This apparently loopy idea, contradicting everything that existing 'ethical' funds practise, is one of a number of suggestions made by Craig Mackenzie, a researcher with the New Consumer, a Newcastle-based charity, in its Shareholder Action Handbook, published this month.
Mr Mackenzie believes that investment in companies with poor ethical and social performance allows more opportunities for 'energetic shareholder action campaigns for reform'. He is sceptical of the effectiveness of traditional ethical investment.
'Negative screening encourages ethically motivated people to silently sell their shares and move to a 'clean' company, with little practical impact except a clearer conscience for the investor,' he said.
More generally, Mr Mackenzie wants to encourage greater participation by shareholders, not only in issues of social responsibility, in companies which (at least theoretically) they part-own. 'Shareholders are not expected to have any responsibilities. But if you read company law, the whole idea behind it is that shareholders must participate in running their companies.'
He maintains that shareholders also help to promote their own interests by taking a more active role. 'There are an awful lot of directors who are not pulling their weight or earning their salaries and wouldn't be there if there was a very vociferous shareholder lobby. Shareholder activism would serve to increase the economic efficiency of companies,' he said.
The existing image of the active shareholder is perhaps not a very attractive one: the slightly eccentric figure who attends company annual meetings, raises obscure points from the floor, is quietly patronised by the company chairman and then departs for the free lunch.
Mr Mackenzie argues that there is much more scope for effective shareholder intervention. At the simplest level, letter-writing can have a disproportionate effect, he suggests. 'Companies do not get very many letters from their shareholders, consequently, when they do they tend to treat them seriously,' he says.
He recounts with approval last year's initiative by Surfers Against Sewage, a Cornwall-based pressure group which gave a presentation on the financial and environmental implications of South West Water's sewage management strategy to a group of City analysts.
Shareholder Action Handbook includes other suggestions for use by pressure groups and local campaigns, on the lines of practices followed by groups such as Eltsa (End Loans to South Africa) and the anti-RTZ environmental group, Partizans.
Mr Mackenzie also suggests that Britain still has some way to go to catch up with the level of citizen shareholder activism in the United States. 'Last year, several hundred companies in the US faced socially motivated shareholder action campaigns,' he said.
One particular US initiative that may soon be replicated in Britain is the United Shareholders Association, a successful organisation dedicated to defending the interests of small shareholders. Nick Stevens, a retired civil servant, is chairman of the fledgling UK Shareholders Association, a group currently about 50-strong, which is in the process of becoming legally incorporated and trying to obtain charitable status. Mr Stevens's own involvement has come from his frustration as a Seeboard shareholder trying to challenge stock option arrangements offered to the company's directors last year.
According to Mr Stevens, the UK Shareholders Association has already identified a number of areas of concern, including Taurus (the proposed paperless Stock Exchange dealing system) and excessive payments to directors. 'There is strong evidence that boardroom pay has got totally out of hand,' he said.
'Shareholder Action Handbook' by Craig Mackenzie is available from New Consumer, 52 Elswick Rd, Newcastle upon Tyne NE4 6JH (091-272 1148) at pounds 5.95, post free.
UK Shareholders Association, c/o High Tiles, Roseacre Gardens, Chilworth, Guildford GU4 8RQ.