DICK'S SPORTING GOODS, INC. | Improving accountability for shareholder value at DICK'S SPORTING GOODS, INC.

Status
0.63% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
DKS
Lead filer
National Center for Public Policy
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Pursuant to section 109 of the Delaware General Corporation Law and Article XIV of the bylaws of Dick's Sporting Goods, Inc., stockholders of Dick's hereby amend the bylaws to add the following Section 12:
The board of directors shall waive the protections of the business judgment rule in any stockholder action for breach of the duty of care or loyalty which adequately pleads that the defendants acted on political or ideological views, which shall presumptively include any conduct by the Company that boycotts a State of the United States. The board of directors may decline to exercise such waiver if the board expressly affirms the challenged conduct was based on a net-positive expected value calculation or was implemented directly or indirectly by a viewpoint diverse board.
Whereas clause
WHEREAS: Corporate decisions are subject to fiduciary duties.
Fiduciary duties include "acting to promote the value of the corporation for the benefit of its stockholders."1
Corporate decision-making based on an expected net-positive value calculation is consistent with these duties while decisions prioritizing political or ideological views are not.
The Delaware Supreme Court has recognized that in the context of defending against a takeover, the "omnipresent specter" of directors acting out of self-interest to protect their positions warrants subjecting their decisions to enhanced scrutiny rather than applying the deferential "business judgment rule" presumption of care, loyalty, and good faith - thereby shifting the burden of proof to the corporate decision-makers.2
In today's hyper-politicized business climate, there is a similar "specter of political bias" surrounding many corporate decisions.
Legislation introduced in the United States Senate would require publicly traded companies to adopt a bylaw committing to waiving the business judgment rule presumption in cases where a corporation engages in politically divisive conduct.3
Subjecting politicized decisions to enhanced scrutiny should benefit shareholders by (1) increasing the incentive for corporate decision-makers to only take such actions when it is demonstrably in the best interest of the corporation, and (2) signaling that Dick's is committed to respecting diverse viewpoints and not interfering with the political process.
Supporting statement
SUPPORTING STATEMENT: Politicized corporate decision-making has recently arguably cost corporations like Disney, Target, and Anheuser-Bush billions of dollars in market capitalization.4 Dick's has itself arguably been hurt financially in the past by prioritizing political views when Ed Stack, then chairman and chief executive, decided that Dick's should "take a stand" on gun violence by foregoing the sale of assault-style weapons, and said "I don't really care what the financial implication is."5 Implementing this proposal would commit Dick's to focusing on shareholder value. The bylaw can be analogized to the decision of many corporations to end the use of staggered boards, which protected incumbent directors but thwarted the market for corporate control.6

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.