Embedding Corporate Social Responsibility in Corporate Governance: A Stakeholder Systems Approach

Abstract

Current research on corporate social responsibility (CSR) illustrates the growing sense of discord surrounding the 'business of doing good' (Dobers and Springett, Corp Soc Responsib Environ Manage 17(2): 63-69, 2010). Central to these concerns is that CSR risks becoming an over-simplified and peripheral part of corporate strategy. Rather than transforming the dominant corporate discourse, it is argued that CSR and related concepts are limited to ''emancipatory rhetoric…defined by narrow business interests and serve to curtail interests of external stakeholders.'' (Banerjee, Crit Sociol 34(1):52, 2008). The paper addresses gaps in the literature and challenges current thinking on corporate governance and CSR by offering a new conceptual framework that responds to the concerns of researchers and practitioners. The limited focus of existing analyses is extended by a holistic approach to corporate governance and social responsibility that integrates company, shareholder and wider stakeholder concerns. A defensive stance is avoided by delineating key stages of the governance process and aligning profit centred and social responsibility concerns to produce a business-based rationale for minimising risk and mainstreaming CSR.

Stakeholder mapping of CSR in Switzerland

“…Perceiving CSR as a business opportunity raises criticism, such as that CSR is only an "emancipatory rhetoric" (Banerjee, 2008) that serves to secure the interests of key beneficiaries (Mason and Simmons, 2013) by "instrumentally manipulating and deploying evocative symbols in order to gain societal support" (Suchman, 1995). Comparably, Castelló and Lozano (2011) showed that CSR is often considered "simply a façade" and only a mean of strategic rhetoric in search for legitimacy based on the company's economic rationale, although they found some trends towards more "moral" and more quality in stakeholder dialogues.…”

“…Consequently, Freeman's (2010) power-interest grid is a tool too broad for analysing and prioritising stakeholders with respect to this research's purpose. Furthermore, as Mason and Simmons' (2013) stakeholder systems model of CSR demonstrates, board decisions to react on stakeholder claims and agendas are strongly shaped by stakeholder salience and legitimacy. Similar to this paper, Mason and Simmons (2013) also undertake a holistic approach to CSR that integrates not only shareholder interests but also wider stakeholder concerns by identifying stakeholder groups that seek recognition for their CSR claims.…”

Sustainability and Convergence: The Future of Corporate Governance Systems?

“…The shareholding structure (i.e., dispersed or concentrated ownership) and the rules concerning corporate administration and control have determined the traditional distinction between outsider and insider systems of corporate governance. In both, the board of directors of sustainable companies is entitled to set corporate goals and strategies in accordance with the need for balancing the interests of key stakeholders [7][8][9][10]. Furthermore, the board's commitment to sustainability is crucial for sharing the same culture throughout the entire organization, going beyond the logic of compliance, towards a real passion for sustainability [11].…”

Responsible Corporate Governance in Europe

“…Such businesses are usually larger; belong to higher profile industries; and are highly leveraged. Mason and Simmons (2014) suggested a holistic approach to corporate governance and social responsibility that integrate companies, shareholders and wider stakeholder concerns. They argued that this is attainable if companies delineate key stages of the governance process and align their profitcentres and social responsibility concerns to produce a business-based rationale for minimising risk and mainstreaming CSR.…”