STRATEGIC ORGANIZATION Vol 4(2): 165–190

DOI: 10.1177/1476127006064067
Copyright ©2006 Sage Publications (London,Thousand Oaks, CA and New Delhi)
http://so.sagepub.com

Shaping the shareholder activism

agenda: institutional investors and
global social issues
W.Trexler Proffitt, Jr Franklin & Marshall College, USA

Andrew Spicer University of South Carolina, USA

Abstract
We examine the issues and actors that have shaped the agenda of shareholder activism on
global social issues over the last 35 years. Our analysis of 2158 US shareholders’ proposals
on the topics of international human rights and labor standards reveals that a clear agenda
has developed, dominated by religious organizations that have sponsored or co-sponsored
1312 of these proposals. Public pension funds entered the field of global social issue
activism after religious organizations had already established the legitimacy of the agenda.
We suggest that a social movement perspective on shareholder activism best explains
these findings. Religious groups framed the ideas that constitute the global social issues
shareholder agenda and mobilized support by reaching out to other types of investors.
Public pension funds played a secondary, albeit important, role in agenda creation by cham-
pioning several of the campaigns initiated by religious innovators.

Key words • globalization • human rights • institutional investor • labor standards • shareholder
activism • social movement

A growing literature studies institutional investors mobilizing as a social move-

ment, developing increasing power to influence the behavior of business firms
(Useem, 1993; Davis and Thompson, 1994; Donaldson, 1994; Monks and
Minow, 1995). Yet, in comparison to the growing amount of research into the
role of institutional investors in shaping the corporate governance agenda,
the academic literature is relatively silent about the role of activist funds in
shaping the agenda of corporate social responsibility (for an exception, see
Hoffman, 1996). We know little about the trends, players and success trajecto-
ries of social issues shareholder campaigns. What types of institutional investors
are actively involved in pursuing social agendas? What concerns do they high-
light? Are they successful in steering corporate awareness to social issues? How
can the findings inform a more generalized theory of investor mobilization?
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We address these questions through an analysis of all US shareholder pro-

posals introduced on the topic of international human rights and labor standards
between 1969 and 2003. This arena, which we call global social issues (GSI), is
characterized by moral claims on corporations that urge them to pay attention
to their social responsibilities in the multiple communities in which they oper-
ate. Our shareholder proposal database provides the empirical record to examine
the actual behavior of institutional investors as social advocates. It identifies
which categories of institutional investor shaped this agenda and when. Second,
it shows which topics reached critical salience and how. Finally, it illustrates
trends in success over time.
Given the lack of existing research into the role of shareholder activism in
social issues, we use an inductive method to analyze our data. We build upon
evidence in the development of the global social issues agenda to contribute to a
growing research agenda on shareholder activism. One of our most prominent
findings is that, by far, religious organizations were the earliest and most prolific
activists over the 35 years of our sample. Of the 2158 GSI proposals in our data-
base, religious groups sponsored or co-sponsored 1312. Public pension funds
sponsored or co-sponsored the second largest number at 864, and no other type
of institutional investor introduced more than 90 proposals. Religious organiza-
tions were innovators in coming up with the first proposals in most topic areas
and in battling the companies and the Securities and Exchange Commission
(SEC) for acceptance of the topic. Public pension funds entered the field of
global social issue activism after religious and other activist organizations had
already established the legitimacy of the agenda. They played a secondary, albeit
important, championing role.
To explain this finding, as well as the broader dynamics behind the con-
struction of the GSI agenda over the last 35 years, we adopt a social movement
perspective. The relationship between activism and agenda-framing is well
established in this literature. Agenda construction is a path-dependent, collec-
tive activity demanding persistence and coalition building (Baumgartner and
Jones, 1993; Baumgartner and Mahoney, 2005). Interest groups that are not
sufficiently powerful on their own bring new issues to the attention of policy-
makers and enlist the support of a broad range of other groups to support their
cause (Jenkins and Perrow, 1977).
Coalitions in social movements bring new attention to a topic by ‘framing’ it
in pre-existing cultural beliefs and attitudes, synchronizing with prior or current
campaigns, and mobilizing sufficient resources to pressure powerful decision-
makers (McCarthy and Zald, 1977; Benford and Snow, 2000). Social movement
organizations ‘devote considerable time to constructing particular versions of
reality, developing and espousing alternative visions of that reality, attempting to
affect various audiences’ interpretations, and managing the impressions people
form about their movement’ (Benford, 1993: 678). Social movement activists
strive to shape collective attitudes and beliefs over a long time period as much as
to force change immediately through case-by-case struggles.
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We suggest that a social movement perspective explains the prominent role

of religious organizations in our sample. Previous research on shareholder
activism looks at the role of fund size as an important predictor of investor
activism (Ryan and Schneider, 2002) and at immediate corporate responses to
activism as a measure of proposal success (Karpoff et al., 1996; Wahal, 1996).
Neither of these approaches adequately explains why religious organizations
participate so actively in shareholder activism. Most religious organizations have
nowhere near the asset base or professional staff of public pension systems. Nor
do they have much hope of directly influencing corporate behavior by winning
a majority of votes. Proposals rarely pass. It is difficult to explain their activism
in shaping the GSI agenda unless their activity stems from a moral motivation
with a long-term horizon. For a morally motivated investor with a long-term
view, shaping the issues that subsequent activists, perhaps years in the future,
can build upon may be more important than immediate success in transforming
the behavior of a particular corporation at a particular time. Prior work
emphasizes that corporate social responsibility efforts in general may not have
short-term financial performance impacts (McWilliams and Siegel, 2000). We
extend that argument here to examine the collective and long-term impacts on
agendas and coalitions.
An important contribution of our analysis is that we find evidence for these
long-term effects. The raw count and success rate data indicate that in the share-
holder activism arena, the annual cycle of proposal generation and voting builds
slowly. Yet, for campaigns that demonstrate growing mobilization, noticeable
patterns of increasing success are apparent. As issues become legitimized and
articulated through the repeated introduction of proposals on a similar theme,
the more likely it is that subsequent proposals will prove successful. Over the
long run, the persistence of religious organizations has helped to shape a new
agenda of shareholder activism on global social issues.
The paper is organized as follows. We first examine the political opening of
a new agenda for shareholder activism that emerged in 1970 in the US. We then
describe the data that we use to look at the emergence of that agenda over the
last 35 years. We look at the issues that defined the agenda as well as the actors
that shaped it. We conclude by elaborating the key theoretical implications of
our analysis for the broader field of shareholder activism as a social movement
mobilization process.

The opening of a new agenda

Researchers focusing on the mobilization of institutional investors as share-

holder activists have tended to start their analytic clocks at the time when
public pension funds began to receive the most attention, around the founding
of the Council of Institutional Investors in 1985 (Useem, 1993; Davis and
Thompson, 1994). In this view, the US corporate governance movement began
168 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

in earnest when some of the largest investing institutions became interested in

it. Our agenda-centered approach provides a more complete picture of how
investor activism works than a narrow focus on the period of 1985–94.
Consistent with a social movement approach, we mark the beginning of social
issues shareholder mobilization as the moment when a political opportunity for
such activism arose: the legal ruling allowing social policy topics in 1970.
The SEC promulgated the first version of the modern federal shareholder
proposal rule in 1942. While the specific elements of the rule have evolved in
light of interpretation and challenge, the principle of permitting a shareholder
to use the management-issued proxy statement to communicate a proposal to all
shareholders for an advisory vote remains at the core of the rule (Booth, 1987).
Any shareholder entitled to vote at the annual meeting, by giving sufficient
notice and confining proposal topics to issues of shareholder interests, is allowed
access to the management proxy statement and ballot. Once a proposal has been
properly submitted, corporate officials then choose between three courses of
action:
1 publishing and distributing the proposal, the proponent’s brief supporting
‘words of reason’ and management’s opposing statement, in the proxy mate-
rials, and soliciting, tabulating and publishing the vote results;
2 negotiating with the proponents to get them to withdraw the proposal; or
3 omitting the proposal, usually with SEC staff concurrence, on technical
grounds.
At first, the SEC concurred with corporate managers that all social issues
were inadmissible to the formal proxy process. The SEC took pains to prohibit
social issues from the shareholder proxy process when it formalized the ‘proper
subject’ test to exclude proposals designed to advance ‘general economic, politi-
cal, racial, religious, social or similar causes’ (federal regulation X-14a-8(c)(2),
cited in Emerson and Latcham, 1954:114). This exclusion dates at least from
1948, when Greyhound excluded the investor activist James Peck’s proposal to
desegregate its buses on ‘proper subject’ grounds. Instead, questioning senior
executives from the annual meeting floor was the occasional mode for raising
social topics: in 1941, Lewis Gilbert questioned the chairman of Standard Oil of
New Jersey about oil sales to Germany and Italy. That same year, he debated the
chief officer of Curtis Publishing about the isolationist editorial policy expressed
in The Saturday Evening Post (Gilbert, 1956). Even a 1964 proposal to General
Motors about ties to South Africa, a proposal allowed a decade later, was ruled
off limits by the SEC.
A major shift occurred in 1970. A federal lawsuit (the Medical Committee
decision) led to a revision of the ‘proper subject’ test. At Dow Chemical, the
Medical Committee for Human Rights, an anti-war investor group composed of
public-interest lawyers and health professionals, submitted a shareholder pro-
posal to limit the sale of napalm, which the US military used in Vietnam. The
proposal was submitted too late for inclusion in the 1968 meeting, and when
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resubmitted for 1969, the company omitted it as pertaining to an ‘improper’

subject for shareholder consideration. The SEC staff concurred with Dow, lead-
ing the Medical Committee to sue in federal court. The court supported the
Medical Committee’s position that shareholders should consider this and other
important social policy issues, leading the SEC to eventually reinterpret 14a-8
to allow social issues that raised important policy questions (Talner, 1983).
The revision of the ‘proper subject’ test created a political opportunity for
shareholder activists to make formal demands for corporate social responsibility.
Central to this new activism was the ideology of corporate and investor account-
ability to society (Sethi, 1977; Talner, 1983). These deliberations, part of a
broader search for moral social behavior in the ‘organizational society’ (Presthus,
1978), resulted in the founding of specialized organizations to confront or report
on the specific issue of investor responsibility for corporate actions. The advent
of activist corporate campaigns using the proxy process transformed the corpo-
rate agenda by forcing new issues into an old arena, debates in and around the
annual meeting (Alinsky, 1971).
Because of the important and complex social policy topics appearing on cor-
porate proxy voting cards and being debated at annual meetings, institutional
investors founded the non-profit organization, the Investor Responsibility
Research Center (IRRC) in 1972. By 1973, IRRC began to track systematically
all significant social policy shareholder proposals. In contrast to shareholder
proposal data from other sources, IRRC tracked all proposals, including those
that were withdrawn in negotiated settlements and those that were omitted for
technical reasons.

The emergence of a new agenda

While political opportunities can create room for new actors and claims, social
movement activists construct new agendas in response to perceptions of success,
opportunities, opposition and moral frames (Benford, 1993; Meyer and
Staggenborg, 1996). As applied to the field of shareholder activism, this view
suggests that rather than emerging as a natural outgrowth of fixed investor char-
acteristics or interests, the contours of a new agenda only become apparent over
many years as the cumulative result of collective framing, mobilization and
collaboration processes. In this section, we track the construction of this
new agenda.

Data

IRRC made available all social policy shareholder proposals it tracked routinely
between 1973 and 2003 for this study. We identified a handful of additional
proposals introduced before 1973 from a secondary historical source (Talner,
1983). We examined the data to identify the extent of shareholder activism
170 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

across the entire field of social issues. IRRC provided data on proposal year,
topic, sponsor and outcome. Table 1 displays a summary of the IRRC dataset in
five-year increments, depicting the number of proposals by topic.
While each major topic may illustrate its own agenda dynamics, we used
this initial sorting of the data to determine whether there was one particularly
visible and persistent activist agenda, so that we could then examine the role of
institutional investors in that campaign. This strategy is analogous to taking
the US civil rights movement as the context (and not all social movements),
and then examining the role of black churches in the civil rights struggle
(McAdam, 1982).1
The preponderance of social issues shareholder proposals, almost one in
three, dealt with the IRRC topic code, ‘International operations’ (see Table 1).
We decided to limit our analysis and findings to this issue. At the same time, it
is striking how thoroughly this topic dominates the social issues agenda over the
35 years of the sample period, accounting for 2158 of 6112 social issues pro-
posals. In the following sections, we analyze these proposals to first identify the
issues that defined what we refer to as the GSI agenda and then to examine
the role of various activists in shaping that agenda.

Defining the agenda

To look at trends in the types of issues shareholder activists raised in the GSI
arena, we first subdivided the IRRC data into its two subcomponents of ‘inter-
national labor rights’ and ‘international human rights’. Human rights deals
with ties to repressive regimes. The labor standards subcategory examines cor-
porations’ role as employers in other countries, with a concern in maintaining
higher standards of employment practice than those that may be required or
customary in various host countries. The two issues often coincide, as in situa-
tions where a repressive national government tolerates forced labor or child
labor, both of which violate international human rights laws as well as interna-
tional labor standards. Table 2 illustrates the trend between these two subcate-
gories by five-year periods.
The data show first an increase in the human rights category, which then
decreases, followed by an increase in the labor standards subcategory. We note
that the difference between the two categories is somewhat arbitrary, since many
proposals are motivated by human rights concerns associated with a country,
while proposals to companies invariably deal with some aspect of the company’s
operations, especially the way it treats workers in that problematic environment.
Nonetheless, a shift of this type, whether a difference due to coding or a sub-
stantive shift in framing, indicates a changing understanding about the nature
of the shareholder concern.
To look further at the dynamics of the particular issues that emerged on the
GSI agenda, we reclassified the proposals into subcategories. For example, pro-
posals on corporate operations in Haiti, Chile, Guatemala and Mexico were
Table 1 Shareholder proposals on social policy topics, 1973–2003 (5-year intervals)

P RO F F I T T & S P I C E R : S H A P I N G T H E S H A R E H O L D E R AC T I V I S M AG E N DA
International Energy/ Military/
Period operations Environment Health Employment Weapons All other Total

1973–8 215 45 20 51 23 243 597

1979–83 242 213 86 63 88 121 813
1984–8 495 102 29 42 72 82 822
1989–93 619 297 136 64 95 154 1365
1994–8 276 275 236 175 56 259 1277
1999–2003 311 332 158 160 57 220 1238
Total 2158 1264 665 555 391 1079 6112

Source: Investor Responsibility Research Center.

Notes
1. 1973–78 period includes six years, not five.
2. International Operations includes proposals IRRC subcategorized as ‘Human rights’ and ‘Labor’.
3. Health includes proposals IRRC subcategorized as ‘Abortion/Contraceptives’,‘Infant Formula’,‘Animals’,‘Health’, and ‘Healthcare’ as well as proposals on tobacco and food production
and marketing.
4. Employment includes proposals IRRC coded as ‘Labor (non-international)’ and ‘Equal employment opportunity’.
5. All other includes all other social issues proposals IRRC coded.These included categories for ‘Political contributions’,‘Charitable giving’,‘Banking and insurance’ and ‘Miscellaneous social
issues’, which included proposals on investing in poor and minority neighborhoods, broadcast standards, war toys and many other topics. No single one of these categories exceeded 390
proposals each.
6.These data omit a handful of resolutions submitted before 1973, including at least four GSI proposals described in Talner (1983) and one in Gilbert and Gilbert (1964).

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Table 2 Global social issues (GSI) proposals, 1969–2003 (5-year intervals)

Period Human rights Labor standards Total

1969–73 14 2 16
1974–8 198 6 204
1979–83 239 3 242
1984–8 448 47 495
1989–93 449 170 619
1994–8 94 182 276
1999–2003 79 232 311
Total 1520 642 2162

Sources: Investor Responsibility Research Center;Talner (1983)

combined into an ‘Americas’ category. Similarly, proposals about corporate ties

to China, Burma and South Korea were collapsed into an ‘Asia’ category. In
‘Other’ were diverse proposals about ties to Nigeria and Angola, and protecting
indigenous people’s rights. Table 3 presents the number of proposals by seven
major topic areas.
The data show that a country-specific focus is the norm for global corporate
social issues proposals through the mid-1990s. The earliest and longest-running
major issue was South Africa, from the first prescient proposal on record in 1964
to the last proposals in 1995. IRRC coded South Africa proposals as primarily
raising human rights issues: corporate ties to, or support for, a repressive regime.
Of course, corporate labor standards for operations there were also hotly debated.
The history of the Sullivan principles campaign can be described as a working
out of how corporations could remain responsible to South Africans while still
operating or doing business under apartheid.
Concerns about fair employment in Northern Ireland (290 proposals)
picked up as a proposal topic in the late 1980s and early 1990s, and remained

Table 3 Proposals for seven largest global social issues (GSI) campaigns, 1969–2003
(5-year intervals)

South Northern Middle Anti- General

Period Africa Ireland Americas East Asia Communist Other codes

1969–73 6 6 3
1974–8 64 4 107 23 6
1979–83 156 16 1 49 13 7
1984–8 428 41 7 5 5 9
1989–93 428 128 39 4 4 7 4 5
1994–8 27 67 62 1 35 3 15 66
1999–2003 54 3 1 43 16 194
Overall 1109 290 131 113 83 64 82 290

Note: Data omitted from cells when no proposals introduced during period.
Sources: Investor Responsibility Research Center;Talner (1983).
 P RO F F I T T & S P I C E R : S H A P I N G T H E S H A R E H O L D E R AC T I V I S M AG E N DA 173

strong with several dozen proposals a year by the end of the period. Some
regional campaigns never gathered the same sort of momentum as South Africa
or Northern Ireland. Formal shareholder proposals about the Middle East
appeared and disappeared suddenly (peaking with 107 proposals in 1976 and
1977 from the American Jewish Congress about the Arab boycott of Israel).
This absence is noteworthy considering the US occupation of Iraq, the invasion
of Afghanistan and near-saturation news coverage of the Middle East region
from 2001 to 2003. As is possible with any shareholder campaign, the issue
became more of a matter for US policy than for corporate policy. The number of
proposals in the ‘Americas’ category tapers off in the last period, with only one
proposal each in 2001 and 2003. Again, here, the development of the North
American Free Trade Agreement and US policies may have substituted for firm-
by-firm commitments to issues of corporate social responsibility for this region.
One of the most striking results of our analysis is the emergence of a gener-
alized solution to the problem of human rights and labor standards. As Table 3
illustrates, over the last decade of the sample period country and regional cam-
paigns appeared to merge into several global codes of conduct proposals. Instead
of lobbying for change in a designated country or region, these proposals
instead call for a general review of a corporation’s activity across all or many
countries in which a company does business. The ‘code solution’ to GSI concerns
is robust and increasing over time. Recently, activists have moved towards ask-
ing companies to develop, implement and report on general codes of vendor or
supplier conduct, or to address international labor standards. By the last period,
1999–2003, it was clearly the most vivid GSI campaign, almost four times the
size of any country-specific campaign.
The sheer volume of proposals generated about an issue is not the only mea-
sure of whether it is important as part of the GSI agenda. Another measure is
success. It is difficult to measure success from a social movement perspective
as the results of collective mobilization may only become discernible over years
or decades. Shareholder proposal success can indicate the degree to which a cam-
paign captures the attention of corporate managers and concerned investors.
While all shareholder proposals are advisory to management, even those with
low vote outcomes have the potential to stimulate problem-solving behavior,
collaboration, and policy change. They focus managerial attention publicly and
officially on the issue. Management crafts a response to each proposal they
oppose for printing in the proxy statement, and these management statements
of opposition serve as de facto policy positions. Thus, the shareholder proposal
process stimulates a policy response automatically, and at a high level of public
elaboration.
With this conception of success as focusing attention and creating debate in
mind, we identify two proposal-level measures of success: a relatively high vote,
and a negotiated withdrawal by its proponents. A proposal must receive 3 per-
cent of the shareholder vote in its first year for resubmission. The second year,
it must receive 6 percent. The third year and thereafter, a proposal must receive
174 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

10 percent of the vote (17 CFR 240.14a-8). We count this 10 percent threshold
as a success, regardless of how long it took for the proposal to attain it. Some
experts, for example, say that ‘any vote above 15 percent is considered high for a
social issues proposal (unlike corporate governance resolutions, which some-
times pass)’ (Mathiasen, 1999: 4). While one might debate between whether to
use 10 percent or 15 percent, the overall conclusions of our analysis are
unchanged regardless of which threshold is used.
A second measure of success is the voluntary withdrawal of a submitted
proposal by its sponsors. Usually the result of a negotiated settlement with man-
agement, a withdrawal can be viewed as a success in the sense that proponents
have been satisfied enough to take the step of withdrawing a proposal that
otherwise would come to a vote. IRRC reports that ‘the significance of annual
activity on shareholder resolutions invariably goes beyond the outcomes of the
proposals that come to votes; often the nature of withdrawal agreements reached
between shareholder proponents and their target companies tells at least equally
important stories about the year’s campaigns’ (Mathiasen, 1999: 5). Similarly,
the SEC writes that a ‘proposal may also influence management even if it is not
put to a shareholder vote. We understand that in some instances management
has made concessions to shareholders in return for the withdrawal of a proposal’
(21 May 1998, Amendments to Rules on Shareholder Proposals, File No.
S7–25–97). While we do not have details on withdrawal agreements (they are
usually kept private by both parties), withdrawal of a proposal is an indicator of
proponent satisfaction. Each measure – more than 10 percent of the votes cast
and the withdrawal of a proposal – indicates a way in which sponsors success-
fully caught the attention of other investors, corporate managers, or both.
Using these two measures, Table 4 depicts the success rate over time for the
major campaigns. Success rate was defined as the number of proposals that
received more than 10 percent of the vote or were withdrawn, divided by the
total number of proposals put forward in that period.
Successful campaigns build momentum over time, but reach a definite peak
once a critical mass has been attained. For instance, in the case of South Africa,
proposals and success rates increased from 25 percent from 1974 to 1983,
achieving a peak of 68 percent in 1989–93. After apartheid ended, the issue dis-
appeared completely. Northern Ireland proposals similarly enjoyed high success
rates, which steadily increased from 10 percent in its first five years (1984–8) to
84 percent in the latest period (1999–2003). The success rate for Northern
Ireland proposals increased, even as the campaign produced fewer and fewer pro-
posals, suggesting greater consensus on that issue.
While some campaigns end because they are successful, others end because
they fail or move into alternative venues. For example, early on, proposals about
corporate ties to the Middle East garnered 36.6 percent success, and proposals
about communist regimes attained 16.5 percent success, but the number of pro-
posals declined relatively quickly. Success is by no means automatic, and may be
dependent on the duration of a campaign and the political force of its sponsors,
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Table 4 Success rates for seven largest global social issues (GSI) campaigns, 1969–2003
(5-year intervals)

South Northern Middle Anti- General

Period Africa Ireland Americas East Asia Communist Other codes

1969–73 0.0 0.0 0.0

1974–8 21.0 16.7 36.6 19.0 20.0
1979–83 25.4 17.0 0.0 16.5 21.7 25.0
1984–8 60.7 9.7 25.0 0.0 0.0 0.0
1989–93 68.7 57.6 68.6 0.0 75.0 0.0 66.7 50.0
1994–8 56.4 80.1 36.5 0.0 25.1 0.0 12.5 49.2
1999–2003 83.6 33.3 0.0 25.1 35.0 41.7
Overall 59.3 60.3 52.7 36.3 28.9 12.5 23.2 38.3

Note: Data omitted from cells when no proposals introduced during period. Numbers represent percent
of proposals during 5-year period that either received more than 10% votes at annual meetings or were
withdrawn through negotiation between corporations and investors.
Sources: Investor Responsibility Research Center;Talner (1983).

as well as its relevance to and popularity in the broader society. Proposals that
consistently get high votes, or that occasion negotiated withdrawals, provide a
signal that activists have garnered the attention of managers. Over time, the
data show that a powerful factor in predicting the success of any individual
proposal is the degree of success that similar proposals on that topic have
already received.
Not all issues remained on the agenda for the same amount of time or
received the same amount of success. South Africa proposals remained on the
agenda for more than 25 years, with an overall average of 59 percent success.
Proposals about the Americas and Asia have had high success rates during some
periods. Least successful were the anti-Communism proposals about forced labor
in the Soviet Union and China. Indeed, except for the period 1979–83, no pro-
posals in this category were successful. And while the Middle East proposals
have had a high average success rate, the short-lived Arab boycott pro-
posals account for all of this success.
Another way success varies is through expansion in the number of com-
panies receiving proposals on a particular issue. This can dramatically affect
the success rates. For example, Asia proposals earned 75 percent success in the
period 1989–93, but there were only four of them. In the subsequent decade,
the campaign expanded dramatically with more successful proposals in absolute
terms, but with lower rates of success. Similarly, the general codes of conduct
proposals experienced generally increased success over their lifetime, peaking at
about 50 percent for five proposals in the period 1989–93. But a dramatic
expansion in the number of such proposals lowered the success rate slightly, even
though the absolute success total goes up substantially. During the period
1994–8, 66 general code proposals earned 49.2 percent success, increasing to
194 with 42 percent successful in the 1999–2003 period. So, while the success
176 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

rates decreased, the number of companies and absolute number of successes

increased. Used together, number of proposals and success rates over time can
indicate relative overall campaign success.

Time frames and agenda construction

A unique feature of our database is that it encompasses the full life cycle of the
GSI agenda in this arena. We start at the political opening of a new agenda and
then look at its subsequent development over the next three decades. Our
agenda-focused strategy differs from existing research into shareholder activism.
Corporate governance researchers have tried to pick up effects of shareholder
governance in the immediate responses of markets and firms (see Wahal, 1996,
for a summary and empirical test). Others have expanded this analysis by focus-
ing on the unique decade starting in 1985 when some institutional investors
grew more involved in shareholder activism on corporate governance issues
(Useem, 1993; Davis and Thompson, 1994).
In contrast to this early work, we suggest the time in which campaigns
develop is probably on the scale of decades, not single years. Our finding of the
recent dominance of global codes provides an important illustration of the slow
construction of shareholder activist agendas. Table 5 lists representative pro-
posals falling into the ‘General code of conduct’ category for both human rights
and labor standards issues, along with a cursory assessment of their prevalence
by decade.
These representative proposals exemplify the types of general codes
requested, and the typical sponsor and outcome. General codes of conduct for
international operations have been proposed since the early 1970s. However, it
is only in the last decade that general codes have become the most prevalent
type of GSI proposal put forward by shareholder activists.
Clearly this historical development built on decades of code development
programs for individual countries. Numerous country-specific and regional
human rights campaigns laid the groundwork for generalizing to all global
workplaces through codes of conduct beginning in the 1990s. For example, the
Sullivan principles for companies operating in South Africa provided a template
for the MacBride principles for ensuring fair employment practices in Northern
Ireland, and now for the global Sullivan principles that companies can sign
governing all their international operations. Increasingly, general code proposals
reference labor standards put forth by international organizations, such as the
United Nations International Labor Organization (see also Kolk and van Tulder,
2002, for a description of this evolution.)
One implication of this finding is that sponsors who seek to influence
agendas realistically must commit for the long term. The impact of a single
investor introducing a single proposal to change a single company to get a boost
in stock price or operating performance, as researchers often model shareholder
activism’s effects, does not pick up the longer term patterns identified in our
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Table 5 Representative general codes of conduct for global social issues (GSI), (by
decade)

Period Topic Representative proposal Prevalence

1970s Human 1971 proposal from Presbyterian church to Gulf Oil, Rare
rights asking to amend the corporate charter to avoid
investment in colonial countries, won about 3% of vote
Labor 1978 church group proposal at Castle & Cooke, about Rare
rights labor practices overseas, won 3% of vote
1980s Human 1985 church sponsored proposal at Control Data, asking Occasional
rights for a review of review human rights policy and computer
use, won 4.75% of vote
Labor 1984 individual proposal at American Motors requesting a Rare
standards policy against the use of slave labor, won 2% of vote
1990s Human 1995 church-sponsored proposal at Unocal requesting Frequent
rights adoption of global human rights code, won 6.4% of vote
Labor 1997 proposal to Disney to review and report on More frequent
standards supplier labor standards, sponsored by socially responsible
investment firms and churches, won 8.5% of vote
2000s Human 2003 church-sponsored proposal at Boeing requesting Occasional
rights adoption of a comprehensive human rights policy, won
26% of vote
Labor 2002 proposal at American Eagle Outfitters requesting Very frequent
standards implementation of the International Labor Organization
(ILO) standards and third-party monitoring, sponsored by
the New York City pension funds, won 9% of vote

sample. Change may take place, but, as a social movement perspective suggests,
discernable effects may only become apparent over the long run.

Shaping the agenda

We now turn from the issues that defined the GSI agenda to the types of
activists that shaped it. To orient our analysis, we coded each sponsor into one
of nine mutually exclusive categories. The sponsor categories were:
1 religious groups and churches;
2 public pension funds;
3 individuals;
4 TIAA-CREF (the largest private pension fund);
5 labor unions;
6 socially responsible investment companies;
7 activist groups and foundations;
8 socially responsible mutual funds;
9 universities or student groups.
178 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

Only a handful of sponsors could not be grouped into one of these cate-
gories: the sponsors of six proposals were either missing or not identifiable, and
were coded as ‘unknown’. Because co-sponsorship is commonplace, more spon-
sorships exist in the database than actual proposals. Table 6 subdivides overall
proposals by type of sponsor in five-year increments.
Focusing on who sponsors international operations proposals, the vast
majority of the 2158 GSI proposals include a religious sponsor or co-sponsor
(1312). Public pension funds accounted for the second largest number of spon-
sorships (864). Finishing much lower in total sponsorships were individuals
(107), TIAA-CREF (88), labor unions (81), socially responsible investment
firms (61), and activist groups or foundations (50), among others. From this dis-
tribution, it is clear that the movement depends significantly on religious
groups and public pension funds, with other categories providing a supporting
role.
To further examine the relationship between religious groups and pension
funds, we examine in Table 7 the proposals they introduced across seven major
topics. The sequencing of activism in-campaign demonstrates a division of labor
between these two types of actors. Religious activists are almost always the
innovators for a topic category, generating proposals before public pension
funds. Then, pension funds enter as sponsors or co-sponsors, and add volume
and success to the campaign. A close examination of the data by year reveals that
religious organizations were the innovators on every topic on which public pen-
sion funds later presented proposals. Even on the issue of Northern Ireland,
where entry appears to be simultaneous, religious organizations introduced the
four first proposals on this issue in 1985, a year before public pension funds
joined in.
To extend the analysis of the division of labor between religious organiza-
tions and pensions funds in the development of a GSI agenda, we examine the
relationship between success rates and sponsor types. Table 8 breaks out the
success of GSI proposals by sponsor type. Between 1974 and 1978, religious
organizations sponsored 186 proposals on international human rights issues.
According to Table 8, only one received greater than 10 percent of the vote
and 53 were withdrawn. This gives religious sponsors an overall success rate of
29 percent in the early period. In contrast, during the period 1984–8, reli-
gious organizations introduced 298 proposals on the same topic. Of these pro-
posals, 93 received more than 10 percent of the vote and 63 were withdrawn,
giving them an overall success rate of 54 percent in those years. From
1989–93, this category of sponsors had a success rate of 71 percent. The
increasing success rate correlates with persistence of the South Africa cam-
paign over many years and the entry of public pension funds into the process
beginning in the mid-1980s.
Although they enter later, pension funds play an important champion role.
In the literature on organizational entrepreneurship (Day, 1994; Venkataraman
et al., 1992), innovators are the individuals that come up with and package new
 P RO F F I T T & S P I C E R : S H A P I N G T H E S H A R E H O L D E R AC T I V I S M AG E N DA
Table 6 Global social issues (GSI) proposals by Sponsor Type, 1969–2003 (5-year intervals)

Public Activist SR Universities

Sponsor Religious pension Labor groups and mutual or student
type groups funds Individuals TIAA-CREF unions SRI firms foundations funds groups Unknown

Period HR LS HR LS HR LS HR LS HR LS HR LS HR LS HR LS HR LS HR LS
❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚
1969–73 13 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
1974–8 186 6 0 0 0 0 0 0 0 0 1 0 0 0 0 0 13 0 0 0
1979–83 187 3 5 0 19 0 0 0 0 0 0 0 26 0 0 0 12 0 1 0
1984–8 259 31 282 34 8 0 52 0 2 0 0 0 8 0 0 0 7 0 4 0
1989–93 298 56 219 122 15 0 36 0 2 3 0 1 2 0 0 0 0 0 1 0
1994-–8 70 100 0 70 13 6 0 0 7 27 13 7 2 1 2 7 4 0 0 0
1999–2003 18 83 1 131 18 25 0 0 6 24 36 3 5 6 8 29 2 0 0 0
Total 1031 281 507 357 73 31 88 0 17 54 50 11 43 7 10 36 38 0 6 0

Sources: Investor Responsibility Research Center;Talner (1983).

179
 180
S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )
Table 7 Degree of involvement in global social issues (GSI) campaigns by public pension funds (P) and religious investors (R), 1969–2003 (5-year intervals)

Campaign Anti-
Topic South Africa Northern Ireland Americas Middle East Asia communist Other General Codes

Period P R T P R T P R T P R T R T R T R T P R T
❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚
1969–73 6 6 6 6 3 3
1974–8 52 64 4 4 107 107 23 23 6 6
1979–83 3 140 156 16 16 1 22 49 8 13 4 7
1984–8 282 249 428 34 25 41 7 7 2 5 3 5 4 9
1989–93 218 293 428 122 15 128 38 39 1 1 4 2 4 7 1 4 4 5
1994–8 27 27 65 21 67 2 46 62 1 1 29 35 3 9 15 2 37 66
1999–2003 54 14 54 1 3 1 2 43 9 16 77 75 194
Overall 503 767 1109 275 75 290 2 112 131 1 109 113 33 83 24 64 59 82 79 133 290

Note: Zeros omitted for readability. P=public pension fund, R=religious group,T=total proposals by all sponsors.
Sources: Investor Responsibility Research Center;Talner (1983).
Table 8 Successful global social issues proposals by pponsor type, 1974–2003 (5-year intervals)

P RO F F I T T & S P I C E R : S H A P I N G T H E S H A R E H O L D E R AC T I V I S M AG E N DA
Public Activist Universities/
Sponsor Religious pension Labor groups/ SR mutual student
type groups funds Individuals TIAA-CREF unions SRI firms foundations funds groups

Period >10% W >10% W >10% W >10% W >10% W >10% W >10% W >10% W >10% W
❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚
1974–8 1 53 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 10
1979–83 15 53 1 0 0 1 0 0 0 0 0 0 0 1 0 0 0 4
1984–8 139 61 174 91 1 0 30 18 0 1 0 0 0 0 0 0 3 1
1989–93 128 97 128 52 5 0 16 1 1 8 0 3 0 0 0 0 0 0
1994–8 16 46 20 27 2 0 0 0 1 13 1 1 0 1 0 3 0 1
1999–2003 15 35 35 38 7 3 0 0 8 8 2 11 0 3 3 13 0 0
Total successes 311 339 352 202 13 4 46 19 10 28 3 15 0 5 3 16 4 16
Success rate (%) 23.7 25.8 40.7 23.0 12.5 3.8 52.3 22.0 16.4 45.9 4.2 21.0 0 10.0 7.9 42.0 8.7 35.0

Notes: >10% = Proposal received more than 10% of the votes cast.
W = Proposal withdrawn by sponsors as part of a negotiated agreement.
No GSI proposals were successful by our measure before 1974.
Sources: Investor Responsibility Research Center;Talner (1983).

181
182 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

ideas. Champions are the individuals that help innovators navigate the
socio-political environment of the corporation to attract attention and resources.
Public pension funds play a similar champion role in assisting innovating reli-
gious groups to gain clout with other investors and management. Their entry
corresponds with higher levels of success, particularly vote success. On the topic
of South Africa, for example, public pension funds are major sponsors or co-
sponsors from 1984 to 1993, the period of greatest vote success. Similarly, the
success rates for Northern Ireland began to increase with the involvement of
public pension funds from 1986 onwards. On some issues with lower average
success, pension funds have not been involved much or at all. This is true in pro-
posals about the Americas, the Middle East and Asia, and the anti-Communism
proposals.
While our analysis cannot differentiate between public pension funds caus-
ing the success, or merely entering the arena because they forecast that the issue
has or would shortly become successful, prior research demonstrates that compa-
nies do pay more attention to public pension funds (Davis and Thompson,
1994). Accordingly, those issues that attract public pension funds as co-sponsors
tend to do better and garner more corporate attention. Public pensions have
been active generating large numbers of proposals on only three of the seven
major campaigns: South Africa (10 years), Northern Ireland (20 years) and
General Codes (5 years). In addition, they tend to support no more than two
major campaigns at a time with large numbers of proposals.
The general code campaign illustrates a new heterogeneity in sponsor types
not seen in prior issues. Table 9 depicts the major sponsors of general code
proposals.
In Table 9, it is clear that religious groups have escalated their involvement
in this campaign over the last decade, from 37 proposals in 1994–8 to 75 in
1999–2003. A further examination of the general codes sponsorship pattern,
however, reveals another interesting shift. While public pension funds are a
major sponsor in the last period, other types of sponsors have also entered the
arena, some relatively new players in shareholder activism. Sponsor type diver-
sity is highest on this issue than on any other in the study. For instance, socially
responsible mutual funds were late-movers in proposal activity on global social
issues, introducing only 46 proposals across all topics. Table 9 demonstrates that
the vast majority (38) of those proposals were on the topic of general labor stan-
dards. In addition, individuals, labor unions, socially responsible investment
firms, and activist groups all enter as major players on this issue in the
last decade.
To summarize our findings, the data suggest that religious organizations
have played a critical role in fulfilling an innovator function in the development
of a new agenda. Social movement organizations generate new campaign ideas,
frame them in relation to dominant themes in society and build coalitions, and
religious groups took up this work for the long term on GSI. It is interesting to
note that in contrast to predictions by business around 1970, shareholder
 P RO F F I T T & S P I C E R : S H A P I N G T H E S H A R E H O L D E R AC T I V I S M AG E N DA 183

Table 9 Major sponsors of general codes of conduct for global social issues (GSI),
1969–2003 (5-year intervals)

Public Activist SR
Religious pension Labor SRI groups and mutual
Period groups funds Individuals unions firms foundations funds

1969–73 3
1974–8 6
1979–83 4 1
1984–8 4 2 5
1989–93 4 1
1994–8 37 2 12 15 8 1 5
1999–2003 75 77 28 24 9 9 33
Overall 133 79 43 39 18 15 38

Note: Major sponsor categories include those producing more than 10 proposal sponsorships overall.
University and student groups submitted two proposals, and one sponsor was not identifiable.
Sources: Investor Responsibility Research Center;Talner (1983).

activism did not degenerate into a free-for-all of random claims (Emerson and
Latcham, 1954; Talner, 1983). Instead, it evolved into a fairly narrow set of reg-
ular claims revolving around ever more generalized campaigns. Religious
groups proceeded in an orderly and disciplined manner over many decades.

Explaining religious organizations’ activism

What explains the persistence of religious organizations in our sample? Existing

theories most often propose financial motives for investor activists. Research in
finance based on agency theory supposes a value creating benefit from increased
investor monitoring, exemplified by shareholder activism. But many studies of
pension fund activism and corporate governance proxy proposals find no mean-
ingful financial return to investor activism as monitoring behavior (see Karpoff,
et al., 1996; Wahal, 1996). A second argument suggests a symbolic effect of
shareholder proposals – investors signal to managers that they are paying atten-
tion (Black, 1992). In this view, it is still the funds with larger, more diversified
equity portfolios who are predicted to become activists. The largest pension
funds with the widest scope of activity and the longest investment horizons are
most likely to invest resources in activism with the expectation of a financial
return (Ryan and Schneider, 2002). Yet if only the richest and most profession-
ally run engage in shareholder proposals, why then have religious organizations
been the most prolific activists in our database? Most religious organizations
have nowhere near the financial asset base or professional staff of public
pension systems.
We suggest that a social movement approach to shareholder activism best
explains these findings. In essence, social movement outcomes are mainly col-
184 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

lective. This view, first articulated in the field of shareholder activism by Davis
and Thompson (1994), has yet to sufficiently inform research on this area. But
this perspective is the one that best fits the empirics: as a social movement, reli-
gious organizations, and perhaps all activist investors, are trying to mobilize
ideas, sentiments and collective resources to advance moral claims and agendas.
Despite their lack of a discernible financial stake in the outcome and the fact
that their proposals rarely gain majority votes, religious organizations have
taken a patient and collaborative approach to shareholder activism in order to
shape public discourse on global social issues over the long run.
The organizing strategies of religious organizations illustrate a social move-
ment approach to shareholder activism. Their entry into the field once the
proper subject test was eliminated was marked by moral dialogue and deliberate
organization to generate large numbers of proposals routinely and over the long
run. Mainstream Christian church groups came to see shareholder proposals as a
natural outgrowth of their mission to work for social good (Talner, 1983). In
1971, six Protestant denominations formed the Interfaith Committee on Social
Responsibility, which would eventually become the Interfaith Center on
Corporate Responsibility (ICCR) (Talner, 1983). ICCR coordinated activism by
religious organizations with stock investments – convents, monasteries, reli-
gious health care institutions, religious schools, etc. – all of which had retire-
ment money for their members in the stock market. While some large religious
groups sponsored proposals on their own (e.g. the Evangelical Lutheran Church
of America), they simultaneously worked in consultation with ICCR. ICCR, in
turn, helped dozens and later hundreds of smaller religious organizations (e.g.
the Sisters of Loretto of Kentucky, a Catholic social justice mission) to produce
and co-sponsor proposals on social topics.
As a contrasting case, universities and foundations also responded to the
opening of a new agenda for social issues, but not as proposal sponsors. In
1971 and 1972, Harvard, Yale and the Ford Foundation conducted official
university inquiries into the moral obligations of institutional equity owner-
ship (Talner, 1983). In 1971 two Princeton economists weighed in on the
question of whether investors should use the proxy to pursue socially desirable
goals (Malkiel and Quandt, 1971). Pressing views for corporate change
through available channels might be more effective, the authors argued, than
simply selling the stock of an objectionable company. Between 1970 and
1975, high-profile organizations such as churches, universities, and founda-
tions revised their institutional missions to include the substantive scrutiny
and use of the proxy process for their stock holdings (Simon et al., 1972).
However, in contrast to the religious community’s quick routinization and
expansion of shareholder proposal sponsorship activity, most institutional
investors let churches and activist groups introduce the proposals while they
debated their votes internally.
Our findings do not contradict theory that identifies an important role for
public pension funds in pushing for new corporate agendas since the mid-
 P RO F F I T T & S P I C E R : S H A P I N G T H E S H A R E H O L D E R AC T I V I S M AG E N DA 185

1980s. Instead, our argument extends and situates it. Other organizations, espe-
cially religious ones, were the innovators that developed and framed the moral
principles at stake that preceded the entry of public pension funds. Public
pension funds have played a complementary role in agenda-creation by cham-
pioning the issues brought forth by religious innovators.

Discussion

In the social movements of society, activist campaigns are oriented not only
towards the state, but also towards other major institutions, like large corpora-
tions (Meyer and Tarrow, 1998). When it comes to organized investor activism,
most theoretical statements emphasize the importance of regulatory changes,
resource shifts and large investors with long-term investment horizons making
accountability claims on corporate managers (Useem, 1993; Davis and
Thompson, 1994; Ryan and Schneider, 2002). Our analysis emphasizes a dif-
ferent set of dynamics: unexpected innovators, coalitions, framing and re-
framing, and varieties of collective success over long periods of time. We found
that over a series of campaigns in the social issues domain, an innovator-
champion dynamic led to a series of apparent successes. Second, the agenda came
to be less about specific outrages and more about ensuring generalized account-
ability. Third, the success metric moved from an emphasis on the vote to a com-
bination of vote and negotiation outcomes.
Analyzing in greater detail the who and why in investor activism is impor-
tant given the presumptions of prior theory and research, as well as ongoing
debates in society about how to create corporate accountability. Prevailing the-
ories emphasize the strictly financial calculus that an investor activist might use
to decide whether to engage in a shareholder campaign. Only those with large
stakes and a long-term horizon will engage the proxy process, otherwise it is too
expensive to use (Ryan and Schneider, 2002). This has been translated into the
imagery that large public pension funds will spearhead the important share-
holder campaigns, and that in turn, the important campaigns will be those that
feature public pension funds as prominent sponsors. Lost from this account is
the concept that moral claims also enter into activist motivation.
In contrast, our findings suggest that activism can be as much influenced
by moral concerns as by financial interests. Financial returns and assets under
management may have little to do with the degree of activism exhibited by vari-
ous activist investor groups. Instead, moral beliefs about what is right and
wrong are strongly reflected in the large numbers of proposals introduced on
social policy issues, and co-sponsored by public pension funds. One implication
is that financial motivations may be subsidiary to moral motivations. In other
words, rather than corporate governance activism being different in kind from
social issues activism, perhaps both result from core beliefs in society about what
is morally desirable in corporate management (Proffitt, 2001; Marens, 2002).
186 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

The financial stakes could, for example, serve as a recruiting ploy made by
longer-term activists (individuals and religious groups) to provide ideological
cover for their more recent allies (state pension funds, TIAA-CREF, labor
unions). Whatever the mechanism, the restoration of meaning and moral
authority to studies of investor activism is one important avenue for
future research.
Our findings also suggest that researchers should consider expanding sam-
pling frames. In the social issues domain, it took 35 years of persistence to pro-
duce the discernible coalition-building and framing process documented here. If
a similarly ambitious time frame is adopted for research on corporate gover-
nance, a new picture may emerge in that area as well. The ‘pension fund revolu-
tion’, as it was described by Drucker (1976), can be situated in a 60-year
struggle initiated and sustained for many years by determined, wealthy indivi-
duals and expanding since to include labor and religious groups (Proffitt, 2001;
Marens, 2002). Recent observable successes came on the heels of and capitalized
on a pre-existing movement.
It is noteworthy that so much attention is paid to the motives of public
pension funds in managerial research when fewer than a dozen such funds ever
use the shareholder proposal process. In contrast, the roles of hundreds of indi-
viduals and churches that built and shaped the activist agenda are relatively
undertheorized. So at a minimum, an expanded sampling frame that emphasizes
the content of the mobilization process, rather than the appearance of the most
vivid participants, is an important avenue for future research.
One corollary to this expanded frame is the rediscovery of a tight linkage
among actors in an evolving coalition, and between coalitions and possible fram-
ings of the movement over time. Prior research emphasizing corporate gover-
nance tends to treat all proposals as cut from the same cloth, the oft-used term
‘anti-management proposals’ embodies this combat imagery. But the social
issues evidence here shows that proposals and proponents are linked over time in
dynamic configurations. Coalitions of two, three or more types of investor
activists work together first on country campaigns, regional campaigns and,
eventually, a growing general code campaign. The reapplication of this approach
to corporate governance may result in a different version of that activism story,
one that includes nuances of how pension funds were recruited and enticed to
introduce proposals that had been introduced by other types of investors before
them, but with a different framing and a different effect.
This study did not systematically examine the consequences of shareholder
pressure on subsequent firm-level activity. Instead, it focused on the way in
which shareholder activism produces and shapes an agenda for strategic discus-
sion. In other words, we examined the creation of the stimuli that attract firm
attention to social issues, instead of looking at individual firm responses to these
topics (Margolis and Walsh, 2003). One implication of our findings is that we
expect that corporate reactions to individual proposals will change depending
on the degree of maturity of the broader campaign. Historical context, as well as
 P RO F F I T T & S P I C E R : S H A P I N G T H E S H A R E H O L D E R AC T I V I S M AG E N DA 187

firm characteristics, should matter in understanding corporate responses to

shareholder activism.
More fundamentally, the results of this study raise questions of what level of
analysis success should be measured. Success does not have to be defined in
terms of particular proposals. Success can also be defined from the perspective of
activist organizations working together to shape collective agendas. For
instance, the sheer organizational capability to introduce proposals over long
periods of time could be conceived as one form of success. The ability to gener-
alize and include multiple campaigns under a new, more resonant frame could
be another. In other words, conceptualizing the goals of social movement orga-
nizing processes goes beyond whether an individual proposal wins a vote at a
given company in a given year. Examining the collective outcomes of actors and
issues over time using a variety of metrics for influence is another important area
for future research.
Shareholder mobilization around global social issues represents an important
and wide-ranging case to analyze the dynamics of interconnected shareholder
campaigns over an extended period of time. Global social issues have been a per-
sistent concern of investors in multinational companies because these topics often
remain outside the jurisdiction of national legal systems. Given the limitations of
law in regulating corporate behavior across national boundaries, extra-regulatory
mechanisms like the shareholder proposal process are particularly important in
bringing GSI concerns to the attention of corporate managers.
There is some evidence that the major shareholder campaigns during the
1970s and 1980s, especially those dealing with businesses in South Africa and
Northern Ireland, eventually influenced the behavior of multinational firms
with ties to those countries. Many corporations ended various locally tolerated
forms of discrimination, relocated facilities, ended business ties, or substantially
changed business operations in response to the collective pressure of shareholder
and other activist campaigns (Cooper, 1989; Auditor General of California,
1990; Donfried, 1996). In contrast, the consequences for firm behavior from the
relatively newer social issues topic of global corporate social issues are still
emerging (Varley et al., 1998; Jenkins et al., 2002). The general code campaigns
are in full force and our data demonstrate that a wide array of institutional
investors has pushed strongly for a corporate engagement about this issue. It
remains to be seen, however, what success this relatively young movement will
ultimately achieve in influencing substantive firm behavior.

Note

1 This approach differs from most research on corporate governance, which begins with the
selection of actors first (public pension funds), and then studies their influence on firms. We
are interested in the development of the GSI agenda itself, so we start there regardless of
whether public pension funds are present.
188 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

Acknowledgement

The authors would like to thank Diana Zahn for her work.

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W.Trexler Proffitt, Jr is an assistant professor of Organization Studies in the Department

of Business, Organizations and Society at Franklin & Marshall College. He teaches classes
190 S T R AT E G I C O R G A N I Z AT I O N 4 ( 2 )

focusing on organizational strategy, corporate social responsibility and conflict resolution. His
research emphasizes the institutional and social environment of business. In particular, he
specializes in the role of ideology and ideas in the study of social conflict at the intersection
of business and society. Address: Franklin & Marshall College, PO Box 3003, Lancaster, PA
17604, USA. [email: trexler.proffitt@fandm.edu]

Andrew Spicer is an assistant professor in the Sonoco International Business Department

at the Moore School of Business, University of South Carolina. His research and teaching
focuses on the impact of globalization on nations, organizations and individuals. He has stud-
ied privatization, financial market development, corporate restructuring and ethical decision-
making in the context of economic reform in post-communist societies. Address: Moore
School of Business, 1705 College St, University of South Carolina, Columbia, SC 29208, USA.
[email: aspicer@moore.sc.edu]