I don't know any of the trustees at Fidelity Investments, but I assume they are all decent people and that, as individuals, none of them is in favor of genocide or crimes against humanity.
Then why is it that collectively, the trustees have, again this year, taken a stand against a shareholder proposal that would have Fidelity avoid investing in companies that contribute substantially to genocide and crimes against humanity?
I suppose there could be any number of reasons…
– The "slippery slope" concern ("If we avoid investing in genocide today, what's next? Who knows where this will lead?")
– Group-think on the part of each trustee ("I personally wouldn't want to support crimes against humanity, but I don't want to make waves, so I will go along with the group.")
– Tradition ("We've never limited our investable universe for non-financial reasons before. Why start now?")
– Expense ("Research and new procedures cost money. This will hurt investors' returns, which will in turn hurt us.")
– Perception in the market ("Our shareholders and competitors will think that Fidelity has gone soft. We cannot allow that.")
I suppose that various combinations of the above reasons (excuses) came into play. One can only wonder whether any of these or other reasons were seriously examined.
I am reminded of this scene in the musical My Fair Lady:
Professor Higgins: You mean to say you'd sell your daughter for fifty pounds?
Colonel Pickering: Have you no morals man?
Alfred P. Doolittle: No, no, I can't afford 'em, gov'ner. Neither could you if you was as poor as me.
Unlike Mr. Doolittle, Fidelity isn't poor. So what exactly is their excuse?
For more information, click here.
R. Kevin O'Keefe
Chief Investment Officer
Posted: June 12, 2009