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Shareholder Activism With Home Depot—A Case Study
Finance for Congregations, Financial Investment for Congregations, Corporate Responsibility, Socially Responsible Investing

A major corporation changed its written policy statement prohibiting discrimination based on sexual orientation. This action resulted from efforts by the Unitarian Universalist Association (UUA) through its endowment fund investment in the stock of Home Depot in 2001.


Owners of stock have the right to ask the companies in which they invest to change their policies. This right is provided by Federal regulations promulgated by the Securities and Exchange Commission. The process includes several types of actions, including dialogs with corporate managers, publicity related to issues of concern, and filing of resolutions to be voted on at corporate annual meetings ("proxy resolutions").

The UUA is a member of the Interfaith Center on Corporate Responsibility ("ICCR"), a coalition of some 275 religious-related organizations. A number of investment firms who are active in the field of socially responsible investing are "partners" with ICCR. The efforts of ICCR and its members and partners have made significant, identifiable impacts on corporate policies and practices. ICCR has played a unique leadership role in shareholder advocacy in a range of areas, beginning with investments in South Africa. Currently, ICCR Issue Groups and members are challenging companies around issues of environmental accountability, human rights, negative impacts of globalization, American Indians and other indigenous people, diversity by race and gender on governing boards, and equality of opportunity, among others.

The UUA has participated in many of these challenges over the years.

Current Issue: Non-discrimination Based on Sexual Orientation

Only a few states require non-discrimination on the basis of sexual orientation, yet a number of major corporations have included such a prohibition in their written policies on equal opportunity in employment. Research by not-for-profit organizations, including Project Equality and the National Gay and Lesbian Task Force among others, has identified a number of other major corporations that have not. Thus, efforts are being taken to bring this matter to the attention of a number of such corporations.

Our UUA principles commit us to "affirm and promote the inherent worth and dignity of every person." Accordingly, the issue of equal employment opportunity has been a central concern of ours and, because we are a welcoming denomination to all people including gay, lesbian and transgender folks, we were eager to add our voice to these efforts.


The first step with Home Depot was a telephone call to a Vice President of Public Affairs with whom we had contact on a previous issue. After several discussions, they took the position that they were not discriminating against people based on sexual orientation and believed they did not need to change their written policy statement.

We then informed Home Depot we would be filing a proxy resolution on the subject. After several weeks, the Company informed us of their official opposition to our resolution saying, essentially, their current position does not tolerate discrimination on the basis of sexual orientation and that they pride themselves on maintaining an "inclusive environment." Further, they stated that the current written policy statement [which does not explicitly include sexual orientation as one of the prohibited discriminations] is all that is required by Federal laws. They provided us with the text of how their opposition would appear in the annual proxy statement, and that the Directors would formally recommend to all stockholders to vote "No" on our resolution.

Home Depot management had a change of heart, however, and called us in early May after the proxy statement had been mailed to all stockholders. They said they had further considered their position in light of the negative reaction from their employees who had learned that the Directors opposed the UUA resolution. They inquired about the terms and conditions under which the UUA would be willing to withdraw the resolution.


Following two intensive conference calls, they proposed that the Home Depot CEO Robert Nardelli promptly announce to all associates that the policy had been changed. They further proposed to substantially implement the new policy with a series of actions to make it clear that one of the core values of the company was, and continued to be, "respect for all people." We agreed and exchanged letters documenting the agreement.

A representative of the UUA, the Reverend Kurt Kuhwald, attended their annual meeting in Atlanta, and thanked them for their action in making the issue of non-discrimination based on sexual orientation an official part of their corporate policies.

Next Steps

Similar resolutions were co-filed by the UUA with two other companies in 2002—American International Group ("AIG") and ExxonMobil. AIG agreed to modify their policy before their proxy statement was mailed, but ExxonMobil fought the resolution at its annual meeting. Even so, stockholders with 13% of its shares voted for the resolution—a very credible showing on such matters. The level of this vote will permit a similar resolution to be submitted to Exxon next year.

As you can see, a combination of moral suasion and the threat of adverse publicity is sometimes successful, and sometimes not. We need tenacity and perseverance to continue to assert and promote the inherent worth and dignity of all people.

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