In a post last month, I noted that, notwithstanding the growth in the number of shareholder proposals related to corporate social responsibility, for the 2019 proxy season (unlike 2018), we did not find any shareholder proposals that were submitted for shareholder votes directly addressing gun safety (although some did indirectly). I wondered out loud whether, in light of current events and the renewed national debate on gun safety—not to mention the gridlock leaving government incapable of doing anything—investors, customers, employees and other stakeholders might turn to companies to “do something.” Would they begin to apply more pressure to companies involved with firearms, including retailers and banks, to reexamine their relationships with the gun industry? It turns out that at least one of them has. Will others follow?
In this press release, SumOfUs, a consumer advocacy organization, announced that, working with shareholders of Visa, Inc., it had submitted a shareholder proposal to Visa calling on the company’s board to issue a report “on the risks to Visa from mounting public scrutiny of the role played by credit card issuers and payment networks in enabling purchases of firearms, ammunition, and accessories used to commit crimes, including mass shootings, and the steps Visa is taking to mitigate those risks.” The proposal’s supporting statement argues that Visa enables multiple gun purchases by mass shooters. Moreover, the statement maintains, Visa could play a significant preventative role in monitoring firearms sales and alerting authorities in the event of unusual transactions. Citing the NYT, the statement contends that “mass shooters often use credit cards, in some cases obtaining multiple new credit cards, to finance large, unusual purchases of weapons, ammunition and accessories in the days and weeks leading up to the shooting….The Times article asserted that payment networks are ‘uniquely positioned to see, if [they] chose to do so, a potential killer’s behavior in a way that retailers, law enforcement officials, concerned family members or mental health professionals cannot,’ pointing out that they have systems in place to quickly identify fraudulent transactions and crimes such as money laundering and financing terrorism.” The supporting statement also suggests that continued association with these types of purchases could negatively affect the company’s reputation, citing a number of banks and payment processors that have already taken action to disengage from the firearms sale process.
The CEO of Visa appears to reject a role for corporations in connection with issues of social policy (although, interestingly, he was a signatory to the new Business Roundtable statement on the purpose of a corporation—see this PubCo post). According to the NYT, the CEO of Visa has commented that “[w]e are in the business of facilitating legal commerce. That’s what we do. Our job is not to set or interpret, but to follow the law.” In an interview on CNBC, conducted in early August, the CEO described the mass shooting that had just taken place as “horrific,” but confirmed that the company would “continue to facilitate gun purchases as long as it is legal for people to buy firearms,” maintaining that the company is “‘guided by the federal laws in a country, and our job is to create and to facilitate fair and secure commerce….” Rather, he said, the responsibility to address the problem is in the lap of government: “it is the legislators who ‘need to do their job….The reality is that it’s very hard for us to do it. … If we start to get in the mode of being legislators it’s a very slippery slope….We shouldn’t be determining what’s right or wrong in terms of people’s purchases….[Legislators] ought to get busy on some common sense changes to deal with the horrific problems that we’ve seen in the United States, not just this weekend but for years and years….It’s time to start looking at mental health, the size of these magazines, the type of weapons. They’ve got to do something.’”