Ellis: Let’s talk about your advocacy success with Nabors Industries (NBR), an energy services company. Pekin Singer has a history of advocacy with this company that resulted in Nabors Industries recently deciding to publish their first sustainability report.

Blume: We engaged with Nabors Industries for the first time in 2013 when we asked them to begin publishing a sustainability report. Our thinking was this company was a very good operator in terms of safety and environmental performance in a challenging industry. They are a leader and an innovator, but from our perspective their corporate governance needed improvement, especially with regards to environmental disclosures.

We asked them to write an annual sustainability report so they could be more transparent to their shareholders about what steps the company was taking to reduce risks, as well as write about how corporate governance is tied to those risk reduction efforts.

We started with conversations but there wasn’t any change in the company’s position. In 2014, we decided to file a shareholder resolution that asked the company to publish an annual sustainability report in compliance with Global Reporting Initiative guidelines. Over 40 percent of the shareholders voted in favor of the resolution. We felt that was a fantastic result since most resolutions in their first year get about 10 percent shareholder support.

Ellis: Nabors Industries is a company that Pekin Singer owned in its portfolios on behalf of some of its wealth management clients, is that correct?

Blume: Yes, we had owned shares in the company for some time prior to filing the first resolution.

Ellis: Filing shareholder resolutions is time and resource intensive for your team. Outside of supporting greater transparency from a company like Nabors Industries, what is Pekin Singer getting out of this process?

Blume: Our investors want to do more than just own quality companies; they also want to make a positive impact. The changes we are able to implement with these companies may also be recognized in the market place by adding to long-term shareholder value.

For example, there have been multiple studies published that talk about the financial performance of companies that file sustainability reports. What the data indicate is that the management of companies that take sustainability reports and internal ESG analysis seriously tend to be better aligned with their investors, and tend to manage their companies in more sustainable ways over the long term, thereby resulting in better financial performance.

Ellis: Back to your shareholder activity with Nabors Industries, Matt. What you’ve talked about so far is getting significant shareholder support on the first filing of the resolution.

Blume: Yes. In the subsequent year (2015), we filed the same resolution, asking for the same thing, and we worked harder to get the support of additional shareholders. This time, we got over 51 percent of the vote. The result was that the company suddenly sat up and really took notice. They became much more willing to speak with us. We started having productive conversations on what we wanted them to do and why. In December of 2015, Nabors Industries published their first comprehensive sustainability report.