Darden resolution

In the high visibility Darden Restaurants annual shareholders meeting in Orlando, Florida today — which saw activist investor shareholder Starboard Value gain the votes necessary for a complete takeover of the leading restaurant company's board of directors — Darden shareholder and international human rights organization the Unitarian Universalist Service Committee (UUSC) called for a board vote on its resolution to require greater transparency and accountability concerning Darden's political spending at local, state and federal levels.

Darden's board defeated the UUSC resolution, although more than 40 percent of shareholders nationwide voted to approve it.

Full text of the resolution

Resolved, that shareholders of Darden Restaurants, Inc. (“Company” or “Darden”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:

1. Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.

2. Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:

a. The identity of the recipient as well as the amount paid to each; and

b. The title(s) of the person(s) in the Company responsible for decision-making.

The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website.

Payments used for lobbying are not encompassed by this proposal.

Stockholder Supporting Statement

As long-term shareholders of Darden, we support transparency and accountability in corporate spending on political activities.         Disclosure is in the best interest of the company and its shareholders and critical for compliance with federal ethics laws.  The Supreme Court’s Citizens United decision said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.

We acknowledge that Darden posted a new political spending policy on its website last year, including its commitment to annually disclose “all direct and in-kind political spending to candidates, political parties, political organizations and independent expenditures in support of or in opposition to particular candidates for office at the federal, state and local levels.” 

Significant gaps remain, however, in the Company’s refusal to disclose payments to:

• Trade associations used for political purposes, and
• So-called “Social welfare” organizations under 501(c)(4) section of the Internal Revenue Code that engage in political activities.

Relying on publicly available data does not provide a complete picture of the Company’s political spending. The Company’s payments to trade associations and 501(c)(4) groups used for political activities, if any,  are undisclosed and unknown. In some cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending. This would bring our Company in line with a growing number of leading companies, including Microsoft, Costco, and Aflac that support political disclosure and accountability and present this information on their websites.

The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.