Corporate citizenship: implications for business, citizens and governments

Transcription

1 Corporate citizenship: implications for business, citizens and governments Jeremy Moon Gourlay Professor of Ethics in Business Trinity College, University Melbourne Balanced Enterprise Research Network University of Sydney Business School 25 November 2013

2 Introduction Philanthropy for Business Ethics... John and Louise Gourlay and family Gourlay Professorship for Ethics in Business Trinity College, University of Melbourne

3 Introduction Citizenship may not be controversial for entrepreneur, family business, partnership, cooperative, social enterprise Corporate purpose problems Friedman s CSR critique: profits as responsible; accountability Corporations as acquisitive / anti-social Corporatization of the political Corporate globalization strategies

4 Introduction More generally: Citizenship is a human concept Citizenship is a metaphor However... Will argue that Citizenship is helpful Assume more than synonym for CSR re political roles of corporations

5 Outline Business-society problems persist despite Corporate Social Responsibility (CSR) Corporate citizenship may help Suitability of corporations for citizenship Model of Corporate Citizenship - extended How? Challenges?

6 Achievements of CSR CSR assumed status as a management concept: reflected in board, staff, budgets, processes, reporting Regarded as in business interest: legitimacy, efficiency, innovation Engaged with resp investment & consumer movements; civil society & govt Brought bus resources to social challenges Brought new forms of accountability

7 Achievements of CSR Standards e.g. investing, reporting, transparency, sustainable sourcing, labour Partnerships e.g. local economic development, ethical trade, risky products Multi-STK, mutual & co governance: e.g. supply chains, sourcing natural resources

8 Achievements of CSR Elephant in the CSR room Society perception of corporate selectivity i.e. Social & env contributions but silence on the political/ stressing bus case Most of the social / env are political Corp perception of lack of clear legitimate expectations; pol roles threatens hijacking of purpose; damned if do and damned if don t take more pol resp y

9 Problems illustrated Cynical e.g. tax minimisation Illegal transactions (re drug smuggling; Iran sanctions busting) Corrupt e.g. Libor fixing Lobbying is disconnected from CSR Exploitative e.g. Private monopolies / oligopolies & public goods Political risks e.g. Business & critical infrastructure

10 Problems illustrated Society expecting corporations to be more regulated? Banks: structures; liquidity; credit rules Remuneration (e.g. Swiss referendum)

11 In a nutshell Business and civil society relations are more alienated because: Key issues put business in place of govt / beyond govt Society expects business to act like ideal of govt (even-handed, accountable) Business is in the polity but this is not understood, conceptualised, no clear basis for assigning rights & responsibilities

12 Why citizenship? Don t we need more rules? Maybe Rules can be worked around Rules encourage diffidence Rules may inhibit innovation We need political roles of business to be institutionalized

13 Why citizenship? i.e. stable, valued recurring patterns of behaviour Based on agreed understandings of appropriate behaviour Mechanism for trust & engagement social mechanisms to sustain/ renew these (which may overlap with market and regulatory mechanisms)

14 Why citizenship? Human citizenship is understood: Good company citizen : rules & spirit; good of org Human citizenship brings clarity on: Status; Rights & responsibilities; participation Like trust, more it is used the stronger it gets: affirmation, used for protection/ opportunity, duty, participation

15 Corporations & metaphorical citizenship Metaphors are common for understanding and communication E.g. corpus : body or body of people Business uses metaphors: human face of AT&T; neighbour Critics use metaphors of business: machine ; psychopath

16 Corporations as human organizations Made by humans Human purposes Peopled Interactions are with humans: customers, investors, workers, communities Even natural environment interests are identified and spoken for by humans

17 Corporations as legal citizens Corporations have been accorded various legal rights and responsibilities akin to human citizenship (depending on system): To enter contracts; sue and to be sued Legal liability; corporate manslaughter Rights to freedom of speech

18 Corporations as political organizations Depending on systems, rights to: Form associations Lobby Participate in political campaigns Make national policy Constitutional status

19 Corporate Citizenship 3 relationships (CMM 2008) Being Cit; being govt; facilitating cit ship of others simultaneously / interactively Aristotle s citizen: governing & being governed 3 rd dimension is implicit in Aristotle, Mill & contemporary democratic theory re the development of the whole polity & deliberation (other voices)

20 Three views: (1) Corporations as citizens Government Political community as the arena of citizenship Corporation Citizen See Moon, J., Crane, A. and Matten, D. (2005) Can corporations be citizens? Corporate citizenship as a metaphor for business participation in society. Business Ethics Quarterly, Vol. 15: ; CMM (2008) chap 2

21 View 1 Corporations as Citizens Engaged in community governance with human citizens Judged by citizenship criteria: Pay taxes as if human citizens Political participation: self/social interest Corps more entailed in polity e.g. banks & IT corps re children & violent & pornographic content; NotW advertisers

22 View 1 Corporations as Citizens Govt to improve own accountability: e.g. lobbying transparency Human citizens more empowered: e.g. Lego & The Sun p3 girls

23 Three views: (2) Corporations as governments Government Corporation Political community as the arena of citizenship Citizen Matten, D. and Crane, A. (2005) Corporate citizenship: towards an extended theoretical conceptualization. Academy of Management Review, 30 (1): CMM (2008) chap 3

24 View 2 Corporations as Governments Delegated or filling vacuums or sharing.. Judged by dem govt acc y criteria Defining & administering labour & human rights, impacts on community members Re monopolies & public goods (energy, water) & vital infrastructure (financial & communication systems) Positive uses of taste forming power

25 View 2 Corporations as Governments Multi STK collaborations; social acc y need extending Governments need to improve accountability re delegated authority re privatized monopolies Human citizens need social gaze to be more effective: e.g. Switching banks Roles of govts; civil society; corps; professions

26 Three views: (3) Stakeholders as citizens Governing body of corporation Corporation as the arena of citizenship Employees Shareholders Suppliers Civil society Consumers Government Crane, A., Matten, D. and Moon, J. (2004). Stakeholders as citizens: rethinking rights, participation, and democracy, Journal of Business Ethics, 53 (1/2): CMM 2008 Chap 4

27 View 3 Corporations facilitating wider citizenship From CMM STK view to corporations facilitating wider citizenship Judged by restraint, facilitation deliberation e.g. IT corps provide infrastructure (social media) for political participation; debate; critique of corps (Greenpeace & Nestle re orang utans) Capacity building for NGOs / charities

28 View 3 Corporations facilitating wider citizenship Capacity building in development around supply chains (Sen) Pharma corps and collaborative projects for disease See in citizenship terms not just philanthropy (i.e. Fiscal and regulatory implications)

29 Corporations & Citizenship: possibilities Corporate Citizenship offers framework: 1.Reflects broad human aspirations 2.Familiar language & connotations 3.Core to membership of polity 4.Reflects broad terms on which most businesses want to be judged... Don t seek the uncitizenly epithet...

30 How do we get there? How to get corps to think of themselves/ operate as if they were citizens Civil society & govt & business to facilitate effective social gaze mechanisms View corporations citizenship relationships as a bundle of status, rights / duties, participation Rather than silo / not talk about

31 How do we get there? Connect political agendas with business agendas e.g. fair trade, SRI, public procurement Associations of business; bus leaders; CC professionals committed to mutual learning and engagement to develop those institutions

32 Adoption of CC Reclaim wider business purpose: basis for incorporation & limited liability To address the elephant in the room for CSR the political role of the corp To institutionalise corporate citizenship: frameworks and norms not just rules To enable public benefits of bus power To assist business in understanding expectations of their pol roles