Cecilia Chirieleison University of Perugia

1. Cecilia ChirieleisonUniversity of Perugia NGOs and CSR: which strategies to become critical stakeholders? Cecilia Chirieleison University of Perugia Corporate and Stakeholder Responsibility. Theory and Practice Milan, 22-23 May 2008

2. NGOs and CSR: which strategies to become critical stakeholders? • Growing interest of NGOs for the business: attempt to improve environmental and social context by influencing the level of CSR • In the perspective of the stakeholder theory, are NGOs able to be critical stakeholders? • Mitchell et al. (1997): legitimacy , urgency and power • NGOs often don’t have the power to directly influence the firm’s financial and competitive performance • The indirect strategies (Frooman, 1999): NGOs acting through an ally that can threaten to withhold its resources • Traditionally two main stakeholders targeted: the national government and the consumers Cecilia Chirieleison University of Perugia Corporate and Stakeholder Responsibility. Theory and Practice Milan, 22-23 May 2008

3. NGOs and CSR: which strategies to become critical stakeholders? • The government • Different objectives of the NGO’s lobbying activities: • Enforceable national and international legal obligation directly imposing social standards or disclosure to the corporations • Regulation indirectly persuading the corporation to adopt higher CSR standards strengthening or influencing other stakeholders (unions, consumers associations, institutional investors, etc.) • In general NGOs are quite weak in influencing the public policies • Government’s action tend to be less effective because of globalization • The MNCs escape both the international e the national law • The consumers • Documentation of abuses and moral shaming are useful only if they really influence consumers behaviour • Consumers’ action has demonstrated to be often too weak • Consumers are in general not very interested and informed about CSR and have a short memory • Only few successful boycotts Cecilia Chirieleison University of Perugia Corporate and Stakeholder Responsibility. Theory and Practice Milan, 22-23 May 2008

4. NGOs and CSR: which strategies to become critical stakeholders? • Emerging influencing strategies. In search of others stakeholders-allies: shareholders and executives • The shareholders: they own an essential resource and can choose the exit option • Different tactics used: • Shareholder activism (NGOs become shareholders) • Partnership whit SRI; collaboration in social and ethical screening • Persuasion of traditional institutional investors to adopt a social screening by emphasizing financial risks associated with social and environmental poor performance Cecilia Chirieleison University of Perugia Corporate and Stakeholder Responsibility. Theory and Practice Milan, 22-23 May 2008

5. NGOs and CSR: which strategies to become critical stakeholders? • The executives: from confrontational strategies to engaging and collaborative strategies • Support in voluntary CSR and advocacy of social accounting and independent verification schemes: versus self-compliance • From the CRM to the cooperation in dealing with firm’s specific social and environmental issues • The collaboration between NGOs and business in defining higher standard in case of absence or insufficient regulation of global social issues: versus a “civil regulation” (the Forest Stewardship Council) • Engagement NGOs need the confrontational ones demonstrating to be able (even in a few cases) to damage the corporate reputation and the brand name (CorpWatch) • The interaction with the mass-media: visibility only for few big NGOs Cecilia Chirieleison University of Perugia Corporate and Stakeholder Responsibility. Theory and Practice Milan, 22-23 May 2008

6. NGOs and CSR: which strategies to become critical stakeholders? • The effectiveness of the NGOs strategies and the core resources: funds, legitimacy and information • Fund rising and dimension’s growth: the ability to intervene on global issues requires global dimensions • Private and public donors • The risk of conflicting interests when engaging with the business (NGOs “selling” legitimacy for subsidizing: greenwash and bluewash) • The public subsidizing and the autonomy in defining objectives and ways of intervention • Trade-off between dimensional growth and maintenance of independency? • In search of new instruments to protect independency (Charity SRI: donor and partner screening) • The maintenance of the legitimacy • The legitimacy of the claims: a cost/benefit evaluation (i.e. child labor vs. prostitution) • The cultural legitimacy: the ethical hegemony of the Northern NGOs • The internal legitimacy: the need for improving governance and democracy (which accountability for the NGOs? Who is the “principal”?) • The legitimacy of the reputation: the violent no-global movement Cecilia Chirieleison University of Perugia Corporate and Stakeholder Responsibility. Theory and Practice Milan, 22-23 May 2008

7. NGOs and CSR: which strategies to become critical stakeholders? • The information as strategic resource: the influence on the stakeholders-allies depends on the ability to obtain, process and diffuse information • Obtaining information • The ability to understand the corporate social disclosure • The ability to show “double standards” and to obtain information about the MNCs operations in the developing countries: the role of the Southern NGOs and the transnational networks • Processing information • The screening to verify information’s reliability • The NGOs reputation depends on the quality and the trustworthiness of the information they provide • The reputation of the partners for the reliability of the information • The importance of the relationship with an international scientific network • Combining pieces of information to turn them in a global message • Diffusing information • Only few and well known NGOs can access the mass media to obtain a global resonance • To carry information to the others stakeholders Cecilia Chirieleison University of Perugia Corporate and Stakeholder Responsibility. Theory and Practice Milan, 22-23 May 2008

8. NGOs and CSR: which strategies to become critical stakeholders? • The needs to develop new competences to engage with shareholders, executives and others NGOs • Competences in processing accurate information in a global context and in communicating with mass media and other stakeholders • Competences in scientific fields to engage with scientists • Competences in finance and in CSP measurement to engage with shareholders • Competences in management to engage with executives • Competences to improve NGOs governance and accountability • Competences in promoting and managing transnational networks between NGOs (specially Northern and Southern) and with other private and public actors • How to develop new competences without loosing ethical value (professionals or volunteers?) Cecilia Chirieleison University of Perugia Corporate and Stakeholder Responsibility. Theory and Practice Milan, 22-23 May 2008