When my friends and acquaintances learn I own shares of Wal-Mart (NYSE: WMT), the reactions are always the same: Shock. Disbelief. Disappointment. They can't understand why I'm supporting one of the giant corporations that they believe plagues society. But they don't realize one important factor: When I own shares of controversial companies, I can vote to change their behavior.

Think Wal-Mart should treat its employees better? As a shareholder, you can submit a proposal for voting. In the last proxy statement I received from the company, I voted to add gender identity to Wal-Mart's non-discrimination policy. (The company recommended that shareholders vote against this -- most companies seem to oppose the majority of shareholder proposals.) I also got to support a resolution to give shareholders an advisory vote on executive compensation ("say on pay," as the media calls it).

As a shareholder of other companies, I cast plenty of votes in accordance with my values:

  • I supported a proposal that would make McDonald's (NYSE: MCD) require its chicken suppliers to kill their birds more humanely.
  • I voted in favor of reining in Chesapeake Energy's (NYSE: CHK) lavish and oft-criticized executive compensation practices.
  • I voted for a proposal urging General Electric (NYSE: GE) to examine and improve the pay disparity between its highest and lowest earners.
  • After Coca-Cola (NYSE: KO) came under fire for alleged human rights violations at some of its bottlers and suppliers, I supported a proposal asking the company to strengthen its commitment to human rights.

Even modest votes can make a difference. Proposals that don't win a majority of votes will nonetheless send a message to management. And if the proposal is repeated, it may draw more votes in the future. Better still, whereas companies were traditionally permitted to count all ballots not cast as votes in management's favor, that system is now growing more accurate.

In some cases, shareholder agitation has prompted that change. Among other companies, Time Warner (NYSE: TWX) has been urged via a shareholder proposal to implement simple majority votes, thus adding to shareholders' power. (Some companies require supermajority votes of greater than 51%.) That's just one more proposal I got to support.

Buying influence
I'm not alone in voting my conscience. The Humane Society of the U.S. recently bought stock in Krispy Kreme Donuts so that it could more strongly urge the company to buy only cage-free eggs. It's far from unprecedented for companies to bow to shareholders' wishes -- sometimes even if shareholders don't win a majority of votes on an issue. Procter & Gamble (NYSE: PG), for example, added fair-trade coffee to its offerings a few years ago, under pressure from activists.

According to Moxy Vote, individual investors hold some 30% of shares in public companies, on average. That's enough to make a big difference, especially when mutual funds and pension funds also flex their muscle, as they occasionally do.

Sometimes, investing in companies that make you uncomfortable or unhappy lets you work from within to influence them for the better.