Shareholder actions against the tobacco industry
Who undertook action: Father Michael Crosby and coalition
Type: Religious organizations
Size: Small
Years: 1980-1991
Scope: International
Targeted companies: Philip Morris (PM) principally
Focus of action: PM's legitimacy / reputation
Concurrent events: World Health Organization (WHO) report on expanding third world cigarette market; growth of responsible investment movement; challenges to corporate management before Securities and Exchange Commission (SEC)
Industry behavior change sought: Put health warning labels on all packages of cigarettes sold worldwide
Smokers / smoking a focus? No
Main strategy: Shareholder resolutions at annual general meetings
Supporting strategies: Publicity
Well-funded? unknown
Breadth of campaign: Activists introduced resolutions; enlisted support of institutional investors; generated press
Evidence of effectiveness: Resolution got more support than any previous proposal not supported by management
Industry response: Opposed resolutions; then agreed to demand when it realized it could gain by doing so
Resolution: PM "voluntarily" adopted policy of labeling all product by end of 1992
Industry gains/losses: By agreeing to label, PM enhanced reputation as responsible corporate citizen and thwarted delegitimacy campaign; its action helped counter divestment movement by eliminating an argument for divestment, and enhanced relationships with institutional investors.
Community gains/losses: Advocates focused attention on PM's bad practices, but PM's "capitulation" gave it a public relations victory; labeling as implemented was largely ineffective.
Good for tobacco control? No, tobacco companies can give the appearance of accommodating public health demands while securing strategic advantages.
Observations: Negotiating with tobacco industry can enhance its legitimacy, facilitating its marketing ability with little benefit to public health.
