A few Target Corp. and Best Buy Co. institutional shareholders weighed in Thursday on the flap over the companies' political donations in Minnesota, urging the boards of both retailers to increase their oversight of campaign contributions.
Walden Asset Management and Trillium Asset Management Corp., both of Boston, and Bethesda, Md.-based Calvert Asset Management Co. filed shareholder resolutions with both companies. Together, the three firms control less than 1 percent of each company's outstanding shares - 1.1 million Target shares worth $57.5 million and 344,000 Best Buy shares worth $11.3 million - but they are moving the debate over the political giving to a new arena.
Target gave $150,000 and Best Buy $100,000 to a business-focused political fund helping a conservative Republican gubernatorial candidate in Minnesota, triggering a national backlash from gay rights groups and liberals. The companies made the donations after a recent U.S. Supreme Court ruling freed them to spend corporate funds on elections. The candidate, state legislator Tom Emmer, opposes gay marriage and other rights for same-sex couples.
"A good corporate political contribution policy should prevent the kind of debacle Target and Best Buy walked into," said Trillium vice president Shelley Alpern. "We expect companies to evaluate candidates based upon the range of their positions - not simply one area - and assess whether they are in alignment with their core values. But these companies' policies are clearly lacking that."
The shareholders said the donations don't mesh with corporate values that include workplace protections for gay employees and risk harming the companies' brands. Walden senior vice president Tim Smith said such giving can have "a major negative impact on company reputations and business."
The Target resolution urges the board to review the effect of future political contributions on the company's public image, sales and profitability and to consider the cost of backing a candidate whose politics conflict with the company's public stances.
Spokeswoman Amy Reilly said Minneapolis-based Target had nothing to add to previous statements on the matter, including an apology from Chief Executive Officer Gregg Steinhafel.
A spokeswoman for Richfield, Minn.-based Best Buy didn't immediately respond to a message.
The three investment companies together submitted the resolution to Target, while Calvert and Trillium filed the Best Buy shareholder proposal. One of Trillium's clients, the Portland, Ore.-based Equity Foundation, divested a small Target holding of 170 shares on Wednesday.
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