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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
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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

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