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A puzzle in SRI: the investor and the judge

A puzzle in SRI: the investor and the judge

Leys, Jos, Vandekerckhove, Wim ORCID: 0000-0002-0106-7915 and Van Liederkerke, Luc (2008) A puzzle in SRI: the investor and the judge. Journal of Business Ethics, 84 (2). pp. 221-235. ISSN 0167-4544 (Print), 1573-0697 (Online) (doi:

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As Socially Responsible Investment (SRI) enters the mainstream of professional and institutional investment practice, some perplexities arise. Some SRI market participants are well schooled in finance but are hesitative as to how to apply non-financial criteria in the management of portfolios. Governments too are giving SRI more attention and, in some countries, are discussion whether and how to regulate the SRI market. Advocacy groups are targeting SRI projects through media campaigns using political discourse. Many of the pertinent questions that come with these perplexities are of the philosophical or ethical type and concern legitimisation, demarcation of responsibilities, interpretation of norms and policy formulation. The inclusion of non-financial criteria into investment decision-making leads to a ‹puzzle in SRI’ for which this article offers a solution. The puzzle arises when the day-to-day implementation of an SRI-policy coincides with the process of administering justice. Three questions make up that puzzle: (1) what should an␣investor do when allegations arise about a corporation, (2) what should an investor do when a corporation is brought before a court, (3) what should an investor do when a corporation is found guilty by a court. This article argues, by distinguishing between the rationality of the investor and that of the judge, that allegations, court cases or court verdicts should not be reasons to disinvest from a corporation. This article offers examples from investor practice and points out in which way allegations, court cases and court verdicts make sense for investor behaviour.

Item Type: Article
Uncontrolled Keywords: socially responsible investment, (SRI), investment decision, justice, organisational malpractice, organisational policy, professionalism
Subjects: B Philosophy. Psychology. Religion > BJ Ethics
H Social Sciences > HG Finance
Faculty / School / Research Centre / Research Group: Faculty of Business
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Last Modified: 05 Nov 2019 13:47

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