A selection of interesting articles we came across recently on stakeholders and sustainability.
What do you do if you can’t involve stakeholders in accounting & management?
According to Anselm Schneider, in order to enable firms to successfully deal with issues of corporate sustainability, the firms’ stakeholders would need to participate in sustainability accounting and management. In practice, however, participative sustainability accounting and management are often unfeasible. The resulting consequence is the risk of misbalancing single aspects of sustainability.
The purpose of this article is to show that reflexivity in sustainability accounting and management, that is, an ongoing reflection on the relationship between the goals of corporate sustainability and the overarching objective of sustainable development can, at least, mitigate this problem. Reflexivity has the potential to initiate processes of collective learning and could eventually bring about the realisation of business models that integrate economic, ecological, and social considerations.
More details at: Anselm Schneider. 2015. Reflexivity in Sustainability Accounting and Management: Transcending the Economic Focus of Corporate Sustainability.
Journal of Business Ethics, 127(3), 525-536.
Is a strategy of enlightened shareholder maximisation achievable?
The role of a corporation is often debated as a mutually exclusive choice between economic responsibility to shareholders and social responsibility to society. An evolving viewpoint embraces an integrated approach focused on long-term value creation for shareholders, which benefits other stakeholders. Pamela Queen argues that maximising long-term shareholder value as a corporate objective can be compatible with stakeholder theory when an enlightened shareholder maximisation strategy is embraced. Firms implementing an enlightened shareholder maximisation strategy are expected to make decisions and use resources that achieve long-term value-creating outcomes.
However, critics of enlightened shareholder maximisation as a corporate goal contend that this strategy conflicts with maximising shareholder value. Queen explores whether firms that embrace a balanced enlightened shareholder maximisation strategy indeed create long-term value, which does not sacrifice shareholder wealth.
Read further in Pamela E. Queen. 2015. Enlightened Shareholder Maximization: Is this Strategy Achievable?
Journal of Business Ethics, 127(3), 683-694.
Employee stakeholders and environmental performance
Drawing on the natural-resource-based view (NRBV), Elisa Alt and her team propose that employee stakeholder integration is linked to environmental performance through firms’ proactive environmental strategies, and that this link is contingent on shared vision. They tested their model with a cross-country and multi-industry sample.
In support of their theory, results revealed that firms’ proactive environmental strategies translated employee stakeholder integration into environmental performance. This relationship was pronounced for high levels of shared vision. Findings demonstrate that shared vision represents a key condition for advancing the corporate greening agenda through proactive environmental strategies. Alt and her co-authors discuss implications for the CSR and the environmental management literatures, with a particular focus on the NRBV and stakeholder integration debates.
For details see: Elisa Alt, Emilio Pablo Díez-de-Castro and Francisco Javier Lloréns-Montes. 2015. Linking Employee Stakeholders to Environmental Performance: The Role of Proactive Environmental Strategies and Shared Vision.
Journal of Business Ethics, 128(1), 167-181.
Stakeholders influence social disclosure quality in Taiwan
Tzu-Kuan Chiu and Yi-Hsin Wang adopted a stakeholder theory framework to examine determinants of social reporting quality and empirically test the ability of the theory to explain disclosure quality in an emerging economy. Using a 246 listed companies and a hand-collected dataset that included 2 years of data based on survey questions reflecting international disclosure trends, the authors apply an aggregate measure of quality with five facets to a variety of corporate social responsibility areas.
The results support the application and demonstrate that measures of stakeholder power, strategic posture, economic resources, firm size, and media visibility are related to social disclosure quality. This paper adds to the scarce evidence on social reporting in Taiwan and provides a useful method for evaluating disclosure quality. It also illustrates the impact of two dominant foreign stakeholder groups on social disclosures in Taiwan: (1) organizational buyers in the global supply chain and (2) listing and social rating agencies in international capital markets.
More information is at: Tzu-Kuan Chiu and Yi-Hsin Wang. 2015. Determinants of Social Disclosure Quality in Taiwan: An Application of Stakeholder Theory.
Journal of Business Ethics, 129(2), 379-398.
Private sector as stakeholder in environmental regulations
The private sector plays an active role in implementation of mechanisms concerning the mitigation of climate change. In spite of that, the corporate actors play a limited direct role in international arenas when it comes to negotiating the design of climate and energy regime. The climate and energy governance in the United Nations system remains mostly state-centric, but the active participation of corporate actors in negotiation of climate and energy regimes is essential to increase the effectiveness of their governance.
Business is not just a subject of a regulatory climate and energy imposed by the state; rather, business is an intrinsic part of the fabric of climate and energy governance, as “rule-maker,” particularly in the many voluntary regimes. However, the architecture in place should guarantee that the private sector does not highjack the decisions and its positions are balanced by other non-governmental actors in the process. This article analyses the role that the private sector can play in the global climate and energy governance. The private sector does not only play a “rule taker” role in the climate change and energy regime. Indeed, they are not passive observers as they influence through indirect means.
The results suggest that the private sector is able to play a key role in global climate and energy governance based on the principle of multi-stakeholder participation in global decision-making, but the architecture should be able to balance the goods and bads of private direct influence in international regimes.
Read more at: José Célio Silveira Andrade and José Antônio Puppim de Oliveira. 2015. The Role of the Private Sector in Global Climate and Energy Governance.
Journal of Business Ethics, 130(2), 375-387.
CSR and stakeholder management
John Cantrell, Elias Kyriazis and Gary Noble draw upon the emerging view of strategic cognition and issue salience and show that CSR giving has evolved into more than an altruistic response to being asked for support, to one which is embedded in the strategic frames of management and which supports organizational identity. The managerial action as a result of such strategic cognition suggests that modern organizations are seeking to develop CSR giving processes that provide them with a competitive advantage.
The authors draw on the resource-based view of organizations and the VRIO framework to provide the theoretical foundations for their argument that CSR implementation in the form of corporate giving to charities can be developed as a dynamic capability. This can provide a competitive advantage by allowing organizations to manage key stakeholder relationships (external and internal) more effectively with benefits which could lead to increased organizational productivity and the ability to execute strategy more effectively.
The authors interview CSR implementation managers from large organizations in Australia and find that the CSR giving process in many firms is evolving into a more sophisticated and strategically motivated process with expectations of a return. Central to this evolution is the appointment of a CSR implementation manager who acts as a boundary spanner between the organization and its key stakeholders. The authors posit that this corporate investment in their role and supporting structures can lead to the better management of stakeholders by organizations through the dynamic capability of the CSR giving process. They develop a table of best practice to help guide managers entering this sphere.
See the full paper at: John Ehsman Cantrell, Elias Kyriazis and Gary Noble. 2015. Developing CSR Giving as a Dynamic Capability for Salient Stakeholder Management.
Journal of Business Ethics, 130(2), 403-421.