Domesticating Radical Rant and Rage: An Exploration of the Consequences of Environmental Shareholder Resolutions on Corporate Environmental Performance (original) (raw)
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International Journal of Management Reviews, 2017
Shareholders have become increasingly active in endeavouring to influence companies’ environmental and social practices. In comparison with the mature field of financially motivated shareholder activism, limited enquiries have been carried out on its non‐financial counterparts. This paper synthesizes the knowledge base through a review of the academic literature, exploring shareholder activism intended to affect corporate environmental and social performance. Theoretical perspectives appropriate to this phenomenon are critically appraised: in particular, insights from social movement theory, Hirschman's theory of exit, voice and loyalty and stakeholder salience theory, as well as the roles of signalling and symbolic management actions. Data from the literature are organized into a process model of non‐financial shareholder influence. Underpinned by the influencing context, this conceptualization centres on three primary shareholder interventions: divestment, dialogue and shareho...
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We study relationships between shareholder proposal activism, managerial response, and corporate social performance (CSP). We find that shareholder proposal activism reduces CSP. We infer that rather than pressuring firms to improve CSP, activism may engender diversion of resources away from CSP into political activities used by managers to resist external pressures and retain discretion. We also find that managers are more likely to settle proposals filed by 'salient' shareholders (i.e., those with power, legitimacy, and urgency). Settlement with salient shareholders, however, also reduces CSP, suggesting that managers' responses are symbolic; i.e., they settle with salient shareholders to demonstrate conformance but continue to resist making the substantive changes to core policies that may compromise their discretion.
2006
We study relationships between shareholder proposal activism, managerial response, and corporate social performance (CSP). We find that shareholder proposal activism reduces CSP. We infer that rather than pressuring firms to improve CSP, activism may engender diversion of resources away from CSP into political activities used by managers to resist external pressures and retain discretion. We also find that managers are more likely to settle proposals filed by ‘salient’ shareholders (i.e., those with power, legitimacy, and urgency). Settlement with salient shareholders, however, also reduces CSP, suggesting that managers’ responses are symbolic; i.e., they settle with salient shareholders to demonstrate conformance but continue to resist making the substantive changes to core policies that may compromise their discretion. Copyright 2007 John Wiley & Sons, Ltd.
Shareholder Activism for Corporate Social Responsibility: What Do We Know
There is a growing body of research on shareholder activism for corporate social and environmental responsibility. This paper maps and synthesizes research on this topic during 1983-2007. Five key themes emerge. (1) Several studies address shareholder proposals in the US, including proposal topics, voting results, and typical targets for such activism.
Explaining Differences in Firms' Responses to Activism
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Activist campaigns describe efforts to modify socially or environmentally detrimental industry practices by contesting prominent industry members' versions of those practices (i.e., target firms). We adopt a sociocognitive perspective to account for variance in when and how the managers of target and nontarget firms attend to, interpret, and respond to pressure from activists. Overall, we enhance theory by explaining why firms in an industry differ in their reactions to activism, even when they are subject to common campaigns and strategies. We are grateful for the thoughtful advice from the editor, Roy Suddaby, and three anonymous reviewers, as well as our colleagues Mary Ann Glynn, Mike Pfarrer, and Tyler Wry. The first two authors equally contributed to the development of this manuscript.
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We study 944 shareholder proposals submitted to 343 U.S. firms on climate change issues during 2009–2022. We use logistic and two-stage regression to estimate the propensity for a firm to be targeted or subjected to a vote at the annual general meeting and, for voted proposals, the determinants of that vote. We also examine whether climate-related proposals affect investor returns and how they relate to firms’ future environmental performance and greenhouse gas emissions. Compared to a matched sample, we first find that activists target larger, more carbon-intensive, and less R&D-active firms. Second, voting likelihood is higher for firms with repeated and operations-related proposals and lower pre-proposal environmental ratings. By contrast, disclosure-related proposals are likelier to be negotiated and withdrawn. Third, repeated and operations-related proposals receive higher votes in favor, whereas votes on carbon-intensive firms do not. Fourth, building on the theory that invest...