Ethical Behavior and Investor’s Responsibility

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In a recent speech made at the World Economic Forum in Davos, UK Prime Minister Theresa May urged investors and shareholders to use their influence to improve the ethical business practices and corporate social responsibility among companies.

It is rather unprecedented for a world leader to call for shareholder activism at one of the biggest global forums, the fact that she called out to the investors to increase pressure on their companies to encourage them to act responsibly and ethically, makes this doubly important to follow through.

In her speech, Britain’s Prime Minister specifically addressed Internet Technology companies such as Facebook, Twitter etc. about the incidences of online platforms being used to facilitate child abuse, modern slavery and in spreading literature that promotes extremism and terror. She believed that Investors of these companies must ensure that that they become instruments of change.

She reiterated, “Investors can make a big difference here by ensuring trust and safety issues are being properly considered,” she said. “I urge them to do so.”

Ethical Business Behavior and Investors

The UK Prime Minister’s assertions about Investors positive influence points us towards a trend that is shaping up all over the world. Case in point would be prime investors such as Arjuna Capital and New York State Common Retirement Fund who filed a shareholder resolution demanding better restrictions, rules and regulations to clamp down online sexual harassment, fake news, election influencing & interference and spreading violence and intolerance.

Internet and social media have become a viable platform where opinions and trends are formed within a blink of an eye. The brand value of one’s company is measured by its ethical business practices and socially responsible behavior. Shareholders of many companies are not shying away from taking legal action against these firms for unethical and irresponsible behavior because it adversely affects their social standing and reputation as well. Recently Brazil’s state oil company Petrobras, settled $2.95 billion to settle a class action suit brought by their own US-based investors. This was in addition to the payments that were made to settle bribery allegations with government regulators and to cover the drop in the company’s share price.

This is a positive trend that would give the consumers more impetus to assert their choice and choose brands and companies that behave ethically and responsibly. With the Shareholders jumping in, the focus on environmental sustainability, modern slavery and corruption are more intense and it will inevitably induce them to become more accountable to the society.

Commenting on this trend, Suzanne Fallender, Director of Corporate Responsibility at Intel said that Companies are using their own role as consumers to drive ethical improvements in global supply chains. They are in turn turning more transparent by the day and are choosing suppliers who are more cautious about the environment.  Many companies are now collaborating together to tackle industry-wide challenges such as child-trafficking, water conservation and sustainable energy as a part of their corporate social responsibility.

Many believe that this is a trend that’s here to stay and companies certainly need to remain at the top of their game if they wish to build trust with their investors, shareholders and consumers. With the help of LexisNexis, you can get great insights into your target audience’s expectations, beliefs and wishes. Find out how?