Reading Essay # 3 - Conley and Williams (2005)

The article indicates the beginning of "corporate social responsibility" (CSR)

movement that was the most important development in business world. The
authors of this article have employed the techniques of anthropology and linguistics
to assess the behavior of corporations, NGOs, and other principals who contributes
to this worldwide movement to improve the social and environmental strategies of
multinational companies. While, on a theoretical level, the article interprets the
corporate social responsibility movement as an exercise in the new governance (the
new governing paradigm) which is a term to describe a recent trend toward
spreading regulatory authority between governmental agencies, NGOs, and
regulated companies themselves. On this level, the responsibility of a corporation
extends beyond typical objective of generating money for shareholder. The
advocates of CSR emphasized that the reasonable concerns of a corporation should
include broader objectives such as "sustainable growth, equitable employment
practices, and long-term social and environmental well-being" (Conley and William,
2001, p. 2). Corporate managers should not only favor the shareholders but also
consider their stakeholders (i.e. employees, residents of that community,
government, organizations favoring social and environmental interests) while
making decisions.
The CSR movement became obvious and prominent in several ways. On legal
side, even this movement left limited impacts on country. However, Enron and
related disasters helped in making transparent corporate conduct especially in
financial matters. While in Europe and the United Kingdom, CSR movement became
a big reason in moving corporate disclosure in stakeholders' favor. There was a
great awareness regarding stakeholders' interests in continent. Several European
countries started to pay direction attention on stakeholders' interests through highly
great disclosure of social and environmental threats and effects. Countries with
most expensive disclosure regulations were the countries where the stakeholder
concept of a firm became prominent, those countries includes France, Germany, the
Netherland, Belgium, Norway, Denmark, and Sweden. At the European Union level,
even the development was not that great but this trend did not change its direction.
Moreover, EU's own shift towards the mandatory disclosure clearly indicates the
European penetration of the stakeholder concept.
United States (US) and the UK share some corporate law values such as
broad based dispersed share ownership as compared to Europe and Japan. The CSR
movement gave birth to another new code regarding the disclosure of
environmental and social issues. According to that code, the British companies were
required to publish an annual operating and Financial Review and Directors Report
(OFR). According to the OFR, the companies were required to reveal social and
environmental risks. However, the Blair government removed that regulation later
on.
The CSR movement can be seen as a voluntary behavior of the corporation,
especially in the area of reporting. A large number of firms started to report their
social and environmental issue. Corporations started to publish social and
environmental sustainability reports, which combine social, environmental, and
financial information in addition to their financial reports. Most of the corporations
that were issuing such reports also changed their ways of interaction with their
stakeholders, especially the non- governmental organizations (NGOs). This article
evaluates and indicates the participation of multinational companies in this global

movement to improve the social and environmental behaviors. As a representative

from a leading British scientific research organization put it in a recent interview,
"multinational businesses have had to respond to a changing paradigm"(Conley and
William, 2001, p. 5). Later on, everyone can see the engagement and partnership
with NGOs that are trying to help corporations to identify issues, produce and audit
reports, communicate with stakeholders and address their issues throughout the
world. The authors believe that even there is a critical question whether these
developments are just corporate communication, and the new behaviors demanded
by CSR advocates are amount to substance or mere form. However, multinational
companies have significantly changed their ways of operations over the last
decade. The contemporary CSR community was come into existence due to the
participants of changing paradigm. They have a new class of CSR professionals
within for profit corporations, in addition to them there is another class of outsiders
who audit non financial reports; executives at pension funds, insurance companies
and institutional investment organizations who believe in socially responsible
investment.
The CSR movement can be taken as new governance and the new governing
paradigm. However, the new governance theory is complicated and its framework is
not developed fully. A vital formulation element is the idea of post regulatory state.
According to Colin Scott, the prior concept of the regulatory state was developed to
contrast a distinctive and emergent form of governance from the practices and
institutions of the welfare state (Conley and William, 2001, p. 31). While the welfare
state was described by the dependency on instruments of public ownership, direct
state provision of benefits and services, [and] integration of policy making and
operational functions"(Conley and William, 2001, p. 31). A regulatory state occupies
the concept of separation of operational from regulatory actions in some policy
areas. The regulatory state asserts on top-down command and authority, however,
it exercises its power in a diffuse manner. The post regulatory state has indicated an
incline from government to governance that is a further diffusion of regulatory
power between state and non state actors.
The CSR movement can be seen as emerging governance due to a large
global information network. The new governance has some critics too; a major
concern is democratic accountability. The debate is that the nodes of decision
making become numerous, less defined, and harder to locate, they are away from
people and institutions are under direct electoral control. But the advocates of
network governance proponent claim that the process will eventually improve
democracy.
I am doubtful about the actual success of CSR movement as the authors of
this article had tried to collect large amount of information on CSR movement.
However, they could not reach at a final conclusion whether that movement is
actually succeeding or not? That is why, their conclusion is mixed. No doubt, the
CSR movement has definitely brought more transparency to the non-financial
performance of large corporations; it also taught and helped corporations to handle
criticism and debates which ultimately helped them to enhance their power.
However, there are some major concerns regarding new governance that are
difficult to manage especially the problems regarding representation and
accountability. I believe that CSR movement is still progressing; it advocates
ensuring such decision makings where corporate mangers consider and deal with
social and environmental issues. But unfortunately, some times, it just serves as a
complex public relation charter and nothing else, and companies continue to

operate their businesses as usual. I believe at this stage, it is difficult to say

something about the future of CSR movement because this movement is still under
continuous progress, but we are hopeful.
Conley, M.J. & Williams, A.C. (2005).Engage, embed, and embellish: Theory Versus
Practice in the Corporate Social Responsibility Movement. UNC Legal Studies
Research Paper, 05 (16), 1-38.