From Corporate Social Responsibility to Corporate Accountability and

From Corporate Social Responsibility to Corporate Accountability (and Beyond? ) Darryl Reed Business and Society Program York University dreed@yorku. ca Paper presented at the Conference “Advancing Theory in CSR: An Intercontinental Dialogue” Montreal, Quebec October, 2006

Corporate Social Responsibility vs. Corporate Accountability n Two Approaches to CSR ¨ as normative and strategic analysis of why corporations should adopt CSR (or not) ¨ as a policy regime n Corporate Accountability (CA) ¨ critiques n n n of CSR as a policy regime the ability of corporations to effectively address problems many issues should not be voluntary (eg labour standards) the function of CSR in legitimating a neo-liberal order

Corporate Accountability (cont. ) n CA as a social movement sees a need to move from voluntary measures to a framework that ensure answerability, enforceability and universality of application ¨ focues on a range of issues (labour rights, environmental standards, political influence, etc. ) ¨ employs a range of strategies ¨ n n boycotts, buycotts, protests, negotiations, soft law, use of national and international courts, etc. The Importance of Critical Theory for CA ¨ ¨ ¨ positive analysis – systems and lifeworld analysis normative analysis – three realms of normativity strategic analysis – dynamics of structure and agency

The Positive Analysis of CSR n Habermas ¨ two types of social reproduction n systems (instrumental reason) n lifeworld (communicative reason) n and reason Cox ¨ world orders and their n production relations n forms of state n international systems components

Positive Analysis (cont. ) n Contributions ¨ understanding of systems logic n how it virtually precludes serious stakeholder discourse ¨ understanding corporations n n is constituted can be exercised across different structures and realms ¨ ¨ n of how the structural power of colonization of the bureaucratic apparatus colonization of the lifeworld (public and private realms) is reinforced through its establishment of an ideological position

The Normative Analysis of CSR n CT and normative analysis ¨ grounded in discourse theory ¨ three realms of normativity n n ethics, morality, legitimacy Two important roles for CT in CA analysis ¨ distinguishing most important areas to focus n ethical issues less enforceable n morality and legitimacy primary areas of concern on ¨ normative critique of CSR as a policy regime n the basic illegitimacy of the CSR policy regime n the basic illegitimacy of the neo-liberal world order (which it seeks to legitimate)

The Strategic Analysis of CSR The case for CSR being able to function as an effective policy regime presupposes one of the following conditions: 1) Exercise of adequate Moral and Ethical Resources n ¨ business doesn’t give priority to “ethics” n n ¨ ideological reasons systems constraints levels of moral and ethical resources lacking n n within firms wider societal problem 2) A Business Case for CSR ¨ reliance on pragmatic motivation n n in cases of unequal power dynamics, inevitably leads to arbitrage resulting in green washing, blue washing etc. the structural power of corporations (especially under a neo-liberal order promoting a CSR regime) ensures such unequal power dynamics exist

Types and Characteristics of Motivation Types of Decisions Characteristics Type of Motivation Demands on Agents Pragmatic Ø the pursuit of self-interest in the narrow sense of the term (egocentric) Ø situations where the goal of our actions is given Ø makes only the weakest of demands upon agents Ø at most requires exercise of prudence (subordination of short term interests to long term interests Ethical Ø the value-oriented assessment of ends Ø not completely dissociated from the ego Ø involves the striving for self-realisation (identity) Ø Moral Ø ability to act upon moral obligations that represent generalisable interests Ø not tied to our ego Ø involves resoluteness and the ability to act upon the demands of authenticity Ø can require significant sacrifices (beyond prudence) requires autonomy - will which has completely broken from an egocentric perspective (Kant)

Conclusion n The Need for Accountability The state has traditionally filled the role of imposing accountability on corporations ¨ Critical theory helps us understand ¨ n n n why the state no longer functions in this way why we cannot expect corporations to act in an accountable manner why it is important that new methods for imposing accountability be developed the conditions that are likely to favour the imposition of accountability on corporations (communicative control) Moving Beyond Corporate Accountability? ¨ three ways of moving beyond corporate accountability n n n moving from CA as an exclusively civil society strategy to the use of the state moving to “capital accountability” (more engaged owners) Moving to alternative (social economy) business arrangements