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FTSE4Good: exploring its implications for corporate conduct

Author

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  • David Collison
  • George Cobb
  • David Power
  • Lorna Stevenson

Abstract

Purpose - The purpose of the paper is to critically evaluate membership of the FTSE4Good “socially responsible investment” indices (membership of which is based on ethical criteria), which were launched in the UK in July 2001 as a means of increased accountability and change. Design/methodology/approach - The paper adopts an interpretive and critical approach when examining the perceptions of company representatives. The empirical findings are based on a small number of interviews and a postal questionnaire. Some descriptive and inferential statistics are used to summarise and help interpret the questionnaire results. Findings - Respondents indicated that inclusion in the indices had a significant effect on their firms' reputation, and on relationships with specific stakeholder groups. All interviewees emphasised that peer group pressure encouraged top management to maintain their membership of the indices. Questionnaire respondents indicated an even balance of views regarding tightening the admission criteria for the indices. The influence of FTSE4Good on corporate conduct was found to be limited and mainly confined to reporting activity, though policy and management systems were amongst other areas where some impacts were noted. A small proportion of respondents felt that membership of the indices had had some significant influences on their companies. Originality/value - The investigation of the influence of a “mass market” ethical investment index on constituent companies is where the main originality of this paper lies. In particular the interviews with constituent firm representatives and the questionnaire results are novel for ascertaining perceptions about the impact of inclusion in the indices on constituent companies.

Suggested Citation

  • David Collison & George Cobb & David Power & Lorna Stevenson, 2009. "FTSE4Good: exploring its implications for corporate conduct," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 22(1), pages 35-58, January.
    • Handle: RePEc:eme:aaajpp:v:22:y:2009:i:1:p:35-58
    DOI: 10.1108/09513570910923006
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    References listed on IDEAS

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    2. Junjie Wu & George Lodorfos & Aftab Dean & Georgios Gioulmpaxiotis, 2017. "The Market Performance of Socially Responsible Investment during Periods of the Economic Cycle – Illustrated Using the Case of FTSE," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(2), pages 238-251, March.
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    5. Carsten Albers & Thomas Günther, 2010. "Disclose or not disclose: determinants of social reporting for STOXX Europe 600 firms," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 21(3), pages 323-347, November.
    6. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    7. J. Emil Morhardt, 2010. "Corporate social responsibility and sustainability reporting on the Internet," Business Strategy and the Environment, Wiley Blackwell, vol. 19(7), pages 436-452, November.
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