Search

This dissertation contributes to the existing body of knowledge on ethical and investment exclusions. Accordingly, the first chapter examines the consequences of ethical exclusions from the point of view of excluded firms. Specifically, it makes use of the Norway GPFG's ethical exclusion announcements and documents a post-announcement negative return impact on firms' stock prices which is not reversed in the short term. Furthermore, I find that product exclusion announcements influence some ethics-sensitive investors who also divest negatively screened firms. Therefore, the chapter demonstrates that ethical exclusions can adversely affect firm equity value, at least in the short term. The second chapter examines the impact of sector exclusions on the portfolio of a long-term well-diversified investor. Using industry indices spanning 1900–2018, we identify a number of risks associated with sector exclusion strategies. Focusing on the part of the portfolio which is being substituted away from a given sector, we show that negative screenings can give rise to substantial drawdowns and unintended geographical tilts. We conclude that over the long run the consequences of sector exclusion for investors are likely to be non-trivial. The third chapter conducts a survey of industry professionals’ views on divestments. Respondents consider negative portfolio screenings most useful for attracting funds from ethically concerned investors and are least in favour of using them for risk management purposes. Furthermore, professionals express the lowest levels of disagreement about the expected returns of non-controversial sectors, relative to those of controversial sectors. We also classify respondents into clusters depending on their opinions regarding sector exclusions. Those who are divestment “sceptics” form risk estimates with higher resemblance to historic performances than divestment “devotees”. Overall, survey responses imply that exclusions scepticism does not stem from an expectation that controversial sectors have superior performance to non-controversial sectors.

Concern about the economic, social and environmental impacts caused by the production and consumption of products and services has resulted in an escalation in the monitoring of companies by stakeholders. Scrutiny has been enhanced by an expanding array of behaviour-modulating instruments, which span a voluntary to mandatory continuum, in the form of ethical identifiers that range from collaborative partnerships, through codes and standards, to regulations, directives and laws. Such identifiers are now becoming more-widely used by businesses in the formulation and communication of their Corporate Social Responsibility and sustainability (CSRS) related strategies. In a business environment undergoing closer examination, individual companies must determine the extent to which they will endorse CSRS, as well as deciding on their level of public disclosure of related practices. However, despite an increasing number of tools that are available for communicating ethical disclosure, there is currently no agreed standard format for presenting the relevant data. This can create difficulties for stakeholders who may wish to compare and contrast the ethical business practices of different companies and can reduce the pressure for meaningful change to be brought about. In the course of the research reported in this thesis, philosophical, ethical and legitimacy theories were drawn upon to understand the approaches that underpin CSRS disclosure, whilst the engagement of key stakeholders was evaluated by applying the principles involved in stakeholder mapping and ethical business strategy communication. For practical reasons, the study focusses on a single global business sector with identifiable CSRS interests, the apparel sector, which has well-publicised issues regarding both its social and environmental impacts, while also possessing constituent parts that are applicable to a variety of other consumer goods markets (for example, extended supply chains). Using a pragmatic methodology, the primary research consisted of two phases carried out in sequence; quantitative research first, then qualitative investigation. The first phase utilised findings from previously published quantitative research to pinpoint five fashion sector brands. The brands’ web-based CSRS-related disclosure was examined by means of a longitudinal four-stage content analysis, which involved an assessment of the click paths created by brands to enable interested parties to access information about their ethical business practices. The ethical identifiers disclosed were then classified and enumerated to quantify the range and complexity of the CSRS-related information provided by each brand. The information gained from the findings was also used to inform the development of a framework for identifying, grading and communicating CSRS disclosure to enable comparative analysis of the approaches adopted by different companies and their suitability to different types of stakeholders. The second phase of the research utilised a qualitative methodology to probe the results from the quantitative phase and to develop an improved communication tool. In-depth interviews were undertaken with fifteen key informants on CSRS, encompassing policy makers, advisors and representatives from commerce; as well as five consumer focus groups divided by age (20s, 30s, 40s, 50s, and 60 years and over). As a result of the research findings, ten stakeholder types were identified as key audiences for CSRS-related information, while stakeholder engagement with the data was classified into three levels ranging from ‘active’, through ‘aware but ambivalent’, to ‘inactive’. Stakeholders who were categorised as ‘active’, responded to triggers created by CSRS-related knowledge and readily participated in behaviours that were sympathetic to promoting social responsibility. The ‘active’ stakeholders were likely to be professionals working in the area of CSRS and consumers personally committed to ethical goals. The participants who demonstrated ‘awareness but ambivalence’ to CSRS information possessed knowledge of CSRS issues, but were not emotionally committed to its goals. They used behavioural filters to explain the rationale supporting a position of commitment that was flexible and dependent on circumstances; hence their tendency to consider the information was affected by a range of additional factors. By contrast, ‘inactive’ stakeholders created blockers or barriers to justify why the responsibility for CSRS lay not with themselves, but with second and third parties in the supply chain. They displayed limited or no commitment to CSRS goals and were not swayed in their behaviour by associated knowledge. The multi-layering of stakeholder perspectives emphasises the need for a reporting framework designed to satisfy the requirements of a growing and diverse body of interested parties. To address this need, ethical identifiers used in CSRS disclosure were divided into deontological and teleological indicators to provide greater classification exclusivity than previous models. From this division, the current research proposes a new communications framework suited to a variety of levels of stakeholder commitment and CSRS complexities by using a three concentric circles (TCC) format, with core, intermediate and outer circles identifying respectively what a company is required to do (mandatory and co-regulatory actions), agrees or chooses to do (self-regulatory and voluntary activities), and is going to do (through ethical collaborative partnerships). If applied digitally, the proposed framework could provide further detail relating to the ethical identifiers contained in each circle and expand the level of information available. When current CSRS disclosure by five sample brands was analysed using the TCC format, voluntary aspects (intermediate and outer circles) were found to dominate in number over mandatory obligations (core circle). However, the deontological actions or activities within which the companies engaged (core and intermediate circles) were seen to have greater longevity than their teleological collaborations and partnerships (outer circle). Bringing together the proposed framework for communicating CSRS information and the stakeholder engagement categories, the potential for full-disclosure access to ethical indicators, and their details, was designed for the ‘active’ group, who were the most likely category to create change-making pressure on companies. The availability of basic and concise ethical data was favoured by the ‘aware but ambivalent’ group, whislt an identifiable logo, indicating that a company was disclosing its practices was considered more than adequate for the requirements of the ‘inactive’ group who were unlikely to seek further information. The stance adopted by this latter group highlighted that business accountability is not demanded by all potential stakeholders and illustrated why mandatory intervention can be needed to enforce behavioural expectations on companies. At a time when the primary and secondary rules of society are increasing the expectation of CSRS-related disclosure from companies, as well as imposing a minimum level of annual reporting on them, the current research provides theoretical, practical and public policy-based contributions to progress the discipline of ethical communications.

Unethical behaviour is a concern in the workplace, because of the possible consequences for all stakeholders. This issue is particularly salient in the financial services sector, a highly regulated environment, where breaches of the regulations can result in large fines and reputational damage to the organisation concerned. Unethical behaviour can also have severe effects on customers, such as when inappropriate advice leads to customers losing all or a large part of their savings. Empirical studies have tended to focus mostly on organisational antecedents of unethical intentions and behaviour, with individual factors not being given that much attention. Research on the antecedents of unethical intentions and behaviour has produced inconsistent findings, suggesting that context might play a role. Consequently, my research has attempted to study the individual antecedents of unethical intentions and behaviour in the financial services industry, a specific context where it is salient. Malta presents a particularly pertinent context for this study, as its profile on Hofstede's cultural dimensions scale has been empirically linked to a higher potential for engaging in unethical behaviour.

The aim of this research study is to explore what ethical issues emerge in the Indonesian mining industry? What shapes the emergence of these issues and how do organisations engage with them? Many research studies (e.g. Dierksmeier, 2013; Bowie, 2002; Cragg, 2002; and Moberg, 1997) emphasise the relevance of ethical theories in understanding ethical issues in business organisations. However, there remains a significant gap in the business ethics literature in understanding ethical issues in a context-sensitive manner. There is little awareness in most of these studies of the influence of the social structure of a multi-ethnic and multicultural society like Indonesia or of the specific industrial and organisational contexts which are being explored. There is therefore a challenge for researchers to provide a conceptual framework to study ethical issues which will fit the Indonesian mining companies’ situation. This research employed Critical Realism (CR) and a qualitative approach. Data was collected from forty-eight participant interviews with managers and employees of four mining companies in Indonesia. This made it possible to understand what ethical issues emerge in the mining industry and to examine what shapes their emergence, as well as how mining companies engage with the ethical issues. The findings revealed that the companies’ ethical concerns result from the particular characteristics of the industry and the Indonesian national culture. However, their ethical concerns typically reside in risk management and regulatory compliance. The findings showed that cultural mechanisms shape the emergence of ethical issues in the industry: family perspective and paternalism, religiosity, and multi-ethnicity. The study findings suggest that the mechanisms shaping the emergence of ethical issues at the organisations presented at times conflicting cases of instrumental or possibly unethical behaviour but also evidence of set rules and regulations as well as moral awareness, practices aimed at considering others and stakeholders’ interests. This research argues that to understand the ethical issues and how business organisations engage with them in a multi-ethnic and multicultural context, it is essential to ground the conceptual framework in both ethical theories and specific cultural sensitivities, as only then can the full story be grasped.

Recent studies of effective leadership for schools suggest relationships between the work of principals and beliefs, values and theoretical knowledge. However, it is not clear how these relationships work. In schools of the Lutheran Church of Australia the situation is complicated by expectations that principals will be operating with a Lutheran Christian world view. The precise nature of the role of world view in determining professional action has not been fully researched. This study made use of analysis techniques grounded in symbolic interactionism to examine the construction of meaning and rationale for professional actions by Lutheran secondary school principals. It sought to understand the impact of value on meaning and decision in ethically challenging situations. The central question of this research was: What values influence the reflection of Australian Lutheran secondary school principals as they address ethical dilemmas in their work? Drawing on the accounts given by three Australian Lutheran secondary principals to provide data for analysis, and making use of membership category analysis techniques, the study found that three statements could be made: 1. There is evidence in the accounts to suggest that the way principals perceive dilemmas is the result of a filtering process where some facts ate not fully considered prior to action. 2. There is evidence in the accounts to suggest that the filtering process is more strongly influenced by sub-rational and trans-rational values than by rational values. 3. There is evidence in the accounts that each piincipal has a world view that is partially shaped by values implicit in the Christian tradition. These findings are tentative because of the limited scope of the research. They have implications for the theoretical literature, suggesting that mote attention needs to be given to the impact of trans-rational and sub-rational values as filters of perception in difficult decisions. 'The findings suggest that any study of the reflection of school principals in ethically challenging situations should take into account the power of non-rational values to be a lens that distorts what is considered in the reflective process'. They also have implications for further research by those interested in Lutheran schools and those interested in the importance of values in shaping perception. Finally they have implications for those who prepare piincipals for Lutheran schools, suggesting the need for a clearer articulation of a philosophy for Lutheran schooling and for the development of the habit of critical reflection in Lutheran principals.