Company Receptivity in Private Dialogue on Sustainability Risks

Natalia Semenova
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Natalia Semenova: School of Business and Economics, Linnaeus University, 351 95 Växjö, Sweden

Sustainability, 2020, vol. 12, issue 2, 1-14

Abstract: This study examines empirically the efficiency of private collaborative dialogues between Nordic institutional investors and companies included in the MSCI (Morgan Stanley Capital International) World stock market index. It contributes to an understanding of the conditions that allow active institutional investors to elect to work with more receptive and progressive companies and improve the efficiency of private engagement and dialogue. Stakeholder silence theory and Gond et al.’s model of company perceptions of enablers and barriers to the success of engagement are introduced to analyse the efficiency of private dialogue. The study investigates a proprietary dataset covering the characteristics of 109 complete dialogue processes related to material environmental, social, and corruption issues. The dialogues are led by a professional engagement agent in collaboration with its Nordic clients. The multivariate regression analysis shows that sustainability risk, bureaucracy, and experience are the specific conditions under which the target company can become more receptive to activism by making more progress to address institutional investors’ requests during the hidden dialogue process.

Keywords: sustainability risks; investor activism; private dialogue; engagement; efficiency (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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