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Can Strategic Investing Transform the Corporation?

Southern Illinois University Edwardsville, USA, lmarkow{at}siue.edu

The purpose of this article is to critique the main claim of the socially responsible (SR) investment industry: that through strategic investing investors can transform corporate power. I argue that businesses often respond to the demand by investors for short-term economic growth by making choices that run counter to the interests of corporate social responsibility; they reduce labor and material costs in ways that disrupt workers, communities and the environment. I demonstrate my theoretical claims using data from the 10 most common stocks selected by SR mutual funds. I call these stocks the SR Big Ten. A simple roll call of the SR Big Ten, as well as a thorough examination of each stock within it, reveals how problematic it is for individuals to rely on investments to transform the corporate world.

Key Words: corporate power • socially responsible investing • social screening • strategic investing

Critical Sociology, Vol. 34, No. 5, 681-707 (2008)
DOI: 10.1177/0896920508093363


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