Rickke Mananzala
Javier Hernandez
Fiduciary duty is often framed narrowly: maximize returns within acceptable risk parameters. But for CIOs, understanding those risk parameters now requires a broader lens.
Data privacy, workforce stability and community trust are no longer peripheral concerns. They are central to long-term value. This means risk oversight cannot stop at asset allocation, manager selection or performance reporting. It must also include analysis of how portfolio companies are identifying, governing and mitigating risks that can affect long-term value and the communities in which they operate.
That is how our two foundations, The California Wellness Foundation and New York Foundation, came to co-file a shareholder proposal with The Home Depot focused on data privacy and the risks associated with third-party surveillance technologies. Filed alongside 17 other asset owners, the proposal is scheduled for a vote at the company’s May 21 annual meeting. It asks the company to provide greater transparency about how it oversees customer data collected through automatic license plate reader cameras operated by Flock Safety, one of its vendors. The proposal also raises concerns that this information could be accessed or used by third parties, local law enforcement or federal agencies beyond The Home Depot’s intended purposes or direct control.
Our proposal addresses a straightforward question: How is the company assessing and managing risks tied to the sharing of sensitive customer data, particularly through third-party systems? Without strong governance, these practices can introduce legal, operational and reputational risks to the company and to shareholders’ investments that extend well beyond compliance.
For long-term investors, these are not abstract issues. They shape workforce stability, customer behavior, regulatory exposure and brand trust. When communities feel surveilled or unsafe, foot traffic changes, labor dynamics shift and trust erodes. These are material risks that warrant investor attention.
When Mission and Markets Align
Both of our institutions are rooted in place. While our endowments are invested across global markets, our missions are grounded in the lived realities of our communities in California and New York. In recent years, we have each committed to aligning our endowments—not just our grantmaking—with those realities.
Increasingly, those realities are shaped by the intersection of technology, public policy and community trust. Recent reporting—from California to Minnesota to Maine—has highlighted how immigration enforcement activity can ripple through local economies. Retail locations, including large chains like The Home Depot, have become focal points of this tension, raising questions about how surveillance technologies may be accessed and used by law enforcement in ways that are not always transparent.
Against this backdrop, our grantees—such as the National Day Laborer Organizing Network and the New York Immigration Coalition—are asking what role, if any, The Home Depot plays in the collection and use of this data. At the same time, increased activity by U.S. Immigration and Customs Enforcement is disrupting economic opportunity in the communities we serve.
As investors, we want to ensure we are not working at cross-purposes with the communities our institutions exist to serve. Shareholder engagement offers a practical way to connect what our program teams are hearing on the ground with what our portfolios are exposed to in the market. It is one way to align investment oversight with mission while addressing emerging risk.
Why Institutional Investors Have a Fiduciary Duty to Engage
Through company dialogue, proxy voting, the filing of proposals, and more— shareholder engagement is one of the most underutilized tools available to institutional investors, particularly among endowments and foundations. It is also a core investment governance tool. At its best, engagement helps identify emerging risks early, improve disclosure and strengthen governance before issues escalate.
Divestment can be effective, particularly when companies are unresponsive or fundamentally misaligned with an institution’s values and risk priorities. Engagement offers a complementary approach by allowing investors to remain at the table, raise concerns, encourage stronger practices and support better long-term decisionmaking.
Actively engaging public companies is not ancillary to fiduciary duty; it is central to it. Asking companies to assess and mitigate risks that may affect long-term shareholder value is precisely what fiduciaries are expected to do. Engagement also enables collaboration across asset owners of different sizes, geographies and mandates. Foundations can work alongside large asset managers, pension funds and faith-based investors to address shared risks that would be difficult to address through capital allocation alone. In our experience with the Home Depot proposal, we were the only two foundations involved, underscoring how underutilized this tool remains among mission-driven investors.
Yet the track record is clear: Investor engagement has led to improved disclosure on climate risk, strengthened supply chain governance and advanced human rights practices across industries. In many cases, these changes have reduced uncertainty, strengthened resilience and supported long-term shareholder value.
A First Step, Not a Final Answer
We want to be clear: Filing a shareholder proposal is not an end point. It is the beginning of a conversation. We are asking for transparency, oversight and stronger risk management in an area that is evolving rapidly, with significant implications for companies and communities alike.
Many companies are navigating these issues in good faith, often without clear regulatory guidance. That is precisely why engagement matters: It creates space for dialogue and the development of stronger practices over time.
An Invitation to CIOs
For many asset owners—particularly endowments, foundations and family offices—shareholder engagement may be unfamiliar. That was true for us not long ago. But our recent experience affirmed three steps foundations can take immediately:
First, review how your proxies are being voted and whether those votes align with your institution’s mission, values and long-term risk priorities. This may mean working with your managers, outsourced CIOs, proxy voting service and/or investment committee to clarify your organization’s proxy voting guidelines and reporting.
Second, seek education and practical examples to build shareholder engagement capacity through organizations such as Interfaith Center on Corporate Responsibility, As You Sow and the Shareholder Engagement Project. To go deeper, AJL Foundation offers a clear, practical primer on how foundations can approach shareholder engagement.
Third, create a regular channel connecting investment teams and other institutional stakeholders involved in the mission so that issues emerging from community work can help identify shareholder engagement opportunities, including opportunities to file or co-file shareholder resolutions where appropriate.
For us, these steps made co-filing this proposal a natural next move and reinforced a broader point: Our endowments are integral to our missions. As stewards of that capital, we have both the opportunity and the responsibility to use all available levers for impact. In an era of rapid technological change and rising complexity, responsible stewardship requires attention not only to where we invest, but how we engage.
We hope more CIOs will see shareholder engagement as part of the core work of responsible investment stewardship.
Javier Hernandez is the director of investments at The California Wellness Foundation, where he works with fund managers and the investment committee to align the foundation’s investment strategy with its mission and long-term priorities.
Rickke Mananzala is the president of the New York Foundation, where shareholder engagement is part of the foundation’s broader strategy of 100% mission-aligned investing through its work with the foundation’s OCIO, investment committee and staff.
This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of Institutional Shareholder Services or its affiliates.
Tags: Activist Investors, proxy voting, shareholder engagement