Associated Press | An animal-rights group known for sending out
scantily clad demonstrators to protest fur and other provocative stunts
has gained influence in boardrooms with a more traditional tactic:
buying company stock.

People for the Ethical Treatment of Animals has been buying shares for
seven years and now owns a piece of at least 80 companies, including
McDonald’s and Kraft Foods. It hopes to influence their animal welfare
policies on such things as how chickens are slaughtered or buying pork
from suppliers that keep pregnant sows in small crates. By buying stock,
PETA is guaranteed the right to present its ideas directly to officials
and other shareholders, many of whom would otherwise would likely pay
little attention to the group.

“It gives us a new forum in which to present the research we’ve done to company executives, their shareholders and the public,” said Ashley Byrne, a senior campaigner for PETA.

PETA tries to negotiate agreements with companies behind closed doors, but if that fails, the group submits shareholder resolutions with its proposed changes at shareholder meetings.

Companies don’t always change their policies, but Byrne said the effort has paid off. After PETA bought stock, Safeway grocery stores and restaurant companies Ruby Tuesday, Sonic and Burger King agreed to give purchasing preference to suppliers that abide by what the group says are more humane rules, such as not confining chicken and hogs in small cages, she said.

In many cases, shareholders were “horrified” when they learned of some of the production methods used by their companies’ suppliers, Byrne said.

“Many shareholders are average people who are compassionate and who don’t want to be supporting practices that are inhumane,” she said.

Meridith Hammond, a spokeswoman for Ruby Tuesday, said the company is “pleased to cooperate with PETA and are grateful for their advice, help with resources, and information about suppliers.”

Hammond said listening to shareholders’ ideas is a “normal and necessary part of doing business.”

Burger King said in a statement it is committed to “maintaining open-dialogue with PETA and various other animal welfare experts.”

Kraft Foods wouldn’t comment on PETA but said all shareholders are free to express their opinions to management and the board. Safeway didn’t respond to telephone messages.

Byrne said PETA’s attempt to work from within companies didn’t signal an end to its more visible, and often outrageous, protests aimed at improving the condition of animals and encouraging people to stop eating meat. Those events include PETA members stripping to protest the fur industry, nearly naked women taking showers on busy street corners to demonstrate the amount of water used to produce meat, and people squeezing into cages to focus attention on livestock confinement.

Hayagreeva Rao, a professor of organizational behavior at Stanford University’s Graduate School of Business, said PETA runs the risk of alienating some supporters by working with companies while also protesting their actions.

“If you’re extreme, you draw a certain set of supporters. If you become an investor, you’re moving to a more moderate position and that could change your identity and confuse initial supporters,” Rao said. “But you could gain new supporters.”

Byrne said she doubted PETA supporters would object, arguing they’re focused on getting results.

That’s how Barbara Hegedus, a PETA supporter from Parkesburg, Pa., saw it.

“I think if they’re able to influence in the boardroom rather than go through the demonstrations, it’s pretty good,” Hegedus said. “It’s a more progressive way of doing it.”

Michael Lent, chief investment officer for New York-based Veris Wealth Partners, said other shareholders have tried to influence corporate policies from within.

Some high-profile examples include the Rockefeller family, which in 2008 introduced shareholder resolutions pushing ExxonMobil on climate change issues. This month, the Interfaith Center on Corporate Responsibility introduced shareholder resolutions at a Goldman Sachs board meeting calling for an immediate shift in the way the embattled investment company conducts business on Wall Street.

Under rules established by the Securities and Exchange Commission, shareholders must own at least $2,000 in stock for at least a year before they can introduce a shareholder resolution.

Success often depends on whether a group can attract other shareholders with similar values, Lent said: “PETA alone may not be able to, but in concert with others may be able to accomplish something.”

Lent, whose firm works with foundations and endowments with an emphasis on sustainable and socially conscious investments, also said a shareholder resolution should be a last resort.

“Generally speaking, if you start out and engage them first, to start a dialogue and see how far you can get, that’s usually met with a better response than going right to a shareholder resolution,” he said.

That’s what PETA does, Byrne said.

“Very often, this takes away the need for a campaign because we’re able to resolve things behind the scenes,” she said. “It’s a very effective way to do things.”