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Social Shareholder Engagement: The Dynamics of Voice and Exit

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  • Jennifer Goodman
  • Céline Louche
  • Katinka Cranenburgh
  • Daniel Arenas

Abstract

Investors concerned about the social and environmental impact of the companies they invest in are increasingly choosing to use voice over exit as a strategy. This article addresses the question of how and why the voice and exit options (Hirschman 1970 ) are used in social shareholder engagement (SSE) by religious organisations. Using an inductive case study approach, we examine seven engagements by three religious organisations considered to be at the forefront of SSE. We analyse the full engagement process rather than focusing on particular tools or on outcomes. We map the key stages of the engagement processes and the influences on the decisions made at each stage to develop a model of the dynamics of voice and exit in SSE. This study finds that religious organisations divest for political rather than economic motives using exit as a form of voice. The silent exit option is not used by religious organisations in SSE, exit is not always the consequence of unsatisfactory voice outcomes, and voice can continue after exit. We discuss the implications of these dynamics and influences on decisions for further research in engagement. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Jennifer Goodman & Céline Louche & Katinka Cranenburgh & Daniel Arenas, 2014. "Social Shareholder Engagement: The Dynamics of Voice and Exit," Journal of Business Ethics, Springer, vol. 125(2), pages 193-210, December.
    • Handle: RePEc:kap:jbuset:v:125:y:2014:i:2:p:193-210
    DOI: 10.1007/s10551-013-1890-0
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    5. Joel Diener & André Habisch, 2022. "Developing an Impact-Focused Typology of Socially Responsible Fund Providers," JRFM, MDPI, vol. 15(7), pages 1-18, July.
    6. Fabrizio Ferraro & Daniel Beunza, 2018. "Creating Common Ground: A Communicative Action Model of Dialogue in Shareholder Engagement," Organization Science, INFORMS, vol. 29(6), pages 1187-1207, December.
    7. Rachelle Belinga & Blanche Segrestin, 2016. "Proxy voting policies as tools for shareholder engagement in CSR: an exploratory study," Post-Print hal-01312918, HAL.
    8. Incheol Kim & Hong Wan & Bin Wang & Tina Yang, 2019. "Institutional Investors and Corporate Environmental, Social, and Governance Policies: Evidence from Toxics Release Data," Management Science, INFORMS, vol. 65(10), pages 4901-4926, October.
    9. Céline Louche & Timo Busch & Patricia Crifo & Alfred Marcus, 2019. "Financial Markets and the Transition to a Low-Carbon Economy: Challenging the Dominant Logics," Post-Print hal-02016756, HAL.

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