Corporate Social Responsibility and Governance

CSR involves the management of a corporation using the resources of that corporation to promote the welfare of non-shareholders (disadvantaged members of the community, the global poor, animals, future generations, etc.). In some cases CSR is used as a tactic to augment the competitive strength of a firm. We can call this “instrumental CSR” or “shared-value CSR”. This is where promoting non-shareholder welfare is seen as the best way of maximising shareholder value in the long term. In other cases, however, promoting the welfare of non-shareholders may be expected to compromise the economic interests of shareholders to some extent; one group benefits at the expense of the other. Call this “zero-sum” CSR. If we accept the so-called principle of shareholder primacy, Zero-Sum CSR appears morally problematic. This principle says that shareholders have a unique and privileged moral status in the corporation. More specifically, it says that shareholders, in virtue of their special relationship with management, are entitled to have the corporation governed in a way that is aimed at maximising their economic interests. My aim is to carefully distinguish three argumentative strategies for reconciling Zero-Sum CSR with the moral rights of shareholders.

Facing these difficulties, I argue in my paper that not only does CSR cohere better with the Aristotelian conception of morality, grounded in phronesis, than with others normative ethical theories, mainly utilitarianism or Kantian deontology, but also that under Aristotelian ethics CSR is at the heart of an agent’s practice in corporations.

Cultural diversity is tacitly regarded nowadays as the bane of efforts to internationalise criminal law (Thomas Nagel, Philosophy and Public Affairs 33: 113–147, 2005) or to globalize even the most rudimentary principles of corporate social responsibility [CSR]. In this essay it is proposed, to the contrary, that cultural diversity is best regarded as a vehicle for discovering fundamental convictions about the possibilities for a trans-national meaning of economic justice rather than the main obstacle to its realisation. Guidance is taken from principles of indigenous models of good governance and diplomacy that characterise contemporary West Africa’s rich cultural diversity and which alleviate the severe economic pressures of its many histories. The possibility of global economic justice requires a conceptual change: from defining global justice as a fixed system of uniform procedures and implacable rules applied impartially and universally, to regarding the very idea of justice as the outcome of moral contestation. Global economic justice as an ideal is treated here as a collective and necessarily incompletable work in progress, emerging by ongoing rigorous analytic confrontation internationally between divergent traditions and contrary value systems. Focus will be on correcting shortfalls in the assumptions sustaining the recent history of international human rights documents, and proposals offered in the discourse of transnational corporate social responsibility theorists. Since cultural diversity obtains within social hierarchies just as aggressively as it does across nations, testimonies are required early in the process of treating global justice as an ongoing deliberative project, so that judicial interpreters come to know something about underclass experience and conditions prevailing in the informal economic sector as it expands worldwide.