Shareholders' Project Revealed

Two Australia-wide surveys carried out as part of the Shareholders’ Project have found that most shareholders (54%) have not heard the term ‘ethical investment’ – although a majority of direct shareholders, particularly men, have.

However, nearly two-thirds of shareholders who personally decide what to buy and sell make their share buying conditional on their approval of the company’s activities. Women are more likely to do this than men.

The Shareholders’ Project is the initiative of a group of professionals, academics and philanthropic organisations led by the Myer Foundation. It is designed to provide the first real look at what is becoming an increasingly important issue with more than 50% of Australians now owning shares directly or indirectly through superannuation and managed funds.

In releasing details of the two major surveys Dr. Charles Lane, the CEO of the Myer Foundation, says it’s timely to examine the changing nature of the shareholder-corporation relationship.

The first survey is a quantitative study involving a national telephone survey of 1000 Australians who hold shares either directly or indirectly. The poll was conducted by Irving Saulwick & Associates during August 2001.

Of those people who have heard the term ‘ethical investment’, 80% said they would be prepared to accept a lower dividend or share price in return for being able to invest ethically.

Only 20% who had heard of the term ‘ethical investment’ had made one!

However most thought they would not be called on to make this trade off. 68% said they thought ethical investments would be at least as profitable as investments in companies generally.

The survey found that there is little shareholder activism in Australia with only 6% of shareholders having spoken at an AGM or communicated directly with the company over its activities.

The survey found that 71% of people who indirectly owned shares through superannuation or managed funds do not think very much about share selection, leaving the decision to fund managers.

The second survey is a qualitative study of the attitudes of superannuation trustees and fund managers to ethical investments and shareholder activism. The results follow 60 in-depth interviews.

The study found that while there is a tendency to pay more attention to ethical and social dimensions of investment decisions, there is still a deep divide within the investment community on opinions regarding socially responsible investments.

This is captured in the words of two respondents. One said, “Love it”. The other said, “Bullshit”.

The Shareholders’ Project suggests that the key areas of focus should be the education of shareholders and the role of corporations in Australia and should include initiatives such as promoting the use of the Internet to increase shareholder participation in corporate governance issues.

If you would like a copy of the survey results send an e-mail to probono@probonoaustralia.com.au.