The performance and rationale of European ethical funds : an ethical perspective

This dissertation examines whether ethical investment funds are good investments in comparison with other stock market investments for individual investors. Firstly, the financial performance of ethical funds was analysed using traditional risk adjusted performance measures. Performance was first compared with market benchmarks and then in comparison with other funds using a 'matched pair' approach (Luther, Matatko and Corner 1992; Mallin, Saadouni and Briston, 1995; Gregory, Matatko and Luther, 1997). This analysis indicated that the financial performance of ethical funds was not significantly different from market benchmarks and other funds. It was therefore concluded that ethical funds were good investments financially. A second empirical study used field research to examine the policies and processes of ethical funds. Two complementary strategies for dealing with ethical issues were identified; screening and engagement. Screening involves the use of exclusionary and/or positive ethical criteria in the stock selection process. This study indicated that ethical funds had a number of processes in place to address ethical issues. These processes included ethical screening; ethical advisory committees; specialist ethical researchers and use of other organisations. In terms of the policies and processes employed by ethical funds they were "good" investments compared to other funds. This confirms previous findings that ethical funds, although not a "panacea" were an improvement over other funds and that some ethical funds engaged with firms on ethical issues (Cowton, 1999; Mills, 2000; Friedman and Miles, 2001). Finally, ethical history and Church perspectives are employed in a tentative analysis of whether ethical funds are good investments ethically (Mackenzie, 1997). This preliminary analysis made it clear that some ethical funds would not be good investments in a moral sense for certain investors

Putting our money where their mouth is: alignment of charitable aims with charity investments - tensions in policy and practice

Given the values-driven nature of the mission of most charities, it might be expected that investment behaviour would be similarly values-driven. This paper documents the ethical investment policies and practices of the largest UK charities and explores how these are aligned with the charitable aims, drawing upon accountability, behavioural and managerial perspectives as theoretical lenses. The study employs two distinct research methods: responses to a postal questionnaire and follow-up semi-structured interviews with selected charities. The evidence indicates that a significant minority of large charities do not have a written ethical investment policy. Charities with larger investments, fundraising charities and religious charities were more likely to have a written ethical policy. We suggest that there is a pressing need for improved alignment between charities' aims and their investment practices and better monitoring of investment policies

UK charity ethical investment:policy, practice and disclosure

No abstract available

Establishing bank–corporate relationships and building competitive advantages

This article investigates how banks build competitive advantage through relationship banking. Using a grounded theory approach, 29 interviews were conducted with relationship managers and corporate banking directors in 21 case banks from 2004 to 2008. Grounded theory models were developed to illustrate the value creation process in relationship banking. It was found that long-term bank–corporate relationships were established through trust-based personal communications. In the case, banks customer information and knowledge advantages were created. Risk-adjusted returns on assets were used to measure customer relationship performance, and relationship managers were rewarded accordingly. The interviewees thought that bank performance could be improved by managing customer credit risk and identifying cross-selling opportunities. This study starts to open up the ‘black box’ of how banks create shareholder value through relationship banking, provides a picture of relationship banking as a social phenomenon, and supplies some theoretical and managerial implications. The article also links the literature relevant to relationship banking from different disciplines. This is a new way of looking at the relationship banking phenomenon and relevant literature in an integrated manner

Charity ethical investment in Norway

The charity and voluntary sector in Norway is substantial (Sivesind, 2007). Yet we know of no academic research which focuses on charity ethical investment in Norway. We have examined charity ethical investment policies and how these policies relate to the aims of charitable organisations. We survey large Norwegian charities using a postal questionnaire and semi structured interviews. The findings show that few charities publish an ethical investment policy, and it is often limited to screening out weapons, pornography and tobacco companies. The implementation of the policy differed substantially between charities. Only a few charities engage with companies directly and very few vote their shares on ethical matters as part of their investment policy. Monitoring of the ethical investment policy was often limited (or non-existent). We conclude with policy recommendations for charities

Charity ethical investment : policy practice and disclosure

This paper investigates the ethical investment policies of leading UK charities. It is estimated that UK charities in 2004 had £79 billion in assets of which £44 billion were invested (NCVO, 2006), with further growth in both influence and size predicted (SustainAbility, 2003). Yet we know of no published academic research in the UK or Norway which focuses on charity ethical investment. Using various methods, we have investigated charity ethical investment policies and how these policies relate to the aims of charitable organisations. First, we survey 197 large UK charities using a postal questionnaire. Second, we conduct interviews with finance directors of charities within our survey sample. Third, we conduct a preliminary investigation of ethical investment disclosures by Norwegian charities. The findings indicate that many charities do publish an ethical investment policy, but this is in many cases limited to screening out tobacco and weapons companies. Interviews revealed that charity investment policies often were more extensive than the abbreviated policies disclosed in the annual report. The implementation of the policy differed substantially from one charity to another charity. Only a few charities engage with companies directly and vote their shares on ethical matters as part of their investment policy. Investment disclosures by Norwegian charities tend to be more limited than disclosures by UK charities. We conclude with four clear policy recommendations for charities

An exploration of the value creation process in bank-corporate communications

Purpose - Banks and corporate customers have realized that bank-corporate relationship is important but little is known about why and how banks establish and exploit relationships. No comprehensive theory has explained relationship banking and in order to get a better understanding this study investigates why and how banks and companies communicate in order to create value.<p></p> Design/methodology/approach - This study adopts a qualitative methodology and a Grounded Theory approach was adopted. 34 in-depth interviews were conducted with banks and and 15 with corporate managers. Grounded theory models are developed based on interview data.<p></p> Findings - It was found that the nature of bank-corporate relationship is long-term. The relationship is based on trust-based personal communications between banks and corporate customers. Macro conditions including the advances in technology, financial regulation, and business globalization were considered when the case banks adopted relationship banking. Some intervening conditions including customer information and knowledge, customer needs and customer confidence also influence the development of relationship banking. The interviewees perceived that the case banks gained benefits including better customer retention economy, risk management efficiency and greater effectiveness in maintaining sustainable profitability. The corporate customers gained benefits including fund availability, product availability, service quality, help in-time, and business platform.<p></p> Originality/value - This study derives concepts and categories from primary data and identifies relationships among these theoretical elements. This investigation provides a comprehensive picture of relationship banking and supplies some theoretical and practical implications. Moreover, a value creation and allocation theory of the bank is developed.<p></p&gt