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

The Board's Response

[casings]

Board of Directors Statement and Recommendation AGAINST Stockholder Proposal

Yahoo! shares the proponent's commitment to human rights, and as described in more detail in the board's statement in opposition to proposal no. 6 in this proxy statement, the Company's management team has already instituted practices and initiatives that are designed to assess the implications of the Company's activities and policies and to protect and advance essential freedoms, such as freedom of expression and privacy rights.

To further advance thinking and practices around the promotion of free expression and privacy, Yahoo! is actively engaged in a formal dialogue, co-facilitated by Business for Social Responsibility and the Center for Democracy & Technology, that includes industry counterparts, various human rights groups, academic institutions and socially responsible investors. This diverse group aims to produce a set of global principles and operating procedures on freedom of expression and privacy to guide company behavior when faced with laws, regulations and policies that interfere with human rights. The group's goals also include creating an implementation, accountability and governance framework, as well as a forum for sharing ideas.

These practices and initiatives have been developed by Yahoo! management based on its thorough and careful consideration of the inherent complexities associated with operating under the laws of multiple foreign countries. The board of directors believes that Yahoo!'s management team, with its day-to-day involvement in the Company's business operations and its detailed understanding of the legislative and regulatory landscape of the countries in which the Company operates, is in the best position to assess these matters and to make informed judgments as to what practices and policies are most likely to promote the interests of the Company and its stockholders and users.

Re:The Board's Response

[glesga_kiss]

Board of Directors Statement and Recommendation AGAINST Stockholder Proposal

This is always the case at an AGM. I've never seen the board recommend FOR a stockholder proposal, nor have I ever seen one voted in. They are a waste of time regardless of the company.

Re:The Board's Response

[elrous0]

Yahoo! shares the proponent's commitment to human rights

...as long as it doesn't cost us any money.

Good ol' proposals.

[Mockylock]

China's proposal for anti-censorship against Google's said proposal is to propose a censorship proposal proposition. In response the proposal set by China, Google proposed to set a an anti-proposal toward Yahoo's proposal to create a proposal against the China anti-censorship proposal. These proposals were proposed as a proposition to anti-proposialism, not censorship.

Re:Good ol' proposals.

[Mockylock]

This post was rated as "overrated" when it wasn't even rated. So, does that mean the "overrated" rating was overrated? So, therefore it's not overrated?

Re:Good ol' proposals.

[TapeCutter]

Is there an echo in your basement?

Re:Good ol' proposals.

[jagdish]

Is there an echo in your basement? ..

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?

[mdm-adph]

Part of me wonders if there's a "breaking point" -- a point where Chinese officials will start loving money so much that they actually won't kick out a company that decides to take a stand against them.

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?

[Broken scope]

Because company image can have significant impact on company profits?

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.

Re:What if they don't comply?

[Mister Whirly]

"Would you stop using Google things (maps, gmail, etc) if Yahoo had those tools AND were anti-censorship?"

Hell no. I choose my email, maps, search engines, etc. based on functionality, not politics.

Re:What if they don't comply?

[Taevin]

While the AC was somewhat trollish, I'm inclined to call you one as well.

Can you please cite any policy from ANY company ANYWHERE that says "baby-fucking is ok since it increases shareholder value"?

Can you please cite where the AC claimed there was ANY company ANYWHERE that has such a policy?

When you take someone's point and extend it by "lets just go all the way and see" you've basically lost the arguement

Not at all, especially in this context. The AC was replying to someone who suggested that shareholders shouldn't care about anything but company value. He was pointing out that people are people first, money grubbers second. He used the extreme example of "baby fucking" to illustrate the fact that most people do hold some ideals higher than money and so they do indeed care about something other than company value.

Speaking of people being people first reminds me of that silly old document entitled Universal Declaration of Human Rights. It's full of all sorts of nice stuff like Article 19:

Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.

And Article 30:

Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.

I'm not implying that Yahoo is out to destroy human rights but the kind of censorship that they are engaging in with China clearly violates the spirit of our own Constitution as well as the Universal Declaration of Human Rights which all members of the United Nations (which includes the US and China; both permanent security council members) have agreed apply to all human beings.

In any case, the AC was simply pointing out that people can and do seek a higher moral purpose than acquisition of wealth. So there is indeed a "free speech option here:" Yahoo could simply not participate in censoring the Internet. It obviously would not be the best financial decision, but I doubt anyone who enjoys the liberties of living in a modern free society would question it's morality.

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.

Disproportionate effect

[Billosaur]

Let's face it, these rejections are driven by China. No, the government of China is not leaning on Google, Yahoo!, et. al., but is making it quite clear that the continued right to operate in China via Chinese web connections requires some... alterations. And because China is seen as such a lucrative market given its population size, non of these companies is willing to put itself in a position to be banned by the Chinese, ceding dominance of the market to its competitors.

I'll be most impressed if one of them decides to stand up and say "enough is enough". The fact is, the population of China is large, but they only comprise 1.3 billion of the 6+ billion people on the planet. A significant fraction, but not enough to justify turning their back on principle.

What markets can and cannot do

[Wubby]

Is it just me, or is this the clear limitation of "markets"? Markets are great for things like pushing down cost, creating diversity of products (through competition), and distributing wealth (if not manipulated).

But when it comes to profit vs. principle, it seems to hit a wall. Is this the reason markets can't stop human trafficing and a gov't has to step in. Any of you collije edumacated E-conomists want to correct me here?

Re:What markets can and cannot do

[danpsmith]

But when it comes to profit vs. principle, it seems to hit a wall. Is this the reason markets can't stop human trafficing and a gov't has to step in. Any of you collije edumacated E-conomists want to correct me here?

I'm not an economist, but this is why you can't have laissez faire capitalism to begin with. Letting the market take over human rights is precisely where the government should step in. To me if you are a multi-national corporation that operates and sells goods in the US, you should have to follow certain standards. Outsourcing should meet human rights standards, and any dealings in other companies should have to be held up to a standard. If given the choice between morality and money the corporation will always pick money as has been shown time and time again, the idea is that it's the government that has to force the corporation's hand in doing the "right thing."

Someone said it before and I'm probably misquoting them, but it comes down to I don't give a shit what the CEO of Ford thinks about emissions or his record on environmentalism, just like I don't give a shit what the CEO of Yahoo! thinks about human rights. I'm sure that some of these people are great people with great intentions, but regulation of the environment and human rights should be the government's job, because these things don't have pricetags, and the "free market" can't solve these problems. We shouldn't be expected to accept moral "handouts" from CEOs who decide that they will no longer do the wrong thing, we should be able to tell them to do the right thing, or quit doing business with us, without dollars and cents being the measurement.

Re:Ideals can't be silly.

[drhamad]

I would love to see Y!, Google, etc be able to operate in China/etc with no restrictions. That's the ideal. But that's not the real world. In the real world, there's laws. You rely on those laws in the US or EU to restrict the use of your private data, for example. In China, they have a law that restricts the use of other information. Do I like it? No. But I'd rather we have our companies there, which have a vested interest in as little information restriction as possible, then just have a Chinese state-owned company that does not have any interest releasing anything.