After reading the case study below, answer the questions following the case in your initial post. Respond to at least two posts.
US John D. Rockefeller founded the Standard Oil Corporation, which became Exxon Mobil, the world’s largest publicly owned energy company. At the 2008 AGM, some of his descendants brought shareholder motions calling for the company to curb greenhouse gas emissions, to increase renewable energy research, and to develop sources of alternative fuel.
Three resolutions asked Exxon to study the impact of global warming on poor countries, to reduce company emissions of greenhouse gases, and to do more research on renewable energy sources such as wind turbines and solar panels. Neva Rockefeller Goodwin, an economist and great-granddaughter of Rockefeller, told shareholders:
These increased concentrations of CO2 in the atmosphere will cause weather disasters that will work against everyone’s best hope for robust development in emerging countries, while also increasing the vulnerability of the poor in the rich countries. It will also impact the global economy. The proposals were opposed by Exxon Mobil’s board.
The family also supported resolutions calling for the company to establish an independent chairman, separating the role from that of the current chairman and chief executive Rex Tillerson. Shell and BP, they noted, had already separated the positions. The motion to split the roles, which had been raised for the last seven years of shareholder meetings, was supported by a significant number of shareholders. But the final poll showed only 39.5% of the shares were voted in favour. Commentators suggested that the US $40 billion profit reported by the company in 2007 may have influenced the rest. ‘The past year was an outstanding year and a record for our corporation by nearly every measure,’ Tillerson said. ‘Millions of people have benefited financially by holding Exxon Mobil shares either directly or indirectly through their pension, insurance, and mutual funds,’ he added.
Mr.Tillerson added that he thought Exxon had to keep focused on its mission of developing more oil and gas reserves, and that oil and gas would remain the primary fuel source for decades to come. Some shareholders disagreed, arguing that the company’s emphasis on developing oil and gas as energy sources threatened the global environment and ultimately the company’s financial health.
One shareholder suggested that the company was ‘acting like a dinosaur by not adapting to a changing environment’. Another shareholder, a Dominican nun, said: ‘We’re faced with a profound moral and business challenge.’ These shareholders were countered by otherswho defended the management, saying it had been ‘a great engine for profit’.
Discussion questions:
- Should the company keep its focus on its mission of ‘developing more oil and gas reserves’?
- How would you make a case for the company to curb greenhouse gas emissions, increase renewable energy research, and develop sources of alternative fuel?
