The Fonds de solidarité has greatly broadened the decision-making capacity of its labour sponsor and affiliated membership. Along with helping to establish fund policy, FTQ members are frequently involved in the hands-on planning and operational aspects of investment, sales, and the delivery of programs and services. Apart from the use of volunteers (e.g., in the promotion and distribution of shares), this happens through fund staffing which includes numerous individuals with union backgrounds. For the Fonds de solidarité, this ensures sponsor input at all decision-making levels as well as integration of staffpersons with different outlooks (e.g., labour and finance). Other labour-sponsored funds organize staff complements similarly.
Indications are that labour uses this new influence in capital markets responsibly. Contrary to a well-travelled myth, for instance, labour-sponsored funds do not exercise leverage as investors and shareholders to force unionization on investee firms. Neither do they reject companies looking for financing where workers are unorganized. Furthermore, the funds do not interfere in labour disputes or otherwise get involved in collective bargaining.
The beneficial role played by unions and union members in identifying and referring quality deal flows to labour-sponsored funds has been acknowledged recently by finance and investment professionals.Endnote 26 They also have proven to be an invaluable information source for the funds in the due diligence process. In fact, all of the leading funds interview workers and/or their elected representatives when undertaking a detailed examination of the performance and attributes of a potential investee firm.
It was stated previously that directors of leading funds are concerned about a trend among some new funds that may be undermining the principle of labour control and influence. It is alleged that a few funds may be labour-sponsored in name only with little union representation on boards of directors or otherwise exercising decision-making powers. It has been proposed that such changes to the concept of labour-sponsored funds as pioneered warrants further investigation and action.Endnote 27
As indicated above, labour-sponsored investment funds are market-based institutions. However, they are not institutions with a singular interest in profit maximization. Indeed, fund founders, such as Louis Laberge of the FTQ, eschewed some investment activity that has characterized the venture capital market in the past. An illustration is the spate of high profile acquisitions, mergers and takeovers of the late 1980s which, from the perspective of labour, may have contributed merely to "paper entrepreneurship", or worse, to the destruction of some employment.Endnote 28
As originally conceived in Québec, labour-sponsored funds reject what appear to their directors as examples of financial speculation and capital waste. Rather, limited or scarce capital resources should be allocated to productive investments that generate the widest possible array of benefits to the Canadian economy and society. Hence, in addition to concentrating on providing optimal financial rates of returns (to shareholders) from investments, the funds also focus on obtaining optimal non-financial - or socio-economic - returns.