Shareholders Force Gun Company to Prepare Report on the Risks of Selling Guns
(Bloomberg) -- Sturm, Ruger & Co. will prepare a report on risks related to the company’s business, following a shareholder vote during the firearms manufacturer’s annual meeting on Wednesday afternoon. The vote does not require the company to change the products it manufactures.
“The proposal requires Ruger to prepare a report. That's it: a report,” said chief executive officer Christopher John Killoy. “The shareholders have spoken and we will follow through on our obligation to prepare that report in due course. What the proposal does not and cannot do is force us to change our business, which is lawful and constitutionally protected.”
The lead filer of the proposal was Colleen Scanlon of Catholic Health Initiatives, who was joined by a variety of other investors, many affiliated with religious groups. It was filed following the Parkland, Florida, mass shooting, which left 17 dead and sparked gun control protests nationwide.
In the wake of the attack, financial institutions reevaluated their relationships with the firearms industry. BlackRock Inc., the nation's largest asset manager, asked Sturm Ruger and American Outdoor Brands Corp. (formerly Smith & Wesson) to answer a series of questions about its firearms business, focusing on reputational risk. Sturm Ruger responded by saying the "lawful manufacture, distribution and sale" of guns doesn't pose any fiscal risks.
Shareholders were clearly not satisfied with the company’s reply. The proposal approved Wednesday specifically asks that by Feb. 8, 2019, Sturm Ruger issue a report "on the company’s activities related to gun safety measures and the mitigation of harm associated with gun products." The company has been asked to provide evidence that it monitors violent events linked to its firearms, show whether it has made efforts to manufacture safer firearms and analyze both the reputational and financial risks associated with the company as a result of gun violence in the U.S.
It is unknown which shareholders supported the initiative, as a breakdown of votes was not immediately available.
Some shareholders requested that Sturm Ruger meet with them privately to discuss gun violence. The company declined, saying it doesn't meet with individual shareholders as a matter of policy.
The company was also asked about advances in "smart gun" technologies, such as fingerprint sensors, which are intended to prevent firearms from being used by those other than their owners. Sturm Ruger did not comment on whether it is building such a product, though Killoy did note that "just because you can get your fingerprint recognition on an iPhone,” that doesn’t mean it will work on a gun.
At the conclusion of the meeting, much of which focused on the proposal and discussions of gun violence, Killoy reinforced Sturm Ruger's commitment to gun rights. "We are strong supporters of the Second Amendment, not because we make firearms but because we cherish the rights conferred by it," he said. "We understand the importance of those rights and as importantly, we recognize that allowing our constitutionally protected freedoms to be eroded for the sake of political expediency is a wrong approach for our company, for our industry, for our customers and for our country."
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