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Non-Governmental Organizations, Shareholder Activism, and Socially Responsible Investments: Ethical, Strategic, and Governance Implications

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Abstract

In this article, we document the growing influence of non-governmental organizations (NGOs) in the realm of socially responsible investing (SRI). Drawing from ethical and economic perspectives on stakeholder management and agency theory, we develop a framework to understand how and when NGOs will be most influential in shaping the ethical and social responsibility orientations of business using the emergence of SRI as the primary influencing vehicle. We find that NGOs have opportunities to influence corporate conduct via direct, indirect, and interactive influences on the investment community, and that the overall influence of NGOs as major actors in socially responsible investment is growing, with attendant consequences for corporate strategy, governance, and social performance.

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Authors and Affiliations

  1. The Smeal College of Business, The Pennsylvania State University, University Park, PA, 16802, U.S.A.

    Terrence Guay, Jonathan P. Doh & Graham Sinclair

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  1. Terrence Guay
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  2. Jonathan P. Doh
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  3. Graham Sinclair
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Guay, T., Doh, J.P. & Sinclair, G. Non-Governmental Organizations, Shareholder Activism, and Socially Responsible Investments: Ethical, Strategic, and Governance Implications. Journal of Business Ethics 52, 125–139 (2004). https://doi.org/10.1023/B:BUSI.0000033112.11461.69

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