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Carrot and stick?: the role of financial market intermediaries in corporate social performance

Slager, Rieneke; Chapple, Wendy


Rieneke Slager

Wendy Chapple


his article examines the role of intermediaries in financial markets in fostering corporate sustainability. Responsible investment (RI) indices have been primarily identified as intermediaries that provide information regarding corporate social performance (CSP) for investors and other stakeholders. The authors argue that the role of these intermediaries is not confined solely to information provision, but they may also incentivize high levels of CSP through mechanisms such as exclusion threats, signaling, and engagement. The authors rely on unique access to the archives of the FTSE4Good Index to examine the effects of these mechanisms on CSP. The study shows that companies facing exclusion threats and signaling are more likely to comply with the intermediary’s criteria, and medium levels of engagement leads to higher levels of CSP. The authors contribute to the study of sustainability in financial markets by explicating the mechanisms that intermediaries and other financial actors could employ to foster greater corporate sustainability.


Slager, R., & Chapple, W. (2016). Carrot and stick?: the role of financial market intermediaries in corporate social performance. Business and Society, 55(3), 398-426.

Journal Article Type Article
Acceptance Date Mar 15, 2015
Online Publication Date Feb 3, 2016
Publication Date Mar 1, 2016
Deposit Date Oct 17, 2016
Publicly Available Date Oct 17, 2016
Journal Business & Society
Print ISSN 0007-6503
Electronic ISSN 1552-4205
Publisher SAGE Publications
Peer Reviewed Peer Reviewed
Volume 55
Issue 3
Pages 398-426
Keywords Engagement, RI indices, Corporate social performance (CSP) intermediaries
Public URL
Publisher URL
Additional Information Copyright ©2016 by SAGE Publications


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