How can firms support their customers' collaborative, social responsibility initiatives — and especially pro-environmental, firm—customer collaborations? Does corporate transparency affect customers' willingness to undertake pro-environmental collaborative programs? This study addresses these questions in relation to the US residential electricity market. It focuses on the impact of customers' perceptions of the utility's degree of transparency and on the willingness to engage in proenvironmental behavior related to electricity consumption. The responses of 1257 interviewees from US households to questions related to their electricity (...) suppliers are analyzed through structural equation models (SEMs) using latent variables. Results show that customers' perceptions of an electricity utility's transparency affect their willingness to collaborate in environmental programs, and that the degree of perceived transparency of the utility is related to customers' environmental awareness. (shrink)

As a sovereign wealth fund, the $1 trillion Norwegian Government Pension Fund-Global, which is managed by Norges Bank Investment Management on behalf of the welfare of Norway’s citizens, is supposed to be a flagship for socially responsible investments through its Council of Ethics. However, its investment in Delta Topco, the holding company of Formula 1 world championship that, through Formula One Group, brokered a deal with Russia to host a Formula 1 Grand Prix in 2014, raises the question of whether (...) the Oil Fund should enhance its due diligence processes. Although no evidence of corruption related to the race is introduced, the complex relation between financial logic and the world of sports still raises questions about the ethical solidity of the Oil Fund’s investment. Drawing upon reports of the relationship between political economy and sporting events, this paper therefore analyses, in light of the Oil Fund’s ethical guidelines, the complexities of its investment in Delta Topco. As a result, it is argued that a new set of examination methods by the Council of Ethics may be warranted. (shrink)

Transparency has evolved from an individual, dangerous power in Plato to a desirable, collective property in the contemporary world. This paper intends to give a brief account of this long and somehow surprising path and extract some interesting consequences for economic and political activities, as well as for information technologies. Six literary masterpieces are used to highlight the contradictions and dangers entailed by the abuse of the fascinating metaphor of transparency. In the end, what is usually intended when demanding transparency (...) from a corporation, a firm or a state is more (or more accessible) information about it, i.e., understandable and abundant black and white data. This means reporting, picturing, producing material, becoming apparent, which is precisely the contrary of being transparent. We don’t want to look through , but to look directly at . The question, then, is not transparency, but opacity: what do we need and want to see, and how is this going to be produced? (shrink)

Managers have a unique fiduciary responsibility to shareholders of a firm that implies a set of ethical obligations. At a minimum, managers are required to protect shareholder’s interests when other stakeholders are unaffected by their decision. This ethical imperative has been established in the literature. In cases of conflicts of interest between managers and shareholders, the board of directors of the firm has an ethical obligation to shareholders. The structure of the board can affect its ability to fulfill this obligation. (...) Two specific cases where managerial actions have been argued to be unethical are the adoption of classified boards and poison pills. In this study, we empirically analyze the role of board structure in protecting shareholder rights in the specific case of antitakeover provisions. We test this question on a sample of firms whose shareholders have voted to remove antitakeover provisions and find that independent, focused boards are more likely to accede to shareholder resolutions than are less independent boards. Board size is also important and related to other board structures. We draw implications of this finding for future research on the ethics of board governance.What’s really needed is a change in mindset—one that fosters not only a culture of compliance but also a company-wide environment that fosters ethical behavior and decision-making.—William H. Donaldson, SEC Chairman (2004). (shrink)

From a simple idea to unite asset owners in their quest for responsible investment at its launch in April 2006, the United Nations supported Principles for Responsible Investment have grown in just one decade into an initiative with more than 1500 fee-paying signatories. Jointly, the PRI’s signatories hold assets worth more than $80 trillion, making it one of the more prevalent not-for-profit organizations worldwide. Furthermore, the PRI’s ambitious mission to transform the financial system at large into a more sustainable one (...) makes it a worthwhile subject of inquiry from an institutional perspective. We undertake an empirical investigation of the adoption of the PRI by asset owners during five crucial years of the association’s emergence: 2007–2011. Following a tripartite view of institutional theory proposed by Scott, we explore if regulative, normative, and cultural–cognitive factors influence an asset owner’s decision to subscribe to the PRI. Applying both parametric and non-parametric survival analysis, we find that asset owners are indeed significantly affected by normative, cultural–cognitive, and regulative aspects. In particular, public service employee and labor union pension funds from social backgrounds more culturally aligned with values represented by the RI movement with historically more voluntary legislation on environmental, social, and governance issues are most likely to sign the PRI. In contrast, institutional environments with a higher number of pre-existing mandatory ESG regulation decrease the likelihood of signing the PRI. Our results indicate that normative and cultural–cognitive factors were crucial contributors to the PRI’s growth. With respect to the regulative environments, our results imply that some asset owners may use the PRI as a collective industry initiative to substitute for mandatory legislation. Conversely, a high level of historical mandatory legislation may constrain organizational resources that could otherwise be dedicated to voluntary initiatives such as PRI. Our findings are robust to relevant controls and econometric concerns. (shrink)

Despite the increase in the acceptance of responsible investing in general, the global community is still witnessing unprecedented levels of practices that can only be categorized as “unsustainable”. It appears, then, that either the inroads made by the RI community have not kept up with the increase in unsustainable practices, or, that the RI process itself has been ineffective at producing meaningful change. The current study aims to investigate the practices used by pension plan sponsors to determine how they may (...) enable, or interfere with, the adoption of implementation of RI. We adopt Framing Theory, specifically the idea that particular frames find alignment when they resonate with their targets, by either bridging, extending, amplifying or transforming a domain. We extend research to include understudied practices by performing an analysis of 60 public pension funds in Canada. We find evidence of disconnect between the financial frame which dominates practices for compliance and evaluation, and the social frame of RI as a source of change. If the aim of RI is to produce long-term change, then a consideration of whether it aligns with extant practices is critical. We discover a variety of frame alignment tactics already employed in practice. We also find that, even within the dominant financial frame, opportunities for frame extension, amplification and transformation do exist, and examine how these are more possible depending on how the asset management structure is designed. (shrink)

The issue of trust has increasingly attracted attention in the business ethics literature. Our aim is to contribute further to this literature by examining how the use of the carbon copy function in email communication influences felt trust. We develop the argument that the use of cc enhances transparency—representing an important characteristic of workplace ethics—and hence promotes trust. We further argue that a downside of the cc option may be that it can also be experienced as a control mechanism, which (...) may therefore negatively affect trust. The results of our first study showed that the use of cc indeed enhances perceived transparency, but at the same time also leads to the experience of increased control. Building upon this insight, the findings of five subsequent studies consistently revealed that the use of cc negatively influences felt trust. More precisely, employees felt trusted the least when the supervisor was always included in cc. This effect on felt trust also negatively influenced how trustworthy the organizational climate was perceived. We further replicated these results in two field surveys, which showed that the negative effect of cc on felt trust lowered perceptions of psychological safety and contributed to a culture of fear. Taken together, our findings suggest that when transparency in email communications is experienced as a control mechanism, its use is perceived as unethical, rather than as ethical. Implications and recommendations for future business ethics research are discussed. (shrink)

In the face of ubiquitous information communication technology, the presence of blogs, personal websites, and public message boards give the illusion of uncensored criticism and discussion of the ethical implications of business activities. However, little attention has been paid to the limitations on free speech posed by the control of access to the Internet by private entities, enabling them to censor content that is deemed critical of corporate or public policy. The premise of this research is that transparency alone will (...) not achieve the desired results if ICT is used in a one way system, controlled by the provider of information. Stakeholders must have an avenue using the same technology to respond to and interact with the information. We propose a model that imposes on corporations a public trust, requiring these gatekeepers of communication technology to preserve individual rights to criticism and review. (shrink)