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Governance and Procedure

Rationale for Revision of Current Corporate Social Responsibility Procedure

The Problem

  1. The interlocking cycles of ELCA (DCS Board and Church Council) and Board of Pensions meetings at which CSR resolutions must be individually reviewed and approved severely restricts the possibilities for resolutions to be filed due to timing constraints.

  2. The interlocking nature of the ELCA process results in our being unable to join with ecumenical partners as the wording for resolutions is shared and commented on in different constituencies, resulting in our being unable to participate in filing.

The Proposed Solution

  1. That the DCS Board review and recommend to the ELCA Church Council prioritized focus issues for the attention of the ELCA in Corporate Social Responsibility.

  2. That for each issue the ELCA Church Council, upon recommendation of the DCS Board, approve a policy framework document identifying and delimiting the scope within which resolutions can be filed.

  3. That individual resolutions be approved by DCS Executive Director for filing, within the approved policy framework, upon recommendation of the Advisory Committee for Corporate Social Responsibility.

  4. That regular reports be made to the DCS Board , ELCA Church Council and Board of Pensions Trustees regarding resolutions which have been filed.

The Background

Corporate Social Responsibility (CSR) has been a part of the work of the Evangelical Lutheran Church in America since its inception. This work includes the three-pronged approach of investment screening, community development and shareholder activism.

This work has been accomplished through ELCA partnerships with the ELCA Board of Pensions and other members of the ELCA shareholder network. The work is based on the ELCA Constitutional mandates and successive Church Council resolutions. These included:

Constitution and Bylaws

Section 14.21.13 – The Church Council, acting through the Division for Church in Society, shall have responsibility for the corporate social responsibility of this church and shall have the authority to file shareholder resolutions and cast proxy ballots thereon on stocks held by the churchwide units that are not separately incorporated. In addition, the Church Council may make recommendations to the churchwide units that are separately incorporated concerning the filing of shareholder resolutions and the casting of ballots on stocks held by those units.

Section 16.11.32 – Each board shall recommend policy and develop strategies in its particular areas of responsibility after consultation with other units of the churchwide organization and affected synods, congregations, agencies, and institutions.

  1. Policies related to the day-to-day functioning of the unit or to the specific responsibilities of the unit that have no implications for other units, congregations, synods, agencies, or institutions may be adopted by the board, subject to ratification by the Church Council.

  2. All other policies shall be submitted to the Church Council for approval.

Section 16.11.E97j – Division for Church in Society
This division shall assist this church to discern, understand, and respond to the needs of human beings, communities, society, and the whole creation through direct human services and through addressing systems, structures, and policies of society, seeking to promote justice, peace, and the care of the earth. To fulfill these responsibilities, this division shall:

  1. give expression to this church’s concern for corporate social responsibility, both in its internal affairs and its interaction in the broader society. To do so, this division will:
  1. exercise, at the direction of the Church Council, the rights of this church as a corporate shareholder on issues of social concern on stocks held by the churchwide units that are not separately incorporated. In addition, the Church Council may make recommendations to the churchwide units that are separately incorporated concerning the filing of shareholder resolutions and the casting of proxy ballots on stocks held by those units.

  2. facilitate the formation of an Advisory Committee on the Church’s Corporate Social Responsibility that will include representatives from the Board of Pensions, the Church Council, and other units of this church and that will give counsel and advise to all appropriate units of this church on corporate social responsibility.

  3. work with national ecumenical groups on issues of corporate responsibility.

 

Church Council Executive Committee Minutes

EC88.2.3 – That the Advisory Committee on the Church’s Corporate Social Responsibility report regularly to the Church Council the committee’s recommendations for proxy voting on shareholder resolutions; and

That initiation of any shareholder resolution by the Evangelical Lutheran Church in America must have the specific endorsement of the ELCA Church Council prior to the filing of such an action. (February 1988)

EC88.2.4 – That criteria to be developed by the Advisory Committee on the Church’s Corporate Responsibility for the Social Purpose and other funds of the Board of Pensions be reviewed by the Church Council prior to recommendation of such criteria to the ELCA Board of Pensions. (February 1988)

Rationale for Change

For some years DCS and the Board of Pensions have been challenged by process problems which severely constrain our effectiveness in implementing our church’s social policy with regard to Corporate Social Responsibility. The constraints are a result of an interlinked process of decision-making between the Board of DCS, the ELCA Church Council and Executive Committee, and the Board of Pensions Committee on Social Corporate Responsibility which does not allow for the flexibility of response that is needed.

The effect of these constraints has been to severely limit our ability to file resolutions and also to participate ecumenically in filing resolutions.

In response to this problem DCS has investigated how other churches approach this problem, and has consulted at length with the Advisory Committee for Corporate Social Responsibility. This proposal for revision has also been shared with the Committee for Corporate Social Responsibility of the Board of Pensions for response and has their strong support.

The proposal seeks to place with the ELCA Church Council the responsibility to identify and prioritize issues to be taken up in the Corporate Social Responsibility work of this church. It protects the responsibility of the council to describe and delimit the policy framework within which these issues would be pursued. It gives to DCS the responsibility, upon recommendation of the Advisory Committee on Corporate Social Responsibility, to determine the focus and wording of individual resolutions within the scope of the framework, and to approve them for filing. It ensures that the church council will see all resolutions that have been filed through regular reporting. The implications for the Board of Pensions are that the board will be informed of the broader policy framework of the ELCA within which each resolution is to be filed, and that the ELCA will be able to be more nimble in responding to filing opportunities and timelines. The Board of Pensions resolutions approval process and filing procedures will not be affected.

Step by Step Through the New Process

  1. The DCS Board reviews and recommends to the ELCA Church Council for approval issue papers regarding particular priority concerns which require shareholder action by CSR. These issue papers will be standard in format and include the following:

    a. Overview of the problem/issue in society;
    b. Review of ELCA social policy surrounding the issue;
    c. Proposals outlining how corporations might play a role in the solution to the issue (including a sample list of specific companies or sectors of industry which might be approached around the issue;
    d. Identification of any screens the ELCA would implement and:
    e. The boundaries of resolved clauses that the ELCA would endorse.

  2. At any time after approval of an issue paper, the ELCA Advisory Committee for Corporate Social Responsibility recommends to the Executive Director of the Division of Church in Society specific resolution wording to file with companies.

  3. The DCS Executive Director approves all resolutions to be filed, within the framework approved by the Church Council and upon recommendation of the Advisory Committee on Corporate Social Responsibility.

  4. Approved resolutions are shared with the Board of Pensions for endorsement and implementation within their fiduciary responsibility.

  5. Regular reports including all resolutions that have been approved and/or filed, as well as information regarding ongoing dialogues will be shared with the DCS Board, the ELCA Church Council and the Board of Pensions.  Document © 2004 Evangelical Lutheran Church in America

 

 
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