Proxy adviser ISS backs call for gun safety report at Sturm Ruger
BOSTON (Reuters) – Proxy adviser Institutional Shareholder Services on Wednesday recommended investors vote to support a shareholder proposal calling for gunmaker Sturm Ruger & Co to report on gun safety, which could put new attention on so-called “smart gun” technology.
In a note to clients, ISS also backed the election of all director nominees at Sturm Ruger ahead of its shareholder meeting scheduled for May 9.
The board of Connecticut company Sturm Ruger had recommended investors vote against the call for the safety report. Its proxy statement said that “the intentional criminal misuse of firearms is beyond our control. Similarly, the constitutional right of firearms ownership carries with it certain responsibilities and the Company has long advocated the safe and responsible ownership and use of firearms.”
Sturm Ruger representatives did not immediately respond to a request for further comment.
Second-ranked proxy adviser Glass Lewis made the same recommendations to Sturm Ruger investors on April 14, citing gun violence as a risk to the company’s reputation.
Just what additional steps if any weapons makers should take on safety has drawn renewed interest in the wake of a shooting at a Florida high school in February in which 17 people were killed.
Banks including Citigroup Inc and Bank of America Corp lately have restricted lending to clients involved with firearms. Also, asset managers including BlackRock Inc and Vanguard Group have said they would raise safety concerns with gunmakers whose stocks they own.
BlackRock and Vanguard are the top two investors in Sturm Ruger, together with about 25 percent of shares.
Representatives for both firms declined to discuss how they might vote at Sturm Ruger.
The shareholder proposal was filed by the Sisters of the Holy Names of Jesus and Mary in Oregon. It asks the company report on gun safety such as how it monitors violence, research on safer guns, and its assessment of risks to its reputation.
The proposal mentions smart guns, designs with electronic limits on their ability to fire, which it says could help reduce accidental shootings and suicides.
Smart guns have faced opposition from gun rights groups concerned about their practicality and legislative implications.
ISS wrote the technology could make guns safer, and that a market for smart guns could help overcome engineering problems. ISS noted the proposal does not call for the production of smart guns, but only seeks evidence that Sturm Ruger’s board is properly assessing risks.
Reporting by Ross Kerber in Boston; editing by Grant McCool