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Pearson rejects union-backed shareholder resolution

02 May 2016
A union-backed resolution calling for Pearson, the world’s largest education company, to change its business strategy and to stop relying so much on high-stakes testing in the United States was rejected on 29 April at the company’s Annual General Meeting.

The resolution demanded that Pearson “conduct a thorough business strategy review of Pearson PLC, including education commercialization and its support of high-stakes testing and low-fee private schools and to report to shareholders within six months.” It sought an end to what the coalition says is Pearson’s “over-reliance” on educational testing in the United States as well as to the company’s growing business of opening and operating private schools in the developing world.

The global education company, which has sustained some losses and bad press recently, announced this past January plans to lay off 10 percent of its workforce.

In a press release published on 29 April, Randi Weingarten, the president of the American Federation of Teachers, a PSI affiliate, said:

“When you raise questions that go right to the heart of a company’s business model, as we did with our shareholder resolution today, you expect to lose the first time. What was unexpected, though, was that 14 million shares voted with us, asking Pearson’s board to conduct a review of its business model. This model has led to a 40 percent loss of shareholder value, and we believe it is because of its fixation on high-stakes testing and promotion of education privatization.

“Ironically, Pearson told us repeatedly they were in ‘violent agreement’ with us on the overuse of testing and the need to educate the whole child, yet it refused to hold itself accountable. It actually printed on the ballot itself that shareholders should reject the resolution. So while Pearson won’t hold itself accountable, educators—who are held accountable for the job they do—will work with parents and other allies of children worldwide to hold Pearson accountable.”

Dave Prentis, General Secretary of PSI’s UK affiliate UNISON, said:

“The company is failing to respond to changes in the education market in the United States, where it makes 60 per cent of its profits. With the movement against compulsory testing growing in popularity across America, there’s an increasing likelihood that many cash-strapped states could look to reduce or even axe their testing budgets.

“Pearson has put too many of its eggs in the US testing basket and unions are right to be concerned that the company risks gambling away the current and future pensions of hardworking public sector employees. The company is shedding thousands of jobs in an attempt to turn the business around, but this flawed approach won’t address the deeper problems in its main US market."

The American Federation of Teachers and Unison (UK), were part of a coalition of supporters backing Shareholder Resolution 19, including the National Union of Teachers (UK), the National Education Association, the Association of Teachers and Lecturers (UK), the University and College Union (UK), the Irish National Teachers’ Organization, the South African Democratic Teachers Union, the Canadian Teachers’ Federation, the International Transport Workers’ Federation, the Danish Union of Early Childhood and Youth Educators (BUPL), Gewerkschaft Erziehung und Wissenschaft (GEW), and the New Zealand Educational Institute. Supporting global nongovernmental organizations were SupprAction Aid, Global Justice Now and the Right to Education Initiative.

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