Time for a reality check: Is business willing to support a smart mix of complementary regulation in private governance?

Abstract

In recent years, scholars and policymakers have become interested in the idea of a smart mix of voluntary and regulatory measures in private governance. If public and private actors are to share the work load of governing the commons, this presupposes that both sides can agree on this compromise formula-but can they? So far, we have limited knowledge of firms and business associations' regulatory preferences in this realm. As a ground-clearing exercise my article aims to help fill this gap and expose some of the underappreciated fault and conflict lines within private governance. Its thrust is that existing literature is excessively optimistic about business's willingness to support regulation. The article surveys the EU's non-financial disclosure Directive and half a dozen other attempts to regulate CSR or non-financial disclosure across the world, and finds that public authorities' more ambitious attempts at regulation met with vigorous business opposition. Even after the financial crisis, most business associations and firms reject a smart mix in favor of voluntarism and soft law without hard sanctions.

The European regulation of corporate social responsibility: The role of beneficiaries' intermediaries

“…2004). Yet rather surprisingly, and despite strenuous opposition from targets and their intermediaries (Kinderman , ), some important CSR reforms were adopted by the EU, as well as certain member states, between 2009 and 2017. Analyzing the data regarding the activities of ECCJ, Eurosif, and their members, we have been able to explore the micro‐dynamics that have characterized this transition from the perspective of BIs.…”

“…Key steps in this process were the definition of corporate responsibility (European Commission 2002) and the creation of a European Multi-Stakeholder Forum on CSR (EMSF), active between 2002 and 2004. As already analyzed in the literature, this regulatory process failed to deliver any major progress and was eventually manifestly captured by the regulatory target, large companies (de Schutter 2008; Ungericht & Hirt 2010;Kinderman 2013Kinderman , 2016. The second cycle followed the outburst of the global financial crisisaround 2009and has been characterized by a stronger willingness to move away from business self-regulation .…”

Introduction to the Special Issue: Public and Private Labor Standards Policy in the Global Economy

“…Similarly, existing studies look at various stages of policy making processes when it comes to interactions between public and private regulatory policies (Bartley et al. ; Kinderman, , ; Toffel et al. ), but it is also not clear to what degree these interactions may be idiosyncratic for the particular stage in the policy process analyzed.…”

“…Figure illustrates four phases of the policy making process in the making of both public protections (the upper process in the Figure) and private protections (lower process) on which different entries in this Special Issue focus: the stage where individuals and interest groups develop their preference for public or private policies for protecting labor (as evidenced by the Burgoon and Fransen article); the stage where a particular public or private policy is formulated and negotiated and different parties try to influence the evolution of policies (as discussed in the articles by Knudsen, and LeBaron and Rühmkorf; cf. Kinderman, ); the stage in which a policy is implemented (as analyzed prominently in the articles by Anner, and also by Marx et al); and the stage in which the policy is supposed to have its actual effect – whether that is directly on workers affected, or on intermediary parties that should advance worker rights (as discussed in articles by Lim and Prakash, Anner, Knudsen, and Lebaron and Rühmkorf; cf. Toffel et al.…”

“…Existing literature focused on a particular instance of public and private regulatory interaction is not always clear, for instance, on the degree to which such interaction is relevant only to a specific labor issue being regulated, or to a particular labor policy or regulatory instrument analyzed. Similarly, existing studies look at various stages of policy making processes when it comes to interactions between public and private regulatory policies (Bartley et al 2015;Kinderman, 2012Kinderman, , 2016Toffel et al 2015), but it is also not clear to what degree these interactions may be idiosyncratic for the particular stage in the policy process analyzed. Perhaps due to the relatively early state of research into public and private interconnections, we know very little about such delimiting conditions, or what might constitute the boundary conditions, for public and private interaction in the protection of labor and social standards.…”