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How shareholder dialogue depends on other stakeholders to influence companies: Ethnographic insights from a shareholder engagement fund Tanja Ohlson (University of New South Wales Sydney) Emilio Marti (Erasmus University Rotterdam) Falko Paetzold (University of Zurich)
While social movement scholars understand that social activists often depend on other stakeholders to influence companies, such interdependencies have only been partially analyzed for sustainable shareholders. For sustainable shareholders, interdependencies with other stakeholders have been analyzed for public confrontations between shareholders and companies, not for private dialogues between them. In this paper, we explore whether and how shareholder dialogue depends on other stakeholders to influence companies. Based on unique ethnographic access to the Federated Hermes SDG Engagement Fund, we show that this fund systematically used meetings with companies to make other stakeholders salient, and that this tactic changed how companies perceived their stakeholder environment and led companies to implement sustainability-related changes more quickly. We use our inductive insights to develop a multi-stakeholder model of the impact of shareholder dialogue. Our model illuminates the complementarity between private dialogues and public confrontations: while public confrontations seek to influence the stakeholder environment of companies, shareholder dialogue tries to influence a company’s perception of its stakeholder environment, thereby speeding up company-internal changes once environmental and social issues have reached a certain maturity. With our model, we contribute to research on shareholder activism by illuminating both the distinct impact of shareholder dialogue and its limitations, and to research on social movements by expanding our understanding of how social activists contribute to the diffusion of new practices.