Which strikes more fear into the hearts of corporate heads: the shareholder activism of big stockholders, or a giant inflatable rat?
Unbeknownst to one another, proponents of both methods argued their cases within blocks of one another in New York June 10.
At the Roosevelt Hotel, investment managers and officers from endowments and foundations gathered to discuss the merits of socially responsible investing and corporate shareholder activism. The conference, put on by the Elkhorn, Wis.-based Capital Missions Co., included case studies in socially responsible investing as told by investors, discussion on how to find good socially responsible managers, and a simulation of how various socially responsible investments have performed vs. broader market indexes.
Three blocks away, union workers posted a 20-foot-tall rat outside the Midtown offices of a property management company. The rat symbolized the union's displeasure with the property manager's use of non-union workers for asbestos removal at various buildings, said several workers handing out leaflets imploring a boycott of the company in question until it changed its practices.
"We show up with the rat and tell people we're staying until we get what we want," said a union worker who gave his name only as Scott. "We almost always get what we want."
In the institutional investing world, leverage comes not from blow-up rats, but from owning millions of shares of a company's stock.
The goal of the daylong conference at the Roosevelt was to show institutional investors how to put that leverage to use by incorporating socially responsible investments into their portfolios and how doing so can sometimes earn better-than-market returns.
"What a time we meet in," Tim Smith, senior vice president of Walden Asset Management and president of the Social Investment Forum, both in Boston, told the attendees. "The time is now for shareholders to be heard."