October 22, 2012, by ICCSR

Expanding the Sphere of Political CSR

The CSR policies and practices of MNCs often have a distinctly political feel. Amongst other things, they commonly contribute to (or undermine) human rights, and to the development of institutions that subsequently shape their activities. Whilst such political activities have been subject to considerable analysis from CSR scholars, in my just published Business Ethics Quarterly paper, ‘The Political Perspective of Corporate Social Responsibility: A Critical Research Agenda’, I suggest they have only been telling part of the story.

Critically, the paper suggests that political CSR scholars have tended to focus on an idea that is currently unrealistic in practical terms: i.e. the idea that the governance of MNCs should be made increasingly democratic so as to ensure that their CSR policies and practices are legitimate. In short, I suggest this idea is unrealistic because it would, in all likelihood, conflict with the economic interests of MNC financiers (e.g. shareholders). Further, I suggest that the idea of an increasingly democratized MNC is largely inconsistent with leading edge moral and political-economic theorizing. Amongst other things then, I highlight that a significant ‘division of labour’ between states (who concentrate on broad political goods) and MNCs (who concentrate on narrower economic goods) is commonly considered best practice on moral, political and economic grounds.

Interestingly, MNCs sometimes engage in activities that seek to bolster just this ‘division of labour’. Members of the Global Business Leaders Initiative on Human Rights for example, have lent their support to the ‘Protect, Respect and Remedy’ framework underpinning the United Nations Guiding Principles on Business and Human Rights. This framework’s development was overseen by Professor John Ruggie of Harvard University, and attributes the primary duty to protect human rights, and remedy their abuse, to nation-states. On the other hand – and in recognising that MNCs are not democratic public interest institutions, but rather, economic organizations – it suggests that MNCs should concentrate (somewhat more narrowly), on respecting human rights and ‘doing no harm’.

Further to detailing this perspective (which primarily draws on the work of Habermas, and is consistent with the notion that human rights are universal), I identify another perspective on political CSR in which human rights are conceived in a less expansive, and less universal, fashion. This other perspective primarily draws on the work of John Rawls, and suggests that a key concern for MNCs, who are once again conceived as primarily economic actors, is to respect the sovereignty of all the ‘decent’ (and not necessarily democratic) societies within which they operate. As a result, many are likely to consider it undesirable (e.g. human rights activists). Nevertheless, it is a perspective that is arguably consistent with the actual practices of many MNCs. Further, and more speculatively, it is a perspective that appears aligned with the interests of various (re-)emergent world powers: e.g. China and Russia. In light of such, and as I suggest in concluding my paper, both scholars and practitioners of CSR live in interesting times.

By Dr Glen Whelan, Lecturer in Business Ethics at the International Centre for Corporate Social Responsibility.

Image by visionshare reproduced under creative commons license CC BY-NC-SA 2.0 Source:  http://www.flickr.com/photos/visionshare/6145534180

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