From Corporate Social Responsibility to Corporate Accountability (and Beyond?)

1. 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

2. Corporate Social Responsibilityvs. Corporate Accountability • Two Approaches to CSR • as normative and strategic analysis of why corporations should adopt CSR (or not) • as a policy regime • Corporate Accountability (CA) • critiques 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

3. Corporate Accountability (cont.) • 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 • 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

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

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

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

7. 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 • business doesn’t give priority to “ethics” • ideological reasons • systems constraints • levels of moral and ethical resources lacking • within firms • wider societal problem 2) A Business Case for CSR • reliance on pragmatic motivation • 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

8. Types and Characteristics of Motivation

9. Conclusion • The Need for Accountability • The state has traditionally filled the role of imposing accountability on corporations • Critical theory helps us understand • 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 • 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