One proxy at a time : pursuing social change through shareholder proposals
Traditional economic wisdom holds that a corporation’s sole goal should be to maximize shareholder wealth. But some investors believe that firms should also act as agents for social change. Activist investors use their shareholder rights to place socially responsible resolutions on corporate proxy statements to be voted on by all shareholders. ; This article examines the controversy behind corporate social responsibility (CSR) and identifies and categorizes activist investors, their objectives, and the firms they target. Using data from the Investor Responsibility Research Center (IRRC) on 2,829 CSR shareholder proposals from 1992 to 2002, the author finds that religious organizations and individuals made the largest number of proposals, but in 2000 proposals by socially responsible mutual funds began to outnumber those by individuals. The three most common proposal topics were international conduct, environmental issues, and antidiscrimination. ; Of the 566 different corporations targeted, seventy-three were targeted ten times or more. Larger, economically powerful firms—especially those that value consumer goodwill and have the “name” to aid in social change—were most often targeted. ; Because a withdrawn resolution usually signals an action by the corporation—dialogue, agreement to resolution, or some other compromise—the author argues that withdrawn proposals can be used as measure of activism’s success. The IRRC data and her own extensive research on the outcome of withdrawn proposals support this argument.
Volume (Year): (2006)
Issue (Month): Q 3 ()
|Contact details of provider:|| Postal: |
Web page: http://www.frbatlanta.org/
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Willard T. Carleton & James M. Nelson & Michael S. Weisbach, 1998. "The Influence of Institutions on Corporate Governance through Private Negotiations: Evidence from TIAA-CREF," Journal of Finance, American Finance Association, vol. 53(4), pages 1335-1362, 08.
- Roberta Romano, 2001. "Less is More: Making Shareholder Activism a Valuable Mechanism of Corporate Governance," CeRP Working Papers 12, Center for Research on Pensions and Welfare Policies, Turin (Italy).
When requesting a correction, please mention this item's handle: RePEc:fip:fedaer:y:2006:i:q3:p:1-20:n:v.91no.3. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Meredith Rector)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.