Browsing by Author "Viviers, S."
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- Item35 years of socially responsible investing (SRI) research : general trends over time(AOSIS, 2012) Viviers, S.; Eccles, N. S.This article describes 35 years of academic research into investment practices that in some way integrate a consideration of environmental, social and corporate governance issues. A review of 190 academic papers was undertaken to identify trends in five domains, namely ‘Primary Name’, ‘Research Themes’, ‘Ethical Foundations’, ‘Research Approach’ and ‘SRI Strategies’. The evidence reveals that more than half the researchers refer to such investment practices as Socially Responsible Investing (SRI) and for this reason the name is used in this review as a generic term for the genre. A myriad of other names were also identified. In terms of research themes, one particularly dominant theme was that of financial performance, which was often discussed in relation to fiduciary responsibility and legal aspects. Although the primary ethical foundation was not always directly observable, the majority of papers implied utilitarianism or ‘the greatest good for the greatest number’. Increased mention of ethical egoism (self-interest) is observed in later periods. An equal split between qualitative and quantitative research methodologies was noted, with a qualitative approach being more favoured in recent years. Three SRI strategies have dominated academic discussions over the past 35 years, namely negative screening, positive screening and shareholder activism. Gaps in the literature have been identified and suggestions for future research made.
- ItemDoes investing in sound corporate governance pay? A South African study(AOSIS, 2017) Mans-Kemp, N.; Erasmus, P. D.; Viviers, S.Despite increased recognition of the importance of sound corporate governance practices in emerging markets, previous researchers reported inconclusive evidence on the association between corporate governance and financial performance. Authors that predominantly focused on board-related variables might, however, have failed to reflect the complex nature of corporate governance. The financial performance measures employed in the majority of previous studies also ignored the potential risk-reducing benefits that sound corporate governance could hold for emerging market firms. The purpose of this article was thus to investigate the relationship between a comprehensive measure of corporate governance and the risk-adjusted performance of selected South African companies. A unique corporate governance database was compiled by conducting content analysis on the considered companies’ annual reports over the period 2002 to 2010. Aspects related to nine corporate governance categories were taken into account. In addition to the accounting and market-based performance measures that were employed in previous studies, South African companies’ risk-adjusted performance was also taken into account. The capital asset pricing model and the Fama-French three-factor model were employed to estimate risk-adjusted abnormal returns for four corporate governance-sorted portfolios. Both estimations revealed that the portfolio comprising of companies with the highest corporate governance scores managed to significantly outperform the market.
- ItemInstitutional proxy voting in South Africa : process, outcomes and impact(AOSIS, 2015-12-31) Viviers, S.; Smit, E. van der M.This study investigated the nature of institutional shareholder activism in South Africa with a particular focus on proxy voting as a public form of shareholder discontent. A total of 24 510 votes cast by 17 local investment management companies in 2013 were analysed. Interviews were also conducted with selected investment managers to gain more insight into the proxy voting process at their companies. Based on this data, it was concluded that investment managers preferred to engage with investee companies in private and viewed proxy voting as the last link in the shareholder activism chain. As a result, only 6.6 per cent of all votes were ‘against’ resolutions tabled by 347 JSE-listed companies in 2013. Resolutions regarding shareholders’ endorsement of companies’ remuneration policies; the election and re-election of directors, particularly those serving on audit committees; and the issuance of ordinary shares elicited the most opposition. Companies that were excluded from the JSE’s Socially Responsible Investment Index in 2013 attracted significantly more opposition than their counterparts who were included in the index when seeking shareholder approval on the election and re-election of directors and the placing of shares under the control of directors. The same applied to companies that had low environmental, social and governance disclosure scores in 2013 as regards the issuance of shares. It is recommended, amongst others, that shareholder activism in South Africa be promoted by enhancing investor education and effecting some regulatory changes.
- ItemIs responsible investing ethical?(AOSIS, 2008) Viviers, S.; Bosch, J. K.; Smit, E. v d M.; Buijs, A.A growing number of investors, globally and in South Africa, are embracing the concept of Responsible Investing (RI). In essence RI refers to a combination of investment strategies that integrate ethical as well as environmental, social and corporate governance considerations into investment analysis and decision making processes. Given the growing influence that investors are exerting on corporate decision making, the purpose of this paper was to position RI within an appropriate ethical framework. It is shown that RI constitutes a form of moral investing as responsible investors express a concern for universal principles which exceed the prescriptions of the law. The practice of RI was further contextualised in relation to seven approaches to ethical reasoning, namely ethical egoism, utilitarianism, deontological ethics, the ethics of care, virtue theory, the conventional approach to ethics as well as emotivism. From the evidence presented, it seems as if responsible investors in South Africa give preference to the principles underlying deontological ethics as well as the ethics of care (particularly with regard. to the protection of human rights and equality as well as the promotion of distributive and compensatory justice).
- ItemPrivate sector impact investment in water purification infrastructure in South Africa : a qualitative analysis of opportunities and barriers(Water Research Commission, 2020-01) McCallum, S.; Viviers, S.Impact investing is gaining substantial traction globally and in sub-Saharan Africa. In contrast to conventional investors, impact investors not only seek financial returns, but also measurable, positive social and environmental impact. A growing number of impact investments have been observed in the region in recent years, particularly in water purification infrastructure. This study sought to identify the primary barriers and opportunities that impact investors face in this sector. Semi-structured personal interviews were conducted with 20 experts in the South African impact-investment value chain and water provision system. Participants identified more barriers than opportunities and were mainly concerned about the lack of lifecycle support, the possibility of political interference and low financial return expectations. Interviewees did, however, acknowledge the potential influence that these investments have on local communities and economies. Experts were of the opinion that the best opportunities are found in decentralised water purification infrastructure, especially where it involves innovation at a convergence of sectors. As the public funding gap in South Africa is likely to grow in future, innovative deal structures and government support will become even more important.