The Use of Multiple Methods of Engagement: A Case Study of Foreign & Colonial Investments

Isukul, Araniyar (2013) The Use of Multiple Methods of Engagement: A Case Study of Foreign & Colonial Investments. Doctoral thesis, Northumbria University.

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Abstract

The central aim of the thesis is to examine the use of multiple methods in institutional investors‟ engagement in the UK. In pursuit of that aim, the thesis seeks to examine institutional investors‟ engagement through the agency theory framework. Previous research on institutional investors‟ engagement has failed to illuminate the ways in which institutional investors‟ engagement in corporate governance and corporate social responsibility is applying multiple methods to engagement; particularly as a significant amount of institutional investors‟ engagement is conducted discreetly and the data and information relating to their engagement activities is not usually publicly disclosed. Very few researchers investigating institutional investors‟ engagement recognise that dialogue alone is, at times, insufficient and may not produce the results that they expect. Hence, extant research has not examined what path institutional investors take when a particular mode of engagement fails to yield the desired result.

This research examines Foreign & Colonial Investments and reveals that, when one method of institutional investors‟ engagement, employed to influence corporate behaviour, is unsuccessful, F&C Investments makes use of another method of engagement to influence corporate behaviour, policies and practices. Hence, the traditional approach to institutional investors‟ engagement is changing. For example, in the past, institutional investors‟ engagement in corporate governance and corporate social responsibility tended to occur separately. Institutional investors‟ engagement in corporate social responsibility was the focus of ethical and religious investors. However, this research clearly shows that institutional investors integrate corporate governance and corporate social responsibility issues in F&C Investments‟ engagement practices. The integrating of corporate governance and corporate social responsibility suggests that the practise of institutional investors‟ engagement may have is advancing. F&C Investments‟ engagement in corporate governance and corporate social responsibility indicates that corporate social responsibility has become mainstream, having progressed beyond the initial realms of religious and ethical investors to become a major aspect of corporate governance.

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