Socially Responsible Investing - Just a Fig Leaf?

While it may hurt investors in the pocket, are they not the ultimate responsible party on the way to socially responsible business practises? If yes, can they stay aside when a company tries to squeeze the last dollar out of its product, however reasonable the may be following simplistic principles of capitalism? Or should there be some restraint based on ethical consideration even if it if against full-out profit maximization? What would one say if doctors create a monopoly in heart operations and use every possible legalistic trick to prevent competition thus being able to increase their fees to some astronomical level?
(18-Oct-2017)
Bloomberg

Top Execs sell stock just days before bad news is released

When well-paid (overpaid?) top executives behave like this one should not wonder that Capitalism and the Market System increasingly lose public support. It is only fortunate that the average citizen is not really able to properly put such blatant abuse of position into proper perspective. After all, how many do really understand what a million dollars (life changing amount for 99% of the population) means? The maths scores tell a story! And it will be interesting to see how regulators and the trustees of the savings of ordinary people (aka investment managers, private bankers) and the corporate and 'socially responsible' investment crowd are going to do about this.
(9-Sept-2017)
http://www.marketwatch.com/story/equifax-executives-sold-stock-after-data-breach-before-informing-public-2017-09-07?siteid=rss&rss=1

Tired old cliches on Exec Pay

UK bosses need high pay to be competitve with US pay? That might be so, but then it is high time that someting is done about pay over there. Ban investment in non-compliant companies (a task for the Index providers if they would not just be chasing $$$ but be responsible, or is talk of socially-responsible investing just that?) or thrown USA out of WTO (again, social dumping parallel, just in reverse). All 'Fiduciaries' that do not put their weight behind reform should be excluded from soliciting investors. And please spare us the comparison with sports or media people, soccer and copyright regulation are also crying out for reform!
Drastic, but do you have an alternative that could work?
(6-August-2017)

Red Line Voting - good idea but...

The initiative from the Association of Member Nominated Trustees is a step in the right direction. But what is really needed is a way to give the real end investors, the pension fund beneficiaries, the investors in mutual funds or the clients of Private Banks a say in all votes that are held in the corporate world. Only if a conduit for them is designed will there be meaningful change in matters or corporate goverancne, ethical and social responsible investment. While it will not be possible for all individuals to vote on each and every issue and for every company whose shares are held (directly or indirectly) the solution could be to extend the role of proxy agencies. The investors should be able to select an Agency of his choice (similar to voting for a political party or politician). Agencies would be required to clearly state their voting policies and strictly adhere to them.
Red Line Voting
(11 August 2016)

ABP to introduce 'Carbon Budget'

Does it really make sense to introduce 'Carbon Budgets' as a constraint on the mandates for Asset Managers? First of all, the calculation of carbon usage for all investment options is expensive and it is also more than likely to be imprecise or liable to be gamed. And why not a Carbon budget for fixed income investments (even more complicated and expensive, how much Carbon usage to you allocate to a bond?), and before we forget, I hope there will be Carbon budget for 'Private' Equity and Hedge Funds? And last not least, don't forget the HFT firms. And what about Bank lending?
Nevermind that there is a simple solution at hand (Tax Carbon if you are hell-bent on limiting its use). Why not act according to the principle, what is good for the Consultants MUST be good for the Consumer (here in the shape of hapless end investors in Mutual and Pension Funds, Private Banks and Insurance Companies).
And while we are on the subject of Climate Hysteria, has any political or business 'leder' ever received a democratic mandate for imposing ever-more 'green' taxes, costs and regulations on the citizen/consumer/investor anywhere in the world?
(7 December 2015)

USS conducts member survey on SRI

The willingness of a large pension fund to conduct a survey asking its beneficiaries about their preferences with respect to socially responsible investment options is commendable. It is a step in the right direction as there is a glaring deficiency in present practices involving the management of assets, be it in pension funds, insurance companies, mutual funds or private banks (and we should not forget rapidly growing Sovereign Wealth Funds).
There is a well-documented agency problem in the management of companies with a dispersed ownership, i.e. the majority of major corporations. But there is another agency problem involving the relationship between asset managers of every form and shape and the final (real) investors whose money they are safeguarding. If anything, this latter agency problem might be of more relevance as it is directly responsible for the agency problem that can be observed in the corporate sphere.
So while a survey about SRI is welcome it is but a step in the right direction. Hopefully other fund will start to follow suit and in due course the end investors will have a major say in all aspects of corporate governance.
(9 Dec 2014)

Stockholders do NOT approve Pay of WPP's CEO Sorrell

Another twist in the never-ending quest of the WPP management led by CEO Sorrell. Are they really so desperate to receive every Penny they can get their hand on? What do they have to prove? But apart from this question - which is more a subject for a psychology site - one can say one thing: the REAL shareholders of WPP - or any other listed company - are usually not the ones that approve the one-sided and completely unnecessary 'incentive' schemes that inflate executive pay for the 0.1% that design their own 'compensation' schemes. In fact, their fiduciaries, large investment institutions such as Pension Funds, Investment Management firms and Mutual Fund Manager as well as Private Banks are the ones that wave these schemes through. They should stand up and be counted and not hide behind spurious 'governance statements' or - even worse - proxy advisers that are just an extra cost for the investors and responsible to no one. 'Best Business Principles' for Proxy firms may have been released just recently, but again they basically are designed by insiders for insiders.
(26 June 2014)

Should Shareholders control Corporate Lobbying?

Given the influence that the Super Rich 0.001 per cent have on the political process in the US (and the UK, Russia etc are not immune either) a strong argument can be made for Shareholders to assert control about the spending by Corporations on lobbying activities.
(19/12/2011)

Lobbies, Socially Responsible Investing and Democracy

News that the Swiss insurance group Zurich Financial Services spent Sfr 35 million on political lobbying during the past decade raises a few important points: where should the limit on such lobbying be? Are the shareholders able (and willing) to control such interference with the democratic process? In an age where socially responsible investing has become a significant factor influencing investment decisions this kind of activity must certainly receive priority attention from  investors - many if not the majority are only fiduciaries for the real investors, i.e. private savers in mutual funds, insurance companies, pension funds and the fund management units looking after investment portfolios in private banking departments.
(22/02/2011)