Journal of Business Ethics

, Volume 112, Issue 1, pp 137–154

Corporate Responses to Shareholder Activists: Considering the Dialogue Alternative

  • Kathleen Rehbein
  • Jeanne M. Logsdon
  • Harry J. Van BurenIII
Article

DOI: 10.1007/s10551-012-1237-2

Cite this article as:
Rehbein, K., Logsdon, J.M. & Van Buren, H.J. J Bus Ethics (2013) 112: 137. doi:10.1007/s10551-012-1237-2

Abstract

This empirical study examines corporate responses to activist shareholder groups filing social-policy shareholder resolutions. Using resource dependency theory as our conceptual framing, we identify some of the drivers of corporate responses to shareholder activists. This study departs from previous studies by including a fourth possible corporate response, engaging in dialogue. Dialogue, an alternative to shareholder resolutions filed by activists, is a process in which corporations and activist shareholder groups mutually agree to engage in ongoing negotiations to deal with social issues. Based on a unique dataset of resolutions filed by member organizations of the Interfaith Center on Corporate Responsibility from 2002 to 2005 and the outcomes of these resolutions, our analysis finds that corporate managers are more likely to engage in dialogue with shareholder activists when the firm is larger, is more responsive to stakeholders, the CEO is the board chair, and the firm has a relatively lower percentage of institutional investors.

Keywords

Corporate governanceCorporate social responsibilityDialogueShareholder activismShareholder resolutionsSocial activismInterfaith Center on Corporate Responsibility

Copyright information

© Springer Science+Business Media B.V. 2012

Authors and Affiliations

  • Kathleen Rehbein
    • 1
  • Jeanne M. Logsdon
    • 2
  • Harry J. Van BurenIII
    • 2
  1. 1.Marquette UniversityMilwaukeeUSA
  2. 2.University of New MexicoAlbuquerqueUSA