Journal of Business Ethics

, Volume 125, Issue 2, pp 193–210 | Cite as

Social Shareholder Engagement: The Dynamics of Voice and Exit

  • Jennifer Goodman
  • Céline Louche
  • Katinka C. van Cranenburgh
  • Daniel Arenas
Article

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.

Keywords

Engagement process Religious organisations Responsible investment Social shareholder engagement Voice and exit 

Abbreviations

AGM

Annual General Meeting

CAAT

Campaign Against Arms Trade

CIG

Church Investors Group

EIAG

Ethical Investment Advisory Group

ICCR

Interfaith Center on Corporate Responsibility

IRRC

Investor Responsibility Research Center

JPIC

Justice, Peace and Integrity of Creation

JRCT

Joseph Rowntree Charitable Trust

NGO

Non-Governmental Organisation

PETA

People for the Ethical Treatment of Animals

RI

Responsible Investment

SEC

Securities and Exchange Commission

SSE

Social Shareholder Engagement

UNPRI

United Nations Principles for Responsible Investment

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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  • Jennifer Goodman
    • 1
  • Céline Louche
    • 2
  • Katinka C. van Cranenburgh
    • 3
  • Daniel Arenas
    • 4
  1. 1.ESADE Business SchoolRamon Llull UniversitySant Cugat del VallèsSpain
  2. 2.Audencia School of ManagementNantes Cedex 3France
  3. 3.Rotterdam School of ManagementErasmus UniversityRotterdamThe Netherlands
  4. 4.ESADE Business SchoolRamon Llull UniversityBarcelonaSpain

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