This excerpt taken from the HAS DEF 14A filed Apr 16, 2007.
RESPONSE OF THE HASBRO, INC. BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL NO. 4 FOR THE FOLLOWING REASONS:
The Board of Directors and Hasbros management have carefully reviewed the current proposal in preparation for the 2007 Annual Meeting of Shareholders and believe that Hasbros current program already addresses the concerns expressed in the above proposal, as described in more detail below. In addition, adoption of the proposed action would impose additional costs and burdens upon the Company without corresponding benefits to shareholders or other constituents.
As a corporate steward in the areas of safety, health, the environment, and social responsibility at both the corporate and industry levels, Hasbro has a long and well-established commitment to sustainable development. In addition, Hasbro has long recognized the importance of dialoguing with key stakeholders on issues of sustainability and has programs in place to ensure the appropriate level of disclosure and transparency on these important issues.
With respect to sustainability, Hasbro has a long history of commitment to and progressive stewardship in the areas of (i) safety and health of its employees and business partners, (ii) the environmental impact of its operations, (iii) manufacturing ethics, not only in our own factories but also in the factories of our suppliers and business partners, and (iv) philanthropic investment in the local and international communities in which we operate. This commitment is held at the very top of the corporation by our Chief Executive Officer and is embraced Company-wide by management and our employees.
In each of the areas enumerated above, Hasbro has comprehensive and strategic programs in place to promote sustainable development and appropriate disclosure, as follows.
First, in the areas of safety, health and environment, Hasbro has a well-established global safety, health, and environmental management system in place, based upon applicable regulatory requirements and recognized best management practices. Hasbro regularly assesses and audits all of its operating locations to measure conformance to its progressive policies and standards, with the goal of continuous improvement. The efficacy of these programs is overseen by Hasbros Corporate Safety, Health and Environmental Steering Committee, comprised of members of Company management.
Hasbro is committed to producing products consistent with its environmental responsibility, with an underlying goal of seeking to conserve natural resources used in all areas of the Company. The Company seeks ways to reduce waste, promote recycling, and increase efficiency of energy and water use in all of its facilities, whether office, manufacturing or warehouse. The Companys goal is to take an active role in using both natural and recycled resources in an environmentally sound manner. For example, with respect to manufacturing sustainability, Hasbro sets specific short and long-term goals at its own manufacturing sites, including solid waste reduction goals, paper and chipboard recycling goals, plastic recycling and emissions reduction goals. Both of Hasbros manufacturing facilities are ISO 14001 certified, and Hasbros manufacturing facility in East Longmeadow, Massachusetts is an OSHA Voluntary Protection Program (VPP) Star site, the highest recognition for safety and health excellence. Hasbro is also a charter member of the EPAs Voluntary Climate Leader Program. As part of the program, Hasbro has pledged to reduce its total greenhouse gas emissions in U.S. operations by 30% from 2002 to 2007 a goal that has already been met.
Hasbro is similarly committed to promoting packaging sustainability, including, for example, reducing the use of twist ties, reducing the amount of adhesive taping on master cartons (used to ship our product), and reducing the actual size of master cartons. In addition, where feasible, Hasbro has specified single-wall master carton construction, instead of double-walled construction, resulting in a significant reduction of E-flute entering into the waste management system. Furthermore, Hasbro partners with customers, suppliers, local communities, government agencies, and industry groups to establish environmentally responsible goals. For example, with respect to polyvinyl chloride (PVC) and phthalates, the specific example raised in the shareholder proposal, Hasbro has carefully studied the issue, together with the toy industry, the U.S. Consumer Product Safety Commission (acting through its Chronic Hazard Advisory Panel (CHAP)), and the EU Commissions Chemicals Bureau Agency (the EU Commission). Based on its study of this issue, as well as that of the toy industry, CHAP, and the EU Commission, Hasbro firmly believes that toys and childcare articles made from PVC pose no health risk to children. Nevertheless, Hasbros toys and childcare items are compliant with all applicable laws and regulations, including the EU Phthalate Directive.
Information about Hasbros safety, health, and environmental program is made available to stakeholders via the Hasbro website, through written materials, and through opportunities for dialogue with members of Hasbros management team on these important initiatives.
In the area of manufacturing ethics, Hasbro is a well-recognized corporate and industry leader, both nationally and internationally. Hasbro was one of the first toy manufacturers to establish Global Business Ethics Principles (the Code of Conduct), which it did in 1993, to help prevent products manufactured by or for Hasbro from being produced under inhumane or exploitative conditions. The Hasbro program participation in which is mandatory for all suppliers and vendors worldwide who do business with Hasbro has evolved and was one of the foundations for the industry standard. Hasbros Code of Conduct sets forth workplace standards in the areas of child labor, working hours and compensation, forced, prison, or indentured labor, health and safety, abuse and discrimination, and freedom of association. Hasbro also reserves auditing and monitoring rights with respect to all manufacturing facilities producing Hasbro products. Since 1994, Hasbro and its monitors have conducted over 2,391 manufacturing facility inspections, including over 436 inspections in 2006.
In the last few years, as part of an effort to bring consistency to the oversight of working conditions and the industrys workplace initiatives, Hasbro has taken a leading role in promoting the toy industrys adoption of the International Council of Toy Industries (ICTI) comprehensive workplace standards, which include a comprehensive factory audit checklist, guidance for factories and third party monitors, and a corrective action process. Hasbro uses the ICTI program as a basis for monitoring factories and requires all of its direct vendors in China to obtain and maintain an ICTI seal of compliance on an annual basis. All of Hasbros direct vendors in China are required to adhere to the ICTI standards. The efficacy and progress of Hasbros manufacturing ethics program is overseen by the Companys Corporate Social Responsibility Committee, comprised of members of the Companys senior management team and chaired by its Chief Executive Officer.
Information about Hasbros manufacturing ethics program is made available to stakeholders on the Hasbro website and through written materials including Hasbros Annual Report. The ICTI checklist, guidance and corrective action documents, and a list of ICTI participant factories can be found at: http://www.icti-care.org. Finally, Hasbros management team is available to share information and engage in dialogue on these important issues with key stakeholders, including shareholders and non-governmental organizations.
Finally, in the area of philanthropy and charitable giving, Hasbro has a long tradition of supporting children in the communities in which it operates and other locations around the world. The Company is actively involved in making charitable grants through the Hasbro Childrens Fund, product donations through the Gift of Play and employee engagement through Team Hasbro. The mission of the Hasbro Childrens Fund, the Companys giving arm, is to assist children in triumphing over critical life obstacles as well as bringing the joy of play into their lives. Global, national and community partnerships have been formed to bring the gifts of hope, play and a helping hand to organizations in order to make a bigger impact. For example, in Zambia, we are working with World Vision to expand educational opportunities for AIDS orphans. In China, through Operation Smile, children will for the first time experience the ability to smile through missions supported by Hasbro. Through Americas Second Harvest, hungry children in rural areas of the United States, where food sources are scarce, are being given backpacks full of food on the weekends. The Companys Gift of Play program supports non-profit organizations like hospitals and
shelters, after school programs, summer camps for sick or needy children, and a generous holiday giving program. Our employees are actively engaged in the community volunteering through our Team Hasbro program, which allows them to volunteer during work hours. Information about Hasbros charitable giving can be found on the Companys website. Hasbros charitable giving team is also available to discuss its programs with interested stakeholders.
In conclusion, as demonstrated above, Hasbro values and recognizes that sustainable development is critical to its long-term success and has a well-established and robust program in this area. Hasbro also recognizes that transparency and dialogue about sustainability are important to investors and other stakeholders, and its current program of corporate disclosure and stakeholder dialogue is an efficient means of corporate reporting, without the expense of publishing a lengthy written report.
For the reasons outlined above, the Board of Directors has concluded that the Companys current sustainability and disclosure practices are in the best interests of the Company and its shareholders and thus is opposed to the shareholder proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL NO. 4.
This excerpt taken from the HAS DEF 14A filed Apr 17, 2006.
RESPONSE OF THE HASBRO, INC. BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL NO. 3 FOR THE FOLLOWING REASONS:
A substantially similar proposal was submitted to Hasbros shareholders for their consideration at each of the Companys last four annual meetings. The proposal was rejected by Hasbros shareholders at all four of these meetings. At the 2005 Annual Meeting the proposal was rejected by Hasbros shareholders with 123,142,123 shares voting against the proposal, and 14,058,714 shares voting in favor.
The Board of Directors and Hasbros management carefully reviewed the proposals submitted for consideration at the last four annual meetings and have similarly reviewed the current proposal in preparation for the 2006 Annual Meeting of Shareholders. The Board of Directors and management continue to believe that any changes to Hasbros current Code of Conduct and compliance procedures would neither help Hasbro fulfill its well-established and continuing commitment to humane global working conditions nor add value to the shareholders of the Company. Hasbros existing policies and practices, which are comprehensive and progressive, already address the concerns expressed in the above proposal and ensure compliance with business ethics principles, as described in more detail below.
In 1993 Hasbro established its Global Business Ethics Principles (Code of Conduct) to ensure that products manufactured by or for Hasbro are not produced under inhumane or exploitative conditions. Participation in the Hasbro program is mandatory for all suppliers and vendors worldwide who do business with Hasbro. Among many important areas, the Code of Conduct governs:
Hasbros Code of Conduct sets forth workplace standards with which all vendors manufacturing Hasbro products must comply. Hasbro also reserves auditing and monitoring rights with respect to all manufacturing facilities producing Hasbro products. To date, all factories located in the Far East which manufacture products for Hasbro have been audited by Hasbro inspectors and by outside firms hired by Hasbro. Hasbro engages two outside
auditing firms to audit manufacturers compliance with the Code of Conduct and local law. Since 1994, Hasbro and its monitors have conducted over 1,955 manufacturing facility inspections, including over 505 inspections in 2005. Over the years, Hasbro has successfully worked with its manufacturers to correct any unacceptable practices discovered during the course of these inspections. Although serious violations are rarely found, Hasbro has, after unsuccessful attempts to have the vendor remedy them, terminated vendors for failure to remedy violations. In addition, on a number of occasions Hasbro management has met with shareholders to discuss its Code of Conduct and compliance procedures, including findings of third party audits engaged by Hasbro.
In addition to corporate efforts, Hasbro has been and continues to be a leader in the toy industry (nationally and internationally) on the issue of workplace standards and compliance. Hasbro is a member of the Toy Industries of America (TIA) and Juvenile Products Manufacturers Association (JPMA) and sits on committees and forums worldwide to strengthen workplace standards and compliance. For example, Hasbro was at the forefront of developing industry-wide standards for fire prevention and emergency preparedness through the International Council of Toy Industries (ICTI). Additionally, Hasbro was a principal drafter of the factory audit checklists for the ICTI Code of Business Practices and took a leadership role in the 2001 revisions to the ICTI factory audit checklists and guidance manual. Hasbro, as a member of TIA and ICTI, is at the forefront of industry efforts to improve factory working conditions.
In the last few years, as part of an effort to bring consistency to the oversight of working conditions and the industrys workplace initiatives, Hasbro has taken a leading role in promoting the industrys adoption of ICTIs comprehensive workplace standards, which include a comprehensive factory audit checklist, guidance and corrective action documents. Hasbro is using the ICTI program as a basis for monitoring factories and is requiring all of its Far East manufacturing vendors to become ICTI-certified. Hasbro expects facilities manufacturing Hasbro products to apply for and achieve ICTI certification by an approved, independent auditing company. As of December 31, 2005, approximately 95% of the vendors Hasbro uses to produce products in the Far East have received ICTI certification. Hasbro currently expects that its remaining vendors in the Far East will be ICTI certified in the first half of 2006. In addition, however, Hasbro will retain the right to conduct its own audits. Hasbro is pleased with the continued growth and maturing of the ICTI/CARE program, including the appointment of the ICTI Governance Board, which provides greater transparency to industry efforts by combining leaders with industry experience with leaders from civil society The ICTI checklist, guidance and corrective action documents can be found at: http://www.toy-icti.org/info/code.htm.
To conclude, Hasbro is an industry leader in the area of global working conditions and is proud of its efforts both on behalf of the Company and the toy industry in general. Given Hasbros strong commitment to the Global Business Ethics Principles, its extensive outside monitoring program, and its industry activism, the Board of Directors believes that the Companys current program is best suited to ensure compliance and leadership on this important issue.
For the reasons outlined above, the Board has concluded that the Companys current Code of Conduct and compliance programs and procedures are in the best interests of the Company and its shareholders and thus is opposed to the shareholder proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL NO. 3.