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Social Shareholder Engagement: The Dynamics of Voice and Exit

Author

Listed:
  • Jennifer Goodman

    (ESADE - École supérieure d'administration et de direction d'entreprises = Escola Superior d'Administració i Direcció d'Empreses [Ramon Llull University])

  • Céline Louche

    (Audencia Recherche - Audencia Business School)

  • Katinka C. van Cranenburgh

    (ESADE - École supérieure d'administration et de direction d'entreprises = Escola Superior d'Administració i Direcció d'Empreses [Ramon Llull University])

  • Daniel Arenas

    (ESADE - École supérieure d'administration et de direction d'entreprises = Escola Superior d'Administració i Direcció d'Empreses [Ramon Llull University])

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.

Suggested Citation

  • Jennifer Goodman & Céline Louche & Katinka C. van Cranenburgh & Daniel Arenas, 2014. "Social Shareholder Engagement: The Dynamics of Voice and Exit," Post-Print hal-01098168, HAL.
    • Handle: RePEc:hal:journl:hal-01098168
    DOI: 10.1007/s10551-013-1890-0
    Note: View the original document on HAL open archive server: https://audencia.hal.science/hal-01098168
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    2. Maria Ruiz‐Castillo & Juan Alberto Aragón‐Correa & Nuria Esther Hurtado‐Torres, 2024. "Independent directors and environmental innovations: How the visibility of public and private shareholders' environmental activism moderates the influence of board independence," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 424-440, February.
    3. Rachelle Belinga & Blanche Segrestin, 2016. "Proxy voting policies as tools for shareholder engagement in CSR: an exploratory study," Post-Print hal-01312918, HAL.
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    5. 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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    7. Amos M. Kimunya & Amos Njuguna & Francis Wambalaba, 2019. "Shareholder loyalty and firm value creating outcomes in Kenya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 8(5), pages 212-219, September.
    8. Salome Zimmermann, 2019. "Same Same but Different: How and Why Banks Approach Sustainability," Sustainability, MDPI, vol. 11(8), pages 1-20, April.
    9. Joel Diener & André Habisch, 2022. "Developing an Impact-Focused Typology of Socially Responsible Fund Providers," JRFM, MDPI, vol. 15(7), pages 1-18, July.
    10. 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.

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    Keywords

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