Hostname: page-component-745bb68f8f-hvd4g Total loading time: 0 Render date: 2025-02-07T15:08:17.312Z Has data issue: false hasContentIssue false
  • English
  • Français

The Contingent Role of Conflict: Deliberative Interaction and Disagreement in Shareholder Engagement

Published online by Cambridge University Press:  10 February 2022

Irene Beccarini ,
Daniel Beunza ,
Fabrizio Ferraro Open the ORCID record for Fabrizio Ferraro [Opens in a new window]  and
Andreas G. F. Hoepner
Irene Beccarini
Affiliation:
Pôle Universitaire Léonard de Vinci
Daniel Beunza
Affiliation:
City, University of London
Fabrizio Ferraro
Affiliation:
Universidad de Navarra
Andreas G. F. Hoepner
Affiliation:
University College Dublin; European Commission Platform on Sustainable Finance
Get access Rights & Permissions [Opens in a new window]

Abstract

How is the tension between conflict and deliberation resolved in shareholder engagement? We address this question by studying shareholder engagement as a deliberative process with three stages: establishing dialogue, solution development, and solution implementation. We theorize that two interactionist mechanisms, deliberative interaction and the voicing of disagreement, play different roles at different stages of the process. We test our hypotheses with a proprietary database of 169 environmental, social, and governance engagements with US public companies over 2007–12. We find that while deliberative interaction does not help advance the engagement process, it positively moderates the effect of disagreement in the solution development stage. By contrast, in the solution implementation stage, deliberative interaction amplifies the negative effect of disagreement, thus hindering progress in the engagement. Our article contributes to shareholder engagement, deliberation theory, and interactionist organization theory by establishing that engagement effectiveness is an interactional achievement shaped by both deliberation and disagreement.

Keywords

shareholder engagementresponsible investingcorporate governancedeliberative democracysymbolic interactionism
Type
Article
Information
Business Ethics Quarterly , Volume 33 , Issue 1 , January 2023 , pp. 26 - 66
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Society for Business Ethics

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Allen, R., Letourneau, H., & Hebb, T. 2012. Shareholder engagement in the extractive sector. Journal of Sustainable Finance and Investment, 2(1): 3–25.Google Scholar
Ansell, C., & Gash, A. 2008. Collaborative governance in theory and practice. Journal of Public Administration Research and Theory, 18(4): 543–71.CrossRefGoogle Scholar
Arenas, D., Albareda, L., & Goodman, J. 2020. Contestation in multi-stakeholder initiatives: Enhancing the democratic quality of transnational governance. Business Ethics Quarterly, 30(2): 169–99.CrossRefGoogle Scholar
Aristotle. 1984. The politics. Chicago: University of Chicago Press.Google Scholar
Baccaro, L., Bächtiger, A., & Deville, M. 2014. Small differences that matter: The impact of discussion modalities on deliberative outcomes. British Journal of Political Science, 46(3): 551–66.CrossRefGoogle Scholar
Bächtiger, A., Dryzek, J. S., Mansbridge, J., & Warren, M. E. 2018. Deliberative democracy: An introduction. In Bächtiger, A., Dryzek, J. S., Mansbridge, J., & Warren, M. E. (Eds.), The Oxford handbook of deliberative democracy: 1–31. Oxford: Oxford University Press.CrossRefGoogle Scholar
Bächtiger, A., & Parkinson, J. 2019. Mapping and measuring deliberation: Towards a new deliberative quality. Oxford: Oxford University Press.CrossRefGoogle Scholar
Bächtiger, A., Shikano, S., Pedrini, S., & Ryser, M. 2009. Measuring deliberation 2.0: Standards, discourse types, and sequenzialization. ECPR General Conference, 5–12.Google Scholar
Barko, T., Cremers, K. J. M., & Renneboog, L. 2017. Shareholder engagement on environmental, social, and governance performance. Working paper no. 509/2017, European Corporate Governance Institute (ECGI)—Finance, Brussels.Google Scholar
Barley, S. R. 1986. Technology as an occasion for structuring: Evidence from observations of CT scanners and the social order of radiology departments. Administrative Science Quarterly, 31(1): 78–108.CrossRefGoogle ScholarPubMed
Barley, S. R. 2008. Coalface institutionalism. In Greenwood, R., Oliver, C., Sahlin, K., & Suddaby, R. (Eds.), The Sage handbook of organizational institutionalism: 491–518. Thousand Oaks, CA: Sage.CrossRefGoogle Scholar
Barsade, S. G., Ward, A. J., Turner, J. D. F., & Sonnenfeld, J. A. 2000. To your heart’s content: A model of affective diversity in top management teams. Administrative Science Quarterly, 45(4): 802–36.CrossRefGoogle Scholar
Bartley, T. 2007. Institutional emergence in an era of globalization: The rise of transnational private regulation of labor and environmental conditions. American Journal of Sociology, 113(2): 297–351.CrossRefGoogle Scholar
Bebchuk, L., Cohen, A., & Ferrell, A. 2009. What matters in corporate governance. Review of Financial Studies, 22(2): 783–827.CrossRefGoogle Scholar
Becht, M., Franks, J. R., Mayer, C., & Rossi, S. 2008. Returns to shareholder activism: Evidence from a clinical study of the Hermes UK focus fund. Review of Financial Studies, 22(8): 3093–3129.CrossRefGoogle Scholar
Boyer, A. 1995. Democracy and disagreement. Ratio Juris, 8(1): 1–8.CrossRefGoogle Scholar
Braithwaite, J. 1989. Crime, shame and reintegration. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Brand, T., Blok, V., & Verweij, M. 2020. Stakeholder dialogue as agonistic deliberation: Exploring the role of conflict and self-interest in business–NGO interaction. Business Ethics Quarterly, 30(1): 3–30.CrossRefGoogle Scholar
Buis, M. L. 2010. Inequality of educational outcome and inequality of educational opportunity in the Netherlands during the 20th century. Unpublished doctoral thesis, Vrije Universiteit.Google Scholar
Buis, M. L. 2011. The consequences of unobserved heterogeneity in a sequential logit model. Research in Social Stratification and Mobility, 29(3): 247–62.CrossRefGoogle Scholar
Carleton, W. T., Nelson, J. M., & Weisbach, M. S. 1998. The influence of institutions on corporate governance through private negotiations: Evidence from TIAA-CREF. Journal of Finance, 53(4): 1335–62.CrossRefGoogle Scholar
Casciaro, T., & Lobo, M. S. 2005. Competent jerks, lovable fools, and the formation of social networks. Harvard Business Review, 83(6): 92–99.Google ScholarPubMed
Chambers, S. 1996. Reasonable democracy: Jürgen Habermas and the politics of discourse. Ithaca, NY: Cornell University Press.CrossRefGoogle Scholar
Collins, R. 2004. Interaction ritual chains. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
de Bakker, F. G. A., & den Hond, F. 2008. Introducing the politics of stakeholder influence: A review essay. Business and Society, 47(1): 8–20.CrossRefGoogle Scholar
Delli Carpini, M. X., Cook, F. L., & Jacobs, L. R. 2004. Public deliberation, discursive participation, and citizen engagement: A review of the empirical literature. Annual Review of Political Science, 7: 315–44.CrossRefGoogle Scholar
Dewey, J. 1922. Human nature and conduct: An introduction to social psychology. New York: Henry Holt and Company.Google Scholar
Dimson, E., Karakas, O., & Li, X. 2015. Active ownership. Review of Financial Studies, 28(12): 3225–68.CrossRefGoogle Scholar
Dryzek, J. S. 1999. Transnational democracy. Journal of Political Philosophy, 7(1): 30–51.CrossRefGoogle Scholar
Dryzek, J. S. 2010. Rhetoric in democracy: A systemic appreciation. Political Theory, 38(3): 319–39.CrossRefGoogle Scholar
Dryzek, J. S., Bächtiger, A., Chambers, S., Cohen, J., Druckman, J. N., Felicetti, A., Fishkin, J. S., Farrell, D. M., Fung, A., Gutmann, A., Landemore, H., Mansbridge, J., Marien, S., Neblosimon Niemeyer, M. A., Setälä, M., Slothuus, R., Suiter, J., Thompson, D., & Warren, M. E. 2019. The crisis of democracy and the science of deliberation. Science, 363(6432): 1144–46.CrossRefGoogle ScholarPubMed
Dryzek, J. S., & Niemeyer, S. 2006. Reconciling pluralism and consensus as political ideals. American Journal of Political Science, 50(3): 634–49.CrossRefGoogle Scholar
Earl, J., Martin, A., McCarthy, J. D., & Soule, S. A. 2004. The use of newspaper data in the study of collective action. Annual Review of Sociology, 30: 65–80.CrossRefGoogle Scholar
Earl, J., Soule, S. A., & McCarthy, J. D. 2003. Protest under fire? Explaining the policing of protest. American Sociological Review, 68(4): 581–606.CrossRefGoogle Scholar
Eesley, C., DeCelles, K. A., & Lenox, M. 2016. Through the mud or in the boardroom: Examining activist types and their strategies in targeting firms for social change. Strategic Management Journal, 37(12): 2425–40.CrossRefGoogle Scholar
Ehrnström-Fuentes, M. 2016. Delinking legitimacies: A pluriversal perspective on political CSR. Journal of Management Studies, 53(3): 433–62.CrossRefGoogle Scholar
Elster, J. 1986. The market and the forum: Three varieties of political theory. In Elster, J. & Hylland, A. (Eds.), Foundations of social choice theory: 103–32. Cambridge: Cambridge University Press.Google Scholar
Ferraro, F., & Beunza, D. 2018. Creating common ground: A communicative action model of dialogue in shareholder engagement. Organization Science, 29(6): 1187–207.CrossRefGoogle Scholar
Ferraro, F., Etzion, D., & Gehman, J. 2015. Tackling grand challenges pragmatically: Robust action revisited. Organization Studies, 36(3): 363–90.CrossRefGoogle Scholar
Fombrun, C., & Shanley, M. 1990. What’s in a name? Reputation building and corporate strategy. Academy of Management Journal, 33(2): 233–58.CrossRefGoogle Scholar
Fung, A. 2007. Democratic theory and political science: A pragmatic method of constructive engagement. American Political Science Review, 101(3): 443–58.CrossRefGoogle Scholar
Fung, A., & Wright, E. O. 2003. Deepening democracy: Institutional innovations in empowered participatory governance. Politics and Society, 29(1): 3–42.Google Scholar
Gibson, R., Glossner, S., Krueger, P., Matos, P., & Steffen, T. 2020. Responsible institutional investing around the world. Research paper no. 20-13, Swiss Finance Institute, Geneva.CrossRefGoogle Scholar
Gilbert, D. U., Rasche, A., & Waddock, S. 2011. Accountability in a global economy: The emergence of international accountability standards. Business Ethics Quarterly, 21(1): 23–44.CrossRefGoogle Scholar
Goffman, E. 1967. Interaction ritual: Essays in face-to-face behavior. New York: Taylor and Francis.Google Scholar
Goffman, E. 1983. The interaction order: American Sociological Association, 1982 presidential address. American Sociological Review, 48(1): 1.CrossRefGoogle Scholar
Goodin, R. E. 2008. Innovating democracy: Democratic theory and practice after the deliberative turn. New York: Oxford University Press.CrossRefGoogle Scholar
Goodman, J., & Arenas, D. 2015. Engaging ethically: A discourse ethics perspective on social shareholder engagement. Business Ethics Quarterly, 25(2): 163–89.CrossRefGoogle Scholar
Gupta, A., & Briscoe, F. 2020. Organizational political ideology and corporate openness to social activism. Administrative Science Quarterly, 65(2): 524–63.CrossRefGoogle Scholar
Gwet, K. L. 2008. Computing inter-rater reliability and its variance in the presence of high agreement. British Journal of Mathematical and Statistical Psychology, 61(1): 29–48.CrossRefGoogle ScholarPubMed
Gwet, K. L. 2010. Handbook of inter-rater reliability: The definitive guide to measuring the extent of agreement among raters. Gaithersburg, MD: Advanced Analytics.Google Scholar
Habermas, J. 1984. The theory of communicative action. Boston: Beacon Press.Google Scholar
Habermas, J. 2006. Political communication in media society: Does democracy still enjoy an epistemic dimension? The impact of normative theory on empirical research. Communication Theory, 16(4): 411–26.CrossRefGoogle Scholar
Habermas, J. 2018. Between facts and norms. Cambridge, MA: MIT Press.Google Scholar
Healey, M. P., Vuori, T., & Hodgkinson, G. P. 2015. When teams agree while disagreeing: Reflexion and reflection in shared cognition. Academy of Management Review, 40(3): 399–422.CrossRefGoogle Scholar
Healy, K. 2017. Fuck nuance. Sociological Theory, 35(2): 118–27.CrossRefGoogle Scholar
Heckman, J. J. 2013. Sample selection bias as a specification error. Applied Econometrics, 31(3): 129–37.Google Scholar
Hurley, S. 2008. The shared circuits model (SCM): How control, mirroring, and simulation can enable imitation, deliberation, and mindreading. Behavioral and Brain Sciences, 31(1): 1–58.CrossRefGoogle ScholarPubMed
Janssen, D., & Kies, R. 2005. Online forums and deliberative democracy. Acta Política, 40(3): 317–35.CrossRefGoogle Scholar
King, B. G. 2008. A political mediation model of corporate response to social movement activism. Administrative Science Quarterly, 53(3): 395–421.CrossRefGoogle Scholar
King, B. G., & McDonnell, M.-H. 2015. Good firms, good targets: The relationship among corporate social responsibility, reputation, and activist targeting. In Corporate social responsibility in a globalizing world: 430–54. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
King, B. G., & Soule, S. A. 2007. Social movements as extra-institutional entrepreneurs: The effect of protests on stock price returns. Administrative Science Quarterly, 52(3): 413–42.CrossRefGoogle Scholar
LeBreton, J. M., & Senter, J. L. 2008. Answers to 20 questions about interrater reliability and interrater agreement. Organizational Research Methods, 11(4): 815–52.CrossRefGoogle Scholar
Leiblein, M. J., Reuer, J. J., & Dalsace, F. 2002. Do make or buy decisions matter? The influence of organizational governance on technological performance. Strategic Management Journal, 23(9): 817–33.CrossRefGoogle Scholar
Lepine, J. A., & Van Dyne, L. 2001. Peer responses to low performers: An attributional model of helping in the context of groups. Academy of Management Review, 26(1): 67–84.CrossRefGoogle Scholar
Levy, D., Reinecke, J., & Manning, S. 2016. The political dynamics of sustainable coffee: Contested value regimes and the transformation of sustainability. Journal of Management Studies, 53(3): 364–401.CrossRefGoogle Scholar
Logsdon, J., & Van Buren, H. 2008. Justice and large corporations: What do activist shareholders want? Business and Society, 47(4): 523–48.CrossRefGoogle Scholar
Logsdon, J., & Van Buren, H. 2009. Beyond the proxy vote: Dialogues between shareholder activists and corporations. Journal of Business Ethics, 87(S1): 353–65.CrossRefGoogle Scholar
Mansbridge, J. 2015. A minimalist definition of deliberation. In Heller, P. & Rao, V. (Eds.), Deliberation and development: Rethinking the role of voice and collective action in unequal societies: 27–50. Washington, DC: World Bank.CrossRefGoogle Scholar
Mansbridge, J., Hartz-Karp, J., Amengual, M., & Gastil, J. 2006. Norms of deliberation: An inductive study. Journal of Public Deliberation, 2(1): Article 7.Google Scholar
McAdam, D., & Su, Y. 2002. The war at home: Antiwar protests and congressional voting, 1965 to 1973. American Sociological Review, 67(5): 696–721.CrossRefGoogle Scholar
McDonnell, M.-H. 2016. Radical repertoires: The incidence and impact of corporate-sponsored social activism. Organization Science, 27(1): 53–71.CrossRefGoogle Scholar
McDonnell, M.-H., & King, B. 2013. Keeping up appearances reputational threat and impression management after social movement boycotts. Administrative Science Quarterly, 58(3): 387–419.CrossRefGoogle Scholar
McDonnell, M.-H., King, B. G., & Soule, S. A. 2015. A dynamic process model of private politics. American Sociological Review, 80(3): 654–78.CrossRefGoogle Scholar
McFarland, D. A., Jurafsky, D., & Rawlings, C. 2013. Making the connection: Social bonding in courtship situations. American Journal of Sociology, 118(6): 1596–649.CrossRefGoogle Scholar
Niemeyer, S., & Dryzek, J. S. 2007. The ends of deliberation: Meta-consensus and inter-subjective rationality as ideal outcomes. Swiss Political Science Review, 13(4): 497–526.CrossRefGoogle Scholar
Rasche, A., & Esser, D. E. 2006. From stakeholder management to stakeholder accountability. Journal of Business Ethics, 65(3): 251–67.CrossRefGoogle Scholar
Rivera, L. A. 2015. Go with your gut: Emotion and evaluation in job interviews. American Journal of Sociology, 120(5): 1339–89.CrossRefGoogle ScholarPubMed
Roberts, P. W., & Dowling, G. R. 2002. Corporate reputation and sustained superior financial performance. Strategic Management Journal, 23(12): 1077–93.CrossRefGoogle Scholar
Roloff, J. 2008. Learning from multi-stakeholder networks: Issue-focussed stakeholder management. Journal of Business Ethics, 82(1): 233–50.CrossRefGoogle Scholar
Ryfe, D. M. 2005. Does deliberative democracy work? Annual Review of Political Science, 8: 49–71.CrossRefGoogle Scholar
Sabadoz, C., & Singer, A. 2017. Talk ain’t cheap: Political CSR and the challenges of corporate deliberation. Business Ethics Quarterly, 27(2): 183–211.CrossRefGoogle Scholar
Scheff, T. J. 1990. Microsociology: Discourse, emotion, and social structure. Chicago: University of Chicago Press.Google Scholar
Schegloff, E. A. 1982. Discourse as an interactional achievement: Some uses of “uh huh” and other things that come between sentences. In Roundtable on languages and linguistics: 71–93. Washington, DC: Georgetown University Press.Google Scholar
Scherer, A. G., & Palazzo, G. 2007. Toward a political conception of corporate responsibility: Business and society seen from a Habermasian perspective. Academy of Management Review, 32(4): 1096–1120.CrossRefGoogle Scholar
Schneiderhan, E., & Khan, S. 2018. Deliberation in sociology. In Bächtiger, A., Dryzek, J. S., Mansbridge, J., & Warren, M. E. (Eds.), The Oxford handbook of deliberative democracy: 573–83. Oxford: Oxford University Press.Google Scholar
Schormair, M. J. L., & Gilbert, D. U. 2020. Creating value by sharing values: Managing stakeholder value conflict in the face of pluralism through discursive justification. Business Ethics Quarterly, 31(1): 1–36.CrossRefGoogle Scholar
Shaver, J. M. 1998. Accounting for endogeneity when assessing strategy performance: Does entry mode choice affect FDI survival? Management Science, 44(4): 571–85.CrossRefGoogle Scholar
Soderstrom, S. B., & Weber, K. 2020. Organizational structure from interaction: Evidence from corporate sustainability efforts. Administrative Science Quarterly, 65(1): 226–71.CrossRefGoogle Scholar
Sprain, L., & Black, L. 2018. Deliberative moments: Understanding deliberation as an interactional accomplishment. Western Journal of Communication, 82(3): 336–55.CrossRefGoogle Scholar
Steenbergen, M. R., Bächtiger, A., Spörndli, M., & Steiner, J. 2003. Measuring political deliberation: A discourse quality index. Comparative European Politics, 1(1): 21–48.CrossRefGoogle Scholar
Steiner, J., Bächtiger, A., Spörndli, M., & Steenbergen, M. R. 2005. Deliberative politics in action: Analyzing parliamentary discourse, vol. 1. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Strang, H., & Braithwaite, J. 2017. Connecting philosophy and practice. In Strang, H. & Braithwaite, J. (Eds.), Restorative justice: Philosophy to practice: 203–20. New York: Routledge.CrossRefGoogle Scholar
Strauss, A. 1978. Negotiations: Varieties, contexts, processes, and social order. San Francisco: Jossey-Bass.Google Scholar
Sulkin, T., & Simon, A. F. 2001. Habermas in the lab: A study of deliberation in an experimental setting. Political Psychology, 22(4): 809–26.CrossRefGoogle Scholar
Thompson, D. F. 2008. Deliberative democratic theory and empirical political science. Annual Review of Political Science, 11(1): 497–520.CrossRefGoogle Scholar
Unerman, J., & Bennett, M. 2004. Increased stakeholder dialogue and the internet: Towards greater corporate accountability or reinforcing capitalist hegemony? Accounting, Organizations, and Society, 29(7): 685–707.CrossRefGoogle Scholar
Van Buren, H. J. 2007. Speaking truth to power: Religious institutions as both dissident organizational stakeholders and organizational partners. Business and Society Review, 112(1): 55–72.CrossRefGoogle Scholar
Van Dyke, N., Soule, S. A., & Taylor, V. A. 2004. The targets of social movements: Beyond a focus on the state. In Myers, D. J. & Cress, D. M. (Eds.), Research in social movements, conflicts and change, vol. 25: 27–51. Bingley, UK: Emerald Group.Google Scholar
Vasi, I. B., & King, B. G. 2012. Social movements, risk perceptions, and economic outcomes: The effect of primary and secondary stakeholder activism on firms’ perceived environmental risk and financial performance. American Sociological Review, 77(4): 573–96.CrossRefGoogle Scholar
Wang, D. J., & Soule, S. A. 2012. Social movement organizational collaboration: Networks of learning and the diffusion of protest tactics, 1960–1995. American Journal of Sociology, 117(6): 1674–722.CrossRefGoogle Scholar
Weick, K. E. 1995. Sensemaking in organizations. Thousand Oaks, CA: Sage.Google Scholar
Supplementary material: PDF

Beccarini et al. supplementary material

Beccarini et al. supplementary material

Download Beccarini et al. supplementary material(PDF)
PDF 133.5 KB