The New Capitalists: How Citizen Investors Are Reshaping the Corporate Agenda.

• Author: Marshall, Jeffrey
• Position: BookSHELF - Stephen Davis, Jon Lukomnik, David Pitt-Watson - Book review

The New Capitalists: How Citizen Investors Are Reshaping the Corporate Agenda. By Stephen Davis, Jon Lukomnik and David Pitt-Watson. Harvard Business School Press, 289 pages. $29.95

A central thesis in this ambitious and well-presented book is that tycoons and their allies no longer control corporations, but "citizen investors"--shareholders, employees, 401(k) holders--do. And these new investors are intent on companies doing good, as well as succeeding economically, treating workers and suppliers fairly and enduring the organization does no "collateral damage" in its operations.

Sounds a lot like socially responsible investing, which clearly is making inroads at a lot of companies. But is this new ownership really overt today? Institutional shareholders like mutual funds, hedge funds and the like remain far more interested in a company's earnings than its leanings, and shareholder-instituted challenges to unresponsive managements are still routine events. While the authors argue that this shareholder-instigated "civil economy" is now a reality, it seems a bit early to proclaim its flowering, especially in the U.S.

Yes, as they point out, a challenge by Catholic nuns to General Electric Co.'s environmental policy had a dramatic result: a strong proxy vote for the nuns'...