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Why Trinity Church and Wal-Mart Went to Federal Court

UPDATE: The Wall Street Journal featured Trinity Wall Street in its Law Journal section on Sunday, March 22, 2015. Click to learn more. 
By the Rev. Dr. James H. Cooper
You may have heard in the news that a Federal court judge has ruled that a shareholder proposal submitted by Trinity in 2014 would be allowed into Wal-Mart shareholder materials for 2015. But why did Trinity take Wal-Mart to court? Why is a church engaged in shareholder activism? This is an appropriate time to provide some background and offer some information on Trinity’s role in what we see as an important matter for church communities to consider.
In recent years, The Episcopal Church has reflected on the profusion of mass murders and gun violence in American society. As an Episcopal parish, Trinity is seeking to have an impact in addressing this devastating issue by engaging businesses and fellow investors in dialogue on the serious moral, ethical, and business implications of selling guns equipped with high capacity magazines. We do so recognizing that Trinity’s considerable resources give the parish both a responsibility and an opportunity to engage constructively with businesses where there are opportunities to enhance returns for shareholders and increase the safety and well-being of society. 
In 2014, Trinity sought to introduce a proposal for inclusion in Wal-Mart’s proxy, to be voted on by the company’s shareholders at its Annual Meeting. The proposal asked that Wal-Mart’s Board of Directors oversee the development of policies to guide management’s decision whether or not Wal-Mart should sell products that are 1) especially dangerous to the public, 2) pose a substantial risk to company reputation and 3) would reasonably be considered offensive to the community and family values that Wal-Mart seeks to associate with its brand. For instance, the decision to sell guns equipped with high capacity magazines seems inconsistent to Trinity (and we presume like-minded shareholders), given other merchandising decisions that Wal-Mart has made to protect its reputation and the public. 
To be clear: ours was not an “anti-gun” proposal, nor a proposal to end the sale of certain products. We simply asked that shareholders be allowed to consider whether the Board has an obligation to assure that the company’s standards and values are uniformly considered and applied when the sale of certain products can have momentous consequences.
The Securities and Exchange Commission issued a no-action letter on the matter and the Federal District Court ultimately ruled that Wal-Mart could exclude our proposal from the 2014 proxy statement. Trinity then appealed that decision; our appeal was ruled on favorably on Wednesday, November 26, 2014, the day before Thanksgiving.  I was very pleased with the decision. On critical issues such as the sale of products that may threaten the safety or well-being of communities, corporate boards must exercise their oversight role to assure balance among customer, shareholder, and societal interests. 
We intend to campaign vigorously for the adoption of our proposal, and we feel it is important to raise the issue of board responsibility and accountability for good corporate citizenship. Trinity is a community of committed Christians who are focused on putting an end to gun violence. The campaign for board governance related to the sale of such products as high-capacity magazines has taken place in courtrooms and in confidential conversations with executives. Yet as I write this, Trinity's congregation is also galvanized to advocate against gun violence across the neighborhoods of New York City at the grassroots level. Now and in the future, Trinity’s pastoral mission will maintain its focus on issues that the parish believes are critical to the welfare of communities and society, under the broad umbrella of justice and fairness that our faith represents.
The Rev. Dr. James H. Cooper is the 17th Rector of Trinity Wall Street
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