Non-Governmental Organizations, Shareholder Activism, and Socially Responsible Investments: Ethical, Strategic, and Governance Implications

Authors: Guay, Terrence; Doh, Jonathan; Sinclair, Graham

Source: Journal of Business Ethics, Volume 52, Number 1, June 2004 , pp. 125-139(15)

Publisher: Springer

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Abstract:

In this article, we document the growing influence of non-governmental organizations (NGOs) in the realm of socially responsible investing (SRI). Drawing from ethical and economic perspectives on stakeholder management and agency theory, we develop a framework to understand how and when NGOs will be most influential in shaping the ethical and social responsibility orientations of business using the emergence of SRI as the primary influencing vehicle. We find that NGOs have opportunities to influence corporate conduct via direct, indirect, and interactive influences on the investment community, and that the overall influence of NGOs as major actors in socially responsible investment is growing, with attendant consequences for corporate strategy, governance, and social performance.

Keywords: corporate governance; corporate social responsibility (CSR); corporate stakeholders; non-governmental organizations (NGOs); shareholder activism; socially responsible investing (SRI)

Document Type: Research article

DOI: http://dx.doi.org/10.1023/B:BUSI.0000033112.11461.69

Affiliations: 1: Email: guay@american.edu

Publication date: 2004-06-01