Case6_Solidarity - Case 6 The Solidarity Fund and Gildan...

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Case 6: The Solidarity Fund and Gildan Activewear, Inc. TEACHING NOTE FOR: THE SOLIDARITY FUND AND GILDAN ACTIVEWEAR, INC. This case illustrates the following themes and concepts discussed in the chapters listed: Theme/Concept Chapter Corporate social responsibility 3 Globalization 6 Global corporate citizenship 7 Shareholder activism; institutional investment 14 Social investment, socially responsible investing 14 Labor unions, employee rights 16 Case Synopsis: This case describes a decision facing the officers of the Solidarity Fund, a large pension fund operated by the Quebec Federation of Labor (QFL). The QFL had founded the Fund to provide members of its affiliated unions and others access to professionally managed retirement accounts. It also sought to create job growth in the province of Quebec and to support companies with good working conditions, positive relations with local communities, and a commitment to environmental responsibility. The dilemma concerned what the Fund should do about its investments in Gildan Activewear, a Quebec-based textile company. Human rights activists and investigative journalists had charged that Gildan’s workers in Honduras earned less than a living wage, worked long shifts, had excessively high production quotas, and breathed air filled with fabric dust. Just a few months later, a labor rights group issued a report claiming Gildan had fired Honduran workers who had tried to organize a union. These charges presented the Fund, which owned 14 percent of Gildan, with a difficult dilemma. The textile company had been an excellent investment; its stock had risen in value from just over $2 per share when the fund first invested to nearly $12. However, if the allegations were true, the company’s practices would run counter to the basic values of the Fund. Should the pension fund try to influence Gildan’s conduct? Should it sell its shares in protest? Or, should it do neither? TEACHING TIP: WHERE TO USE THE CASE IN THE COURSE This case is integrative, in that it draws on many themes of the text. It may be used at the end of the course as a final, integrative assignment; or with the study of Chapter 6 (globalization), Ch 7 (global corporate citizenship), Chapter 14 (shareholder activism; socially responsible investment), or Chapter 16 (employee rights). Discussion Questions: Case 6-1
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Case 6: The Solidarity Fund and Gildan Activewear, Inc. 1. What is the purpose of the Solidarity Fund? Do you think it represents an example of social investment? Why or why not? 2. Do you believe the evidence in the case shows Gildan Activewear to be a socially responsible company, or not?
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  • Fall '09
  • Gough
  • Business Law, Socially responsible investing, Solidarity Fund, Gildan Activewear

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