This article advances the idea that shareholders who seek to influence corporate behaviour can be understood analytically as norm entrepreneurs. These are actors who seek to persuade others to adopt a new standard of appropriateness. The article thus goes beyond studies which focus on the influence of shareholder activism on single instances of corporate conduct, as it recognises shareholders' potential as change agents for more widely shared norms about corporate responsibilities. The article includes the empirical example of US internet technology (...) companies who, in their Chinese operations, face conflicts of norm systems in regard to freedom of expression on the internet. Shareholders have been active in seeking to persuade these companies to adopt a norm of adhering to global standards for human rights over restrictions implied by authoritarian regimes to which they deliver services. (shrink)

The role and evaluation of the modern corporation is being challenged by multiple stakeholders, changing markets and public expectations. Unfortunately, corporate governance, regulation and accounting have played a prominent role in business failure for the past decade resulting in a growing lack of public confidence in our markets. We present a new model that contributes to improving the quality of corporate information by providing not more, but better information through increased intelligibility of overall information, benefiting both the firm and its (...) broad array of stakeholders. It has become apparent that boards, management and regulators have been unable to cope with the rise of business failures by adding increasing layers of regulation that have often served only to exacerbate the complexity and further cloud the transparency of needed information. We have identified a growing number of forward‐thinking firms that have found alternative means to provide betterinformation and strengthen their companies. We offer a stakeholder‐centric model for improving information intelligibility based upon the extensive scope and variety of external input derived from the growing social movement organizations. With the added focus on intelligibility, these groups can help foster greater corporate responsibility, meaningful transparency, increased stakeholder benefits, and improved overall performance of the firm. (shrink)

We investigate the role of personal values in an investment decision in a controlled experimental setting. Participants were asked to choose an investment in a bond issued by a tobacco company or a bond issued by a non-tobacco company that offered an equal or sometimes lower yield. We then surveyed the participants regarding their feelings toward tobacco use to determine whether these values influenced their investment decision. Using factor analysis, we identified investment- and tobacco-related dimensions on which participants’ responses tended (...) to load. Two of these factors, relating to the societal impact of investment decisions and the health effects of tobacco, were highly significant in determining whether participants selected a tobacco or non-tobacco related investment. More importantly, we found that when the rate of return on a tobacco-related investment exceeds the rate of return on an investment not involving tobacco by 1%, the intensity of participant concerns about the societal effects of their investment decisions was especially important in determining investment choices. This finding indicates that traditional wealth-maximization approaches, which do not consider the personal values of the investor, omit an important factor that affects investment decisions. (shrink)

We investigate the role of personal values in an investment decision in a controlled experimental setting. Participants were asked to choose an investment in a bond issued by a tobacco company or a bond issued by a non-tobacco company that offered an equal or sometimes lower yield. We then surveyed the participants regarding their feelings toward tobacco use to determine whether these values influenced their investment decision. Using factor analysis, we identified investment- and tobacco-related dimensions on which participants’ responses tended (...) to load. Two of these factors, relating to the societal impact of investment decisions and the health effects of tobacco, were highly significant in determining whether participants selected a tobacco or non-tobacco related investment. More importantly, we found that when the rate of return on a tobacco-related investment exceeds the rate of return on an investment not involving tobacco by 1%, the intensity of participant concerns about the societal effects of their investment decisions was especially important in determining investment choices. This finding indicates that traditional wealth-maximization approaches, which do not consider the personal values of the investor, omit an important factor that affects investment decisions. (shrink)

Religious organisations are major investors with sometimes substantial investment volumes. An important question for them is how to make investments in, and to earn returns from, companies and activities that are consistent with their religious beliefs or that even support these beliefs. Religious organisations have pioneered responsible investment. Yet little is known about their investment attitudes. This article addresses this gap by studying faith consistent investing. Based on a survey complemented by interviews, we investigate religious organisations’ attitudes towards responsible investment (...) including opinions, practices and the impediments for implementing faith consistent investing. Although our results cannot be generalised because of the non-random character of our sample, six main characteristics of faith consistent investing are drawn: investing is not perceived as being in contradiction with religious values, religious values are important drivers, there is a strong community around faith consistent investing, religious investors are pioneering impact investing, implementing faith consistent investing is not without difficulties, and practices vary across regions. The survey also reveals that faith consistent investing has many commonalities with secular responsible investors. (shrink)

Religious organisations are major investors with sometimes substantial investment volumes. An important question for them is how to make investments in, and to earn returns from, companies and activities that are consistent with their religious beliefs or that even support these beliefs. Religious organisations have pioneered responsible investment. Yet little is known about their investment attitudes. This article addresses this gap by studying faith consistent investing. Based on a survey complemented by interviews, we investigate religious organisations’ attitudes towards responsible investment (...) including opinions, practices and the impediments for implementing faith consistent investing. Although our results cannot be generalised because of the non-random character of our sample, six main characteristics of faith consistent investing are drawn: investing is not perceived as being in contradiction with religious values, religious values are important drivers, there is a strong community around faith consistent investing, religious investors are pioneering impact investing, implementing faith consistent investing is not without difficulties, and practices vary across regions. The survey also reveals that faith consistent investing has many commonalities with secular responsible investors. (shrink)

The popular view of shareholder activism focuses on shareholder resolutions and the shareholder vote via proxy statements at the annual meeting, which is treated as a "David vs. Goliath" showdown between the small group of socially responsible investors and the powerful corporation. This article goes beyond the popular view to examine where the real action typically occurs-in the Dialogue process where corporations and shareholder activist groups mutually agree to ongoing communications to deal with a serious social issue. Use of the (...) capitalized word "Dialogue" is intended to distinguish this formal process between corporations and shareholders from all the other forms of dialogue or twoway communication exchanged between a corporation and its stakeholders. The phenomenon of Dialogue between a corporation and dissident shareholders has not been analyzed in the academic literature or in the popular press because it occurs behind the scenes and out of sight from media scrutiny. Yet this is where a great deal of social change initiated by shareholder activists is negotiated. This article contributes both theoretically and empirically to the study of Dialogues between shareholder activists and corporations. We explain how Dialogues occur in the context of the shareholder resolution process and examine two Dialogues that focus on international labor issues in two industries. Then data on Dialogues during the period, 1999-2005, from the Interfaith Center on Corporate Responsibility are analyzed. This research contributes to knowledge about the Dialogue process and the emerging literature on corporation-stakeholder engagement. (shrink)

The role and evaluation of the modern corporation is being challenged by multiple stakeholders, changing markets and public expectations. Unfortunately, corporate governance, regulation and accounting have played a prominent role in business failure for the past decade resulting in a growing lack of public confidence in our markets. We present a new model that contributes to improving the quality of corporate information by providing not more, but better information through increased intelligibility of overall information, benefiting both the firm and its (...) broad array of stakeholders. It has become apparent that boards, management and regulators have been unable to cope with the rise of business failures by adding increasing layers of regulation that have often served only to exacerbate the complexity and further cloud the transparency of needed information. We have identified a growing number of forward‐thinking firms that have found alternative means to provide betterinformation and strengthen their companies. We offer a stakeholder‐centric model for improving information intelligibility based upon the extensive scope and variety of external input derived from the growing social movement organizations. With the added focus on intelligibility, these groups can help foster greater corporate responsibility, meaningful transparency, increased stakeholder benefits, and improved overall performance of the firm. (shrink)

Investors concerned about the social and environmental impact of the companies they invest in are increasingly choosing to use voice over exit as a strategy. This article addresses the question of how and why the voice and exit options (Hirschman 1970) are used in social shareholder engagement (SSE) by religious organisations. Using an inductive case study approach, we examine seven engagements by three religious organisations considered to be at the forefront of SSE. We analyse the full engagement process rather than (...) focusing on particular tools or on outcomes. We map the key stages of the engagement processes and the influences on the decisions made at each stage to develop a model of the dynamics of voice and exit in SSE. This study finds that religious organisations divest for political rather than economic motives using exit as a form of voice. The silent exit option is not used by religious organisations in SSE, exit is not always the consequence of unsatisfactory voice outcomes, and voice can continue after exit. We discuss the implications of these dynamics and influences on decisions for further research in engagement. (shrink)

ABSTRACT:The primacy of shareholder demands in the traditional theory of the firm has typically excluded marginalised stakeholder voices. However, shareholders involved in social shareholder engagement purport to bring these voices into corporate decision-making. In response to ethical concerns about the legitimacy of SSE, we use the lens of discourse ethics to provide a normative analysis at both action and constitutional levels. By specifying three normative questions, we extend the analysis of SSE to identify a political role for shareholders in pursuit (...) of the common good. We demonstrate the desirability for SSE to promote regulatory/institutional change to guarantee marginalised stakeholders a voice in corporate decisions that affect them. The theory of SSE we propose thus calls into question the stark separation of the political and economic spheres and reveals an underlying tension, often overlooked, within the responsible investment literature. (shrink)

Is corporate social responsibility a tool for strategic positioning? While CSR is sometimes used as part of a differentiation strategy, this article analyzes which specific CSR strategies arise in response to competitive pressures. The results suggest that competitive pressures lead firms to increase their positive social actions without necessarily decreasing their social weaknesses. This positive impact varies with specific dimensions of CSR and industry specificities: Competition improves social performance toward core stakeholders to a greater extent than social performance toward peripheral (...) stakeholders. This effect is more pronounced in B2C industries than in other industries. Competition leads firms in “dirty” industries to ignore environmental initiatives. (shrink)