A STRATEGIC RESPONSE TO INVESTOR ACTIVISM

HOW CAN A CORPORATE EXECUTIVE BALANCE SOCIAL AND ECONOMIC PRESSURES WH EN SOCIAL ACTIVISTS AND CORPORATE INVESTORS ARE THE SAME PEOPLE! THIS is the quandary Amoco Corporation faced when investors repeatedly file d proxy resolutions requesting adoption of the Valdez Principles, ten environmental principles developed by the Coalition for Environmentall y Responsible Economies (CERES). The author describes the evolution of the relationship between CERES and Amoco. He shows how Amoco responde d strategically to investor activism with corporate activism. He also discusses the three factors determining a company's response to invest or activism: the firm's culture, the power and influence of the group filing the resolution, and the political climate in which the resoluti on is filed. Ultimately, responding to investor activism becomes an im portant aspect of integrating political strategy into competitive stra tegy.