The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sat, 18 Apr 2026 11:30:34 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png EESG Activism After ExxonMobil – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 EESG Activism After ExxonMobil https://corpgov.law.harvard.edu/2021/07/23/eesg-activism-after-exxonmobil/?utm_source=rss&utm_medium=rss&utm_campaign=eesg-activism-after-exxonmobil https://corpgov.law.harvard.edu/2021/07/23/eesg-activism-after-exxonmobil/#comments Fri, 23 Jul 2021 13:06:42 +0000 https://corpgov.law.harvard.edu/?p=139439?d=20210723090642EDT Posted by David A. Katz and Laura A. McIntosh, Wachtell, Lipton, Rosen & Katz, on Friday, July 23, 2021
Editor's Note:

David A. Katz is partner and Laura A. McIntosh is consulting attorney at Wachtell, Lipton, Rosen & Katz. This post is based on an article first published in the New York Law Journal. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance by Lucian A. Bebchuk and Roberto Tallarita (discussed on the Forum here); Companies Should Maximize Shareholder Welfare Not Market Value by Oliver Hart and Luigi Zingales (discussed on the Forum here); and Reconciling Fiduciary Duty and Social Conscience: The Law and Economics of ESG Investing by a Trustee by Max M. Schanzenbach and Robert H. Sitkoff (discussed on the Forum here).

The high-profile ExxonMobil shareholder vote in May sent shock waves through many of corporate America’s boardrooms. While there were various factors at play in the ExxonMobil scenario, the bottom line is this: A newly launched and virtually unknown hedge fund with a tiny stake in a massive global enterprise managed to leverage environmental and governance issues into winning three board seats at the annual meeting, displacing three incumbent directors, and is now in a position to influence the strategic direction of the company. Engine No. 1 LLC accomplished the unlikely feat of electing three nominees to ExxonMobil’s board by garnering broad support from an array of sources, notably profit-oriented activists and major institutional investors.

Overall, the 2021 proxy season saw a significant increase in shareholder support for EESG-related (i.e., relating to environmental, employee, social, and governance issues) proposals compared to 2020 and 2019. The ExxonMobil proxy contest is an example of the risks and dynamics at play in the current environment.

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