Post by Moses on Jun 7, 2005 0:34:57 GMT -5
NEW FUND TO DEFEND CORPORATIONS FROM HARMFUL SOCIAL ACTIVISM
The rise of "socially responsible investing" and "ethical" mutual funds has put corporations on the defensive against activists who hope to temper their focus on maximizing profits for shareholders and encourage them to promote a host of social or environmental goals. The recently launched Free Enterprise Action Fund hopes to counterbalance such activism by lobbying corporate managers to resist inappropriate activist initiatives that would harm the company, explains Research Fellow Pierre Lemieux in a new op-ed for Canada's FINANCIAL POST.
"The Fund's 'Free Enterprise Guidelines,'" writes Lemieux, "contain criteria like, 'Is the business making or considering decisions that tend to ignore individual liberties relevant to the businesses' products?'[/b], or 'is the business willing to aggressively challenge unfounded government action that threatens its interests?'"
The fund's prospectus favorably quotes a 1970 statement by Nobel laureate economist Milton Friedman -- "The social responsibility of business is to increase its profits" -- and chides corporate behavior "that circumvents public debate and the American political process." The fund's website states that it is not against all "socially responsible investing" (SRI) or "corporate social responsibility" (CSR), because some businesses were formed to pursue both profits and social values. Rather, the fund's founders oppose only "the anti-business movement -- CSR and SRI activists who target companies for appeasements and concessions that are bad for business, bad for investors, and bad for the free enterprise system."
Although the fund is still very small, Lemieux writes, it "may be part of a contrarian movement against politically correct investing. Another politically incorrect fund, the Vice Fund, created in 2002, has $US32 million very profitably invested in alcohol, gambling defence, and tobacco. These funds are little compared to the [first SRI mutual fund] but are a step in reclaiming corporations for the only thing they do well: producing goods and services efficiently for the people -- not for the social activists."
See "A Fund for Profit Activists," by Pierre Lemieux (FINANCIAL POST, 5/26/05)
www.independent.org/newsroom/article.asp?id=1519
SPANISH TRANSLATION:
"Un Fondo para los Activistas con Fines de Lucro"
www.elindependent.org/articulos/article.asp?id=1519
Also see, "An Appropriate Ethical Model for Business and a Critique of Milton Friedman's Thesis," by Richard W. Wilcke (THE INDEPENDENT REVIEW, Fall 2004)
www.independent.org/publications/tir/article.asp?issueID=39&articleID=458
The rise of "socially responsible investing" and "ethical" mutual funds has put corporations on the defensive against activists who hope to temper their focus on maximizing profits for shareholders and encourage them to promote a host of social or environmental goals. The recently launched Free Enterprise Action Fund hopes to counterbalance such activism by lobbying corporate managers to resist inappropriate activist initiatives that would harm the company, explains Research Fellow Pierre Lemieux in a new op-ed for Canada's FINANCIAL POST.
"The Fund's 'Free Enterprise Guidelines,'" writes Lemieux, "contain criteria like, 'Is the business making or considering decisions that tend to ignore individual liberties relevant to the businesses' products?'[/b], or 'is the business willing to aggressively challenge unfounded government action that threatens its interests?'"
The fund's prospectus favorably quotes a 1970 statement by Nobel laureate economist Milton Friedman -- "The social responsibility of business is to increase its profits" -- and chides corporate behavior "that circumvents public debate and the American political process." The fund's website states that it is not against all "socially responsible investing" (SRI) or "corporate social responsibility" (CSR), because some businesses were formed to pursue both profits and social values. Rather, the fund's founders oppose only "the anti-business movement -- CSR and SRI activists who target companies for appeasements and concessions that are bad for business, bad for investors, and bad for the free enterprise system."
Although the fund is still very small, Lemieux writes, it "may be part of a contrarian movement against politically correct investing. Another politically incorrect fund, the Vice Fund, created in 2002, has $US32 million very profitably invested in alcohol, gambling defence, and tobacco. These funds are little compared to the [first SRI mutual fund] but are a step in reclaiming corporations for the only thing they do well: producing goods and services efficiently for the people -- not for the social activists."
See "A Fund for Profit Activists," by Pierre Lemieux (FINANCIAL POST, 5/26/05)
www.independent.org/newsroom/article.asp?id=1519
SPANISH TRANSLATION:
"Un Fondo para los Activistas con Fines de Lucro"
www.elindependent.org/articulos/article.asp?id=1519
Also see, "An Appropriate Ethical Model for Business and a Critique of Milton Friedman's Thesis," by Richard W. Wilcke (THE INDEPENDENT REVIEW, Fall 2004)
www.independent.org/publications/tir/article.asp?issueID=39&articleID=458