I don't think Berkeley bought Cisco for a long time (they probably could not afford it).
When I consider this, it makes me think the Chinese really are to blame.
http://www.thebricktestament.com/the_law/when_to_
Exactly!
If you feel you're one of the good guys, you should always oppose bad guys. And think real hard about what opposing means to you.
Big corporations use all kinds of techniques to limit their badness in the eyes of the public. You know these techniques but may not be completely concious of it because of social influences.
One of these techniques is spin (half-lies). Another is spreading the guilt out over as many people as possible. For example, the nazi death camp machine was kept running by thousands of normal people who all did a little evil thing. HOWEVER, the end result was millions of people tortured and executed.
Do you really think that today there aren't any evil people in the world? Of course people who think like Hitler or Stalin exist today, some of them are even in the news. We are the good guys and everyone agrees (even the bad guys will) that evil and evil people need to be surpressed as much as possible.
YOU are not a good guy if you see evil and don't do anything about it. If you see someone breaking the law then that's something for the police, depending if you agree with that law you should call the cops. On the other hand, police can't be everywhere and not all evil is covered by law. There are evil things people can do without breaking the law. That's where the good guys come in.
A comment here, a small decision there will make a difference in the amount of evil in your society. The problem is that the culture is somehow against good guys in the: "nobody likes a smartass" kind of way. There are ways around that. You can give signals to evil doers in ways that do come across. One of them is mixing the message with something exciting or interesting, like humour or music. Another way is to send your message with conviction, if you really believe what you say and say it in a certain way, that will spill over in to your voice and body language. Show some balls in other words but don't be emotional about it, saying it as "matter of fact" works for me.
The reasons I'm saying this, well Cisco is saying, we're only doing this little thing and recently they've tried to supress the information about a security vulnerability in their router OS. Just so they could sit on it so they could spend the least amount of money. The great thing is, one guy showed balls and told everyone they were in danger. He got sued and the FBI were sicced on him (probably as an between-the-lines threat) but he knew that in advance and he still did the right thing. In his presentation he even said something like: "this will get me sued and fired but I want people to know about this". You should hire this guy because he proved he can be trusted.
Now I want YOU to do something to send a message to the evil in people's minds. Even though the people in Cisco individually might not be such bad guys, together they did end up doing the wrong thing in at least two instances. There are other ways of getting a good router for your network aren't there? Other brands, other kinds of solutions than a big router box, things like Eddie.
I'm not asking you to become an activist or something but let's admin this organization called "society" in the best possible way, us smart and aware people know the right way, all we have to do now is act on it. Do a little small thing here and there and bring it in the right way. I made this post and I'm stopping here so I don't get get overwhelmed but I DID do something as the submitter and slashdot editor did their things. Good luck doing your thing and enjoy it when you've done it.
- -- Truth addict for life.
But if you're selling your shares as a result of Cisco's human rights policies, who do you think is buying them? Right: someone who doesn't care about Cisco's human rights policies.
So if all the shareholders who care about this issue sold their Cisco stock, the end result afterwards is that none of the shareholders would care about the issue anymore. And since the corporation will claim to have a responsibility to its current shareholders, it will continue violating human rights as long as it's profitable to do so.
So by selling your Cisco stock, you're likely to make the problem worse. You have far more control (even if it's still miniscule) over Cisco as someone who actually owns Cisco stock than as someone who doesn't.
Use 'slashdot stuff' in the subject line in any email you send me if you want to get past the spam filter.
"According to this article at Wired, Boston Common Asset Management, has filed a shareholders resolution asking Cisco to 'adopt a comprehensive human rights policy for its dealings with the Chinese government, and with other states practicing political censorship of the internet.'"
Translation:
Free market demands company consider human rights; does so without interference or prodding from government.
Told you it could work.
Moderate drunk! It's more fun that way!
Do you feel the same way about IBM's collaboration with the Nazis, where their technology was used to track Jews and other undesirables for extermination or punishment? Or any of the other American businesses who collaborated with Nazis? What a company that sold medical equipment that was used for torture to Saddam? After all, it was just business. IBM just saw an opportunity to profit from fascism.
And isn't the desire for profit one of the major motivations of fascism? Business is not politically neutral. Businesses have effects on society, and should live within the laws and values of a society. Excusing such actions because it happens outside the US is like approving of human rights violations because they did not happen on US soil. How can a country ask another country to abide by its standards on human rights, if it is not willing to hold companies that operate from that country, to participate in said violations of human rights?
... and then they built the supercollider.
Maybe because they are decent human beings. I did not realize that becoming a shareholder meant that you had to stop caring about human rights, which are enshrined in the US Constitution, which is what allows the existence of businesses in the US in the first place.
Parsing your statement, if we know that the majority of Americans are actually shareholders, then you must be arguing that the majority of Americans should not care about human rights. Do you see something wrong with this picture?
... and then they built the supercollider.
regulating corporations.
Usually when you allow someone to make a huge mess and leave someone else to clean it up, you have a big problem on your hands.
We're giving billions in consumer dollars, intellectual property and factory construction and product development technology to one of the most undemocratic, misogynistic, anti-reproductive choice, pollution-happy, anti-workers rights nations on Earth.
China is in every way the enemy of America except in war. Their way of life is absolutely opposed to ours.
Would you have given such things to Nazi Germany even if they had not declared war on America? No. Well just about everything the Nazi's did to their people, the Chinese do and worse. All they haven't done is invade other nations. Whoops, I forgot, they invaded Tibet!
By trading with China we are shooting workers' rights, human rights, democracy and even environmental policy reform, in the foot.
Cisco's shareholders aren't going far enough; they should close down their factories in China. I'm tired of hearing all this kowtowing to the free market - China is proving that it can have free market "enterprise zones" without democracy and they have 20 of the world's most polluted cities. That Government is a black hole sucking the world into an endless downward spiral of decay in which absolute greed is trumping human rights.
We're doing way more harm than good to the world by allowing corporations in the US to do business with despotic nations like China who refuse to reform their ways.
As I said, the shareholders aren't going far enough with this.
--- Grow a pair, liberals... stop letting the Republicans bully you!