Last autumn, the Boston-based investment firm Zevin Asset Management led a investor push at Starbucks to pressure the coffee chain into expanding its parental leave benefits for hourly store employees to match the more generous policy available to salaried corporate employees. In a shareholder resolution, Zevin requested that Starbucks’ leadership tell its investors whether this discrepancy might constitute employment discrimination.
In January, Starbucks announced that it was expanding its parental leave benefits, as well as adding paid sick leave, for hourly employees. While the changes do not equalize the offerings for salaried and hourly employees, they will make parental leave available to many store employees who were not able to take it before. Zevin considered that a victory, and they and other activist investors have since been pushing for similar changes at other large US employers, Rebecca Gale reports at Slate:
The Starbucks shareholder resolution on paid family leave was the first of its kind, and it has proven so effective that socially responsible investing firms such as Zevin are gearing up to put more shareholder resolutions in place for companies that have unequal paid leave policies, citing the need for what they call “better human capital management,” i.e. better meeting the needs of workers, which they think will yield better long-term results for the companies. And Zevin has the close-knit group of socially responsible investment firms in Boston that regularly meet to learn about issues and connect on ideas to make it happen.
Zevin filed a shareholder resolution against CVS in November citing its unequal paid family leave policies. In February, CVS introduced its first paid parental leave policy, giving full time employees, including those who work in stores, four weeks of paid parental leave. (Previously, only birth mothers had been eligible for time off under short-term disability.) Now, Zevin is in the process of withdrawing the shareholder resolution. And though Zevin was not a signer on the similar shareholder resolutions for Yum Brands or Walmart, it advised on the matters. (The shareholder resolution against Walmart was subsequently withdrawn after the company announced a new paid family leave plan in January.)
These initiatives reflect the growing interest among investors in HR policy and talent strategy, as these factors become ever more crucial to companies’ bottom-line performance. Investors, not only activists, are playing a more active role in shaping corporate strategy, particularly regarding human capital management. At CEB, now Gartner, our Investor Talent Monitor last year found that the percentage of organizations talking about talent on investor calls increased from 55 percent to 70 percent from 2010 to 2016, with culture and recruiting being the most popular talent topics. Shareholders are also asking more questions about other talent issues like employee engagement, rewards, and diversity and inclusion.
(For more insights from our Investor Talent Monitor, CEB Corporate Leadership Council members can read the full report here.)