The Laborers’ International Union of North America (LIUNA) shareholder group’s proposal on succession planning at Whole Foods was blocked by the SEC. The SEC’s decision also encourages other corporations to ignore similar efforts.
The proposal by the Central Laborers’ Pension Fund would have required Whole Foods to adopt and disclose a written and detailed succession planning policy, according to a statement.
In its no action statement, the SEC stated that succession planning is routine company business and does not need to be disclosed. As a result, Whole Foods will take no action placing the shareholder proposal on proxy statements.
“By granting no-action on succession proposals, the SEC is standing on the sidelines and failing to fulfill its primary duty of protecting shareholders,” LIUNA General President Terence M. O’Sullivan said in reaction to the SEC’s decision. “America’s economic crisis, caused in part by corporate irresponsibility, calls for more regulation and oversight, not inaction.”
The SEC issued similar no action statements when LIUNA shareholder filed proposals in 2007 which would have required financial services corporations to examine their relationships with credit rating agencies. The idea was to insure that any sub-prime mortgage lending risk was disclosed.