Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of WRAL.com.
RESEARCH TRIANGLE PARK, N.C. – Cisco brands itself as “The Human Network,” but some people have a different view.
The networking giant is getting a big publicity black eye from an asset management group that is dumping its 167,000 Cisco shares in a fiery dispute about human rights.
Boston Common Asset Management LLC issued a stinging rebuke of Cisco (Nasdaq: CSCO) following failed attempts to convince Cisco management to take a stronger stand for people rather than profits in dealing with China and other companies.
“As technology becomes more prevalent in the world, we expect human rights related
concerns will become more, not less prominent,” said Nevin Dulabaum, president of Church of the Brethren Benefit Trust, in the announcement from Boston Common. He also said he is a long-time shareholder of Cisco Systems and acknowledged himself as an “active participant in the investor-driven human rights campaign.”
“For all its talk about the ‘human network’ and adherence to the United Nations Universal Declaration of Human Rights, Cisco has not demonstrated in any concrete way that it fully recognizes its potential impact on human rights around the world,” he added.
Cisco shares closed at $21.08 Thursday.
“Boston Common’s decision to divest comes after years of campaigning Cisco for greater
transparency and accountability on key human rights and business development concerns,” added Dawn Wolfe, the associate director of environmental, social, and governance research at Boston Common Asset Management.
“Freedom of expression, privacy, and personal security are all critical elements in maximizing network traffic. Politically and socially repressive policies related to speech and privacy has a chilling effect on users and violates universally recognized human rights. When pressed for details on how Cisco addresses these risks, they come up short.”
The company employs more than 4,000 people at its campus in RTP and is highly regarded for its philanthropic efforts. It issued a statement defending its record.
“We continually evaluate and address human rights issues within our business operations and in communities where we operate,” a Cisco spokeswoman said in a statement provided to Reuters.
“We have various policies, practices and procedures in place relating to human rights around the word, and believe our business practices and our standards-based technology architecture support the benefits of Internet access to information on a global basis.”
The dump Cisco shares move came after a failure at Cisco’s recent annual meeting by the human rights activists to convince the company to toughen its rights stance.
“The voice of shareholders fall on deaf ears at Cisco,” Wolfe said in his announcement. “About a third of Cisco Systems shareholders voting their proxies have supported our proposal over the years, voting in favor of greater disclosure on issues of censorship and privacy. Cisco’s deceptive tallying practices in 2010 do not change that. The investor coalition will march ahead, and perhaps one day Cisco will wake-up and realize how dedicated these shareholders are to the company’s success. Until then, significant questions remain about its ability to manage risks it is reticent to recognize.”
On its website, Boston Common Asset Management describes itself as “an investment manager specializing in sustainable and responsible equity and balanced strategies. We pursue long-term capital appreciation by seeking to invest in diversified portfolios of high quality, socially responsible stocks. Through rigorous analysis of financial, environmental, social, and governance (ESG) factors we identify attractively valued companies for investment. As shareholders, we urge portfolio companies to improve transparency, accountability, and attention to ESG issues. Our focus is global; we manage U.S. and international portfolios, customized to the needs of institutional and individual investors. We are independent, employee-owned, and field a seasoned, close-knit team of professionals.”
Reuters noted that the firm has some $1.4 billion under management and has “long campaigned to get Cisco to monitor more closely” the risks created by sales to China and other companies.
Google’s battle last year against China was an example of a U.S.-based firm battling with that country’s government over censorship. Cisco is far from alone in being criticized for its dealings with China.
But this stock selloff is far different than signs and banners at a protest outside a company’s gate.
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