Mutual Funds

Socially Responsible Investments - Sri

What about corporate governance issues? What role do they play in socially responsible investing?

Corporate governance, or the way in which corporate organizations are managed (or mismanaged) also plays a role in socially responsible investing, as more people believe that corporations need to be more responsible and take into consideration underlying supportive social values when making many broad decisions about the strategies of their companies. For example, a socially irresponsible corporation would have no issue using child labor in China, as long as the corporation continues to hit profit targets. Another example may be the high compensation of executives, even after a company fires thousands of employees and teeters on bankruptcy. The full disclosure of information on executive compensation is an important measure that many believe is often a sign of sound corporate governance. Socially responsible firms align themselves with and support certain broad values, both bottom-up and top-down.


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