ElisabethWoolcock Cloninger SolidarityFundandGildanActivewear Part 1
1.a.)
This case discusses the ethical decision the Quebec Foundation of Labor’s Solidarity Fund had to make as to how to proceed in its relationship with Gildan Activewear. The Solidarity Fund began investing in Gildan in 1995. Gildan grew, expanding to the US and Honduras to pursue vertical integration. In 2002, the Canadian Broadcasting Corporation aired an exposé depicting the deplorable conditions of operations in Gildan’s El Progreso factory. Outside monitoring agencies performed audits and pressured Gildan at the 2003 shareholder’s meeting to perform an audit to review working conditions and recent firings of workers attempting to unionize. Gildan asked the Solidarity Fund to audit its Honduras operations. Upon completion, auditors were convinced Gildan fired the employees due to unionization attempts. In November 2003, the Solidarity Fund had to decide whether to remain invested, use its voting power to transform the company’s behavior, or sell all equity and call loans.
1.b.)
In this case there are a number of stakeholders. The market stakeholders include the investors in the Solidarity Fund, The Solidarity Fund itself as a stockholder in Gildan, and the employees of both the Solidarity Fund and Gildan. The non-market stakeholders include the economies the companies support, Canada and Honduras primarily, and their governments. To review the market stakeholders first, we should look at the Solidarity Fund. It is a stockholder in Gilden and therefore, has interest due to its partial ownership. It wants to see its return on investment for its investors and can use its voting power to do so. The dilemma at hand may also affect the stockholders of the Solidarity Fund because if it underperforms the stockholders will lose money or have an opportunity cost on the investment. The investors in the Solidarity Fund have an economic power over the Solidarity Fund because if they stop investing, the Solidarity fund will no longer be a viable investment vehicle.
This case discusses the ethical decision the Quebec Foundation of Labor’s Solidarity Fund had to make as to how to proceed in its relationship with Gildan Activewear. The Solidarity Fund began investing in Gildan in 1995. Gildan grew, expanding to the US and Honduras to pursue vertical integration. In 2002, the Canadian Broadcasting Corporation aired an exposé depicting the deplorable conditions of operations in Gildan’s El Progreso factory. Outside monitoring agencies performed audits and pressured Gildan at the 2003 shareholder’s meeting to perform an audit to review working conditions and recent firings of workers attempting to unionize. Gildan asked the Solidarity Fund to audit its Honduras operations. Upon completion, auditors were convinced Gildan fired the employees due to unionization attempts. In November 2003, the Solidarity Fund had to decide whether to remain invested, use its voting power to transform the company’s behavior, or sell all equity and call loans.
1.b.)
In this case there are a number of stakeholders. The market stakeholders include the investors in the Solidarity Fund, The Solidarity Fund itself as a stockholder in Gildan, and the employees of both the Solidarity Fund and Gildan. The non-market stakeholders include the economies the companies support, Canada and Honduras primarily, and their governments. To review the market stakeholders first, we should look at the Solidarity Fund. It is a stockholder in Gilden and therefore, has interest due to its partial ownership. It wants to see its return on investment for its investors and can use its voting power to do so. The dilemma at hand may also affect the stockholders of the Solidarity Fund because if it underperforms the stockholders will lose money or have an opportunity cost on the investment. The investors in the Solidarity Fund have an economic power over the Solidarity Fund because if they stop investing, the Solidarity fund will no longer be a viable investment vehicle.