I’m on the editorial advisory board of the Critical Studies on Corporate Responsibility, Governance and Sustainability series of books to be published by Emerald and so am helping them scour the world for contributing authors. The next book in the series will be edited by Dr. Suzanne Young, Associate Professor, La Trobe University, Australia, and Professor Stephen Gates, Audencia Nantes School of Management, France. The topic is Institutional Investors and Corporate Responses: Actors, Power and Responses. How Do Institutional Investors Use Their Power to Promote the Sustainability Agenda? How Do Corporations Respond?
In many economies, institutional investors such as pension funds hold the largest share of stocks, and as such are the dominant shareholder class. They are increasingly using their power to bring about a change of corporate behaviors. Institutional investors are also seeking additional information from public companies concerning their environmental, social and governance (ESG) practices in order to make their investment decisions. Their agenda includes numerous issues such as:
- Environment: Greenhouse gas emissions, Energy usage, Water pollution and usage, Hazardous materials disposal, Deforestation, etc.
- Social: Diversity, Human rights, Recognition of labor unions, Health and safety issues, Employee training, etc.
- Governance: Promotion of practice of independent directors, Opposition to unwise diversification, Involvement in takeovers, Opposition to management protection devices, Opposition to cash retention and unnecessary investments, Opposition to excessive management compensation, etc.
Beneficiaries of these shares, namely the general public, may prefer that these funds be invested in a socially responsible way. Emerging from humble beginnings as specialist funds, social responsibility investors (SRI) now claim that they are steadily increasing their percentage of total assets under management in Europe, North America and the Asia-Pacific. Moreover, SRI investors argue that their approach is influencing the investment behavior of the majority of pension funds. Investors are increasingly employing their shareholder power through various methods of utilizing ESG criteria such as:
- Excluding companies from an investment universe using negative screening criteria (e.g. alcohol, gambling, weapons, etc.)
- Including companies in an investment universe using positive performance on ESG criteria
- Ranking and selecting “Best-in-class” companies for their investment portfolios
- Integrating fully ESG criteria with financial criteria in the investment decision process
This special volume will explore both descriptive and theoretical issues involving growing investor power and how corporations are responding. Among the questions this special volume may consider are:
- How much power do investors really have?
- Where does their power originate from?
- How have pension funds that include ESG criteria used their power to bring about more socially responsible behavior from public companies?
- How do investors communicate with company boards?
- Investors can be divided into several categories by their approach. Which categories are growing fastest and why?
- Which investors have real power with corporations and why?
- How effective are investors’ various approaches? Under which conditions do these various approaches succeed?
- How do SRI rating agencies influence pension funds and investor decisions?
- How are company ESG reports used by rating agencies, pension funds and investors?
- What types of ESG risks are communicated by companies?
- Does communication of ESG risks alter investor behavior?
Corporate responses to institutional investors
- Do corporate responses to institutional investors vary depending on:
- type of screening approach?
- industry conditions?
- corporate strategies being pursued?
- Which corporate responses are most effective in satisfying investor concerns?
- How can SRI investors encourage corporations to take concrete, measurable actions (positive response) and discourage them from taking cosmetic actions intended to enhance their reputation (negative response)?
- What is the place of reporting in these responses?
All theoretical approaches to investigating the corporate response to institutional investors’ increasing power are welcome.
Editorial Objectives of the Series: The aim of this book series is to explore deeply and rethink critically the theoretical debates, public concerns, institutional policies and practical issues in the broad areas of corporate responsibility, corporate governance and sustainability around the world. It examines the social, economic and environmental impacts of corporations, and the real effects of corporate governance, CSR and business sustainability in different societies. It facilitates a better understanding of how different value systems, cultures and traditions in different societies may affect the policies and practices of corporate responsibility, governance and sustainability. It identifies the future development trends of corporate responsibility, governance and sustainability in different contexts when examining and exploring those key issues.
Information on the book series can be found on the Emerald website.
Editorial Policy: All the volumes in the series are under the scrutiny of peer and expert reviews before accepted for publication, and in accordance with high academic standard and quality. The series is edited under the advice of an Editorial Advisory Board that is composed of highly experienced senior level experts in the related subject areas in different countries. For this volume all contributions will be subject to peer review firstly by the Editors of this Volume and secondly by the Editorial Advisory Board.
Timeline: The Volume will be published on late 2012. To this end contributors will need to submit to the Editors an extended Abstract of 600 words by the end of October 2011. Contributors will be notified of tentative acceptance after review by the end of November 2011. Full chapters will be required by the end of June 2012.
Contact: Dr Suzanne Young and/or Professor Stephen Gates. I would also ask that those inspired to join this project by reading the announcement on CorpGov.net also cc me, James McRitchie, so that I can be of further assistance. I’ve already been involved in shaping a couple of chapters in this important series and can say that some ground breaking perspectives are being included.