From constituencies to stakeholders in the global corporate sector

Corporate responsibility is a stepping stone towards a more accountable corporate sector.

While corporate marketers promote brands through speaking the language of desire, the agents of justice seek to ensure that this includes an internalized set of obligations - that a politics of obligation can exist where corporate decision-makers understand the reasons for acting responsibly (as the right, good or virtuous thing to do). Zadek (2001) suggests that these NGOs, as 'not-for-profit' private organizations, create the possibility for civil regulation of 'for-profit' private organizations by developing intimacy and knowledge of the production process, seeking to influence corporate and state decisions through audits and management systems as well as through personal relations and media-savvy campaigns. He also highlights the fact that there are limits to corporate responsibility in terms of events and states of affairs beyond the control of corporate executives, and that companies cannot be blamed for only seeking to take on board social and environmental responsibility when it is commercially advantageous and/or viable. Corporate responsibility as a form of self-regulation provides the basis for setting standards for private corporations so that their conduct meets ethical and political standards.

Transnational private corporations have increasingly sought an appropriate balance between the interests of investment and market share strategy, shareholders and market value alongside environmental concerns and social obligations. In short, corporations have sought growth strategies that depend on securing the increased value of intangible assets such as reputations, confidence of stakeholders (investors, customers, regulators and employees), brand identities, talent, capacity for innovation, intellectual property, networks and relationships with clients. Company structures are thus arenas for conflicts and tensions between competing imperatives - and, as such, we should regard these as strategic domains in which there are advantages to be gained for the workforce and the demands of environmental movements (that is, if they develop stronger links and coordinate their activities). It is also useful to consider

what constitutes a sound basis for environmental responsibility in a 3 corporate context:

1 the construction of corporate policy on the environment that coordin- p

ates all the activities of the company, with measurable benchmarks g or targets against which success can be identified;


2 coordinated responsiveness to the task throughout the company, o including adequate environmental leadership, open deliberative and integrative mechanisms within all parts of the company and transparent dissemination when a policy is achieved;

flexibility to allow for innovation in all parts of the company and adequate resources to aid implementation (a key indicator that the company board and CEO are taking the issue seriously); understanding of the implementation of policy as a process rather than a static plan to accommodate improvements in internal corporate and external market and environmental knowledge.

One of the difficulties arises from different ways of thinking about 'ethical' and 'social' - for some, ethics covers both the organizational system and individual behaviour whereas, for others, ethics solely concerns the behaviour of members of the organization and is not relevant to the total impact of the organization's activities, impacts on stakeholders, and relevant constituencies. The latter provides a weaker basis for generating cultures of obligation. A key factor in ensuring accountability is the selection of appropriate performance indicators that match the objectives of the organization (i.e. in terms of its legally defined status and objectives) and the collection and analysis of relevant information while at the same time incorporating the aspirations of stakeholders (in part to ensure opportunities for revising both objectives and targets) by making sure that the methods are transparent, by measuring the scope of the audit, by providing quality assurance through specific auditors, and by communicating this information to all relevant parties. The AA1000 audit process involves the delivery of a social and ethical report that speaks to the objectives and targets while at the same time ensuring transparency to and seeking feedback from all stakeholders. The responsibility for this process is held by the governing body or committee of the organization in question, which may or may not include the stakeholders. In addition, stakeholders (including owners, trustees, employees, suppliers, partners or even customers, NGOs and public bodies) may have formal representation on the publicly recognized audit panel and/or be actually involved in the auditing process itself.

The ideological character of the debate on corporate responsibility and citizenship tends to polarize the two options of the corporate sector regulating itself voluntarily and the need for the state to regulate in a mandatory way. Each has positive and negative qualities. Self-regulation will work when it is genuine in both the operational and participatory sense but suffers from flaws when the company objectives produce decisions that bypass responsible actions. State regulation would work in situations where the political authorities have leverage over a company's decision-making processes but, in a global economy, if companies decide that regulations are onerous then capital flight leads to the redeployment of problems in other political as well as social and environmental spaces. Initiatives such as SA8000 and AA1000 are interesting developments for they offer practical ways to address these difficulties in the global supply chain and the externalities that result from the production, distribution and exchange of commodities. As a result, future research should focus on the intersections between intergovernmental, state and civil society initiatives as well as highlighting the potentialities for effective verification and more inclusive stakeholder consultations.

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