Yahoo Rejects Anti-Censorship Proposal

Matthew Skala writes "The BBC reports that Yahoo! has rejected a shareholder proposal to adopt an anti-censorship policy, as well as one to set up a human rights committee to review the impact of Yahoo!'s operations in places like China. The interesting proposals are numbers 6 and 7 in the proxy statement available through EDGAR. This news comes on the heels of jailed Chinese reporter Shi Tao, suing Yahoo! for its involvement in his conviction, and Google's rejection of a similar proposal. The anti-censorship proposal was submitted by the same groups (several New York City pension funds) as the Google proposal. The proxy statement also includes the Board's recommendations — "strongly oppose[ing]" both proposals — with explanations of their reasoning."

Comments

What if they don't comply?

[4D6963]

Here's what I don't understand, if Yahoo! stops complying with local laws, as these shareholders suggest, wouldn't it be purely and simply out of business in China? Could any company violate the Chinese laws and keep working in China, thus providing Chinese citizens a breach in the Great Firewall?

Because that's where it doesn't make sense to me, but maybe my analyse is a bit over-simplistic, if Yahoo! tries not to apply censorship laws, then it won't be able to operate in China and thus it wouldn't be any good for either Yahoo! or Chinese web-surfers, right? Or did I get something wrong?

Re:What if they don't comply?

[$RANDOMLUSER]

Indeed, you got it exactly right. Yahoo's board further said that they think they have more leverage and actually promote free speech if they stay engaged, rather than taking their ball and going home.

Re:What if they don't comply?

[erroneus]

Because shareholders are human beings with thoughts, ideals and hopefully some conscience. The very idea that shareholders ONLY care about the end-result profitability of a company is and always has been a ridiculous assertion.

The proposal has been made and the board of directors have recommended voting against it proposal brought about by other shareholders. So it is the directors who are placing profit above human rights and not the shareholders at large. The very idea that the shareholders at large are responsible is ridiculous. The people responsible for the decisions made are far fewer and less obscure than you are trying to indicate.

Re:What if they don't comply?

[plover]

The proposal has been made and the board of directors have recommended voting against it proposal brought about by other shareholders. So it is the directors who are placing profit above human rights and not the shareholders at large. The very idea that the shareholders at large are responsible is ridiculous. The people responsible for the decisions made are far fewer and less obscure than you are trying to indicate.

It's not ridiculous at all. The directors have only recommended that the shareholders vote against the proposal. It's still up to the shareholders themselves to vote to make the final decision. The shareholders are ultimately responsible, not the board.

That said, boards of directors traditionally have a lot of sway in how the shareholders vote. Many companies are owned largely by various mutual funds and not by individual people, and the shares owned by the funds are voted for them by the fund manager. And fund managers almost always vote the way the board of directors recommend, meaning this might be the kiss of death for the proposal.

The shareholders do have another option, though. They can divest themselves from a stock they consider morally repugnant. This was done with modest success back in the 1980s to companies who did business with apartheid Africa; But mutual funds have grown much larger since then, and a sell-off by concerned individuals would probably have little effect on Yahoo!s stock price.

There are also mutual funds that pledge to invest in only socially responsible companies (can't think of their names right now, but they're pretty easy to find.) If they own any Yahoo! stock today, their fund managers would probably vote their shares for the proposal, and if it failed to pass they would probably divest themselves.

Communist over Capitalist

[superpulpsicle]

This is proof that communist power > capitalist power. Simply for the fact that US corporations always have to yield to money. The moment money can't fix a problem, they are stuck. Will google and yahoo be able to ever bribe the communist party enough? I doubt it. I feel bad for the Chinese citizens who are censored in the middle of all this.