A practitioner's reflections on the problems of shared value

After our article on shared value came out in the California Management Review, and we published our last blog piece summarizing our critique, we've had a lot of response from various academics and practitioners in the corporate responsibility field. In fact, we've probably had more emails, comments and calls on this one article than we've had on anything else we've ever published. It has clearly struck a nerve. In the main, these responses have been very positive, suggesting that a lot of people have just been waiting for an article like this to come out. Here's just a smattering of some of the responses we've received (you can also read the comments to our blog post for more):

"This is a long over due excellent and comprehensive critique on the overly optimistic and shallow CSV framework that doesn't really address the real trade offs required to get to sustainable development."

"Good on you for re-framing this topic in a manner that more fully reflects the spirit of corporate social responsibility."

"It is some of the most enjoyable reading I have done in a very long time."

"Just read you CMR paper on CSV - well done. It is about time that someone took this idea apart."

Of course, many commentators, even whilst being supportive of our critique, have also pointed out some of the pragmatic benefits of Porter and Kramer's approach, like this one:

"I can see how the win-win wonderland (in Mintzberg's words) could be a diversion, but I wonder how it might crack existing inertias, and/or if any positive momentum could be leveraged for fashioning a more complete framework."

Such considerations of the lifeworld of business is a theme that is addressed in the discussion we have with Porter and Kramer at the end of our article, but is not something that we fully elaborate on. With this in mind, we thought it worthwhile to post here one of the more thoughtful and extended responses we received from a corporate responsibility practitioner. This is from Rory Sullivan, a veteran of the responsible investment community, now working as an independent advisor as well as being a Senior Research Fellow at the University of Leeds. He explores some of our points with regard to how CSR and CSV might be seen from a practitioner perspective. We thought they deserved reproducing here as they help to frame an important element of the debate in a constructive way:

"A proper analysis of the concept and value of ‘Creating Shared Value’ has been needed for some time, and your article does an excellent job of setting out the strengths and weaknesses of CSV. I was disappointed that Porter and Kramer failed to engage with the substantive points that you raised; their bludgeon of a response seemed at odds with the nuanced and careful arguments you presented in your article. While I support the broad lines of argument and analysis in your article, I would like to offer some reflections from a practitioner’s perspective:

• Your discussion of “CSR as a Straw Man” is fair in its treatment of the academic literature (which has argued that CSR should be a corporate strategic priority). However, CSR in practice is quite different. In far too many companies, CSR continues to have limited business relevance (in terms of its influence on strategy or capital allocation) and remains far closer to philanthropy than the theoretical literature suggests (or would like).
• On the originality of CSV: Your review of the literature ignored the many important practitioner contributions (e.g. by John Elkington, Stuart Hart, CK Prahalad) which have influenced CSR in practice. I suspect that many practitioners see CSV as a glossy reformulation of ideas such as the triple bottom line, rather than as a new framing of the debates around the role of business in society.
• On the evidence for CSV: One of the key challenges faced by companies in practice is that ideas that work at a local level and at a small scale, may or may not work [in fact, they often don’t] when they are scaled up to the corporate level or when other companies try to replicate the experience. There are various reasons – the generalizability of approaches, the transaction costs, etc of moving to scale, the problems of taking projects and processes from one corporate culture and trying to implement them in another.
• I’m not convinced by your argument that CSV is based on a shallow conception of the corporation in society. My (personal) reading of the Porter and Kramer article was that it was best understood as an analysis of the corporation in society, where the corporation is taken as the central unit of analysis (perhaps akin to every western individual being at the centre of their own personal narrative). In that frame of reference (which, I accept may not be what they had in mind), the concept of CSV could be interpreted as simply an argument that there are things that companies can do to make them a little more useful to (or a little less harmful) to society."

Plenty of food for thought there. Any more practitioners out there want to throw their two cents in?

Photo by Ross. Reproduced under Creative Commons licence

Four big problems with "Creating Shared Value"

The idea of "Creating Shared Value" (CSV) popularized by Michael Porter and Mark Kramer in the Harvard Business Review has probably done more to get corporate responsibility issues into the boardroom than anything else written in the last few years. In many respects, that is a good thing. Or at least it is until you start to realize all the big problems that are hidden behind the big ideas of CSV.

We've just published (together with Guido Palazzo and Laura Spence) a comprehensive critique of CSV in the California Management Review. The published version features a response from Porter and Kramer and a counter response from us which we think makes for quite enlightening reading (you can also download a free, but slightly different, version of our article but without this dialogue over at SSRN).

Our article sets out four main problems with CSV:

1. It is unoriginal. 
Porter and Kramer simply don't acknowledge that there is little new about CSV. People have been writing about much the same thing for decades. And the corporate initiatives they rebrand as CSV are just attempts to relabel practices that were already going ahead prior to them publishing their article. It's just that some people call those practices "strategic CSR," "social innovation," or "stakeholder management."

2. It ignores the tensions between social and economic goals.
CSV is presented as "moving beyond trade-offs" between social and economic goals. But that is only because Porter and Kramer ignore any such trade-offs that might need to be made. Sure, there are some great opportunities where business success can be aligned with social progress. But there are also a whole host of social problems, especially those caused by business, where social and economic goals inevitably conflict. CSV prompts managers to simply ignore them.

3. It is naive about business compliance
In a move very much reminiscent of Milton Friedman's famous critique of CSR, CSV "presumes compliance with the law and ethical standards, as well as mitigating any harm caused by the business". Of course, this is where all those messy "trade-offs" are hiding. But as long as you can presume them away, then you don't have to deal with them. In fact there is only one sentence dedicated to social harms, ethical norms and legal compliance in their whole article. So, let's just ignore all the occasions when firms harm people or the environment. Let's ignore all all the times they fail to uphold some of the laws and ethical customs of the places in which they operate. Then we can talk about CSV. But let's not pretend that this is a useful strategy for corporate responsibility or still less a sane way to re-legitimize business, as they claim in their article. Just getting firms to respect the spirit of the law - say in paying their fair share of taxes or respecting international labour standards across the globe - would be a much better way of re-legitimizing business.

4. It is based on a shallow conception of the corporation's role in society
CSV is supposed to be about "reshaping capitalism" but in reality it is really just more of the same of all the stuff that has given capitalism such a bad name - a blind focus on individual corporate self-interest. It will help solve some social problems, and will make some firms, and some stakeholders better off … but who are they kidding that this is going to save capitalism? What we need is a perspective that acknowledges the systematic nature of many of the problems we face, and a willingness from firms to engage in collaborative responses with other stakeholders to solve the problems that need solving. Not just those that can be cherry-picked to make a fast buck.

The point is not that CSV contributes nothing to the debate on corporate responsibility - there are some very good reasons why it has met with so much success, as we discuss in the article. But in ignoring much of which is actually problematic in the field it gives a very unrealistic picture of the challenges ahead. Managers looking to combine social welfare with economic prosperity simply deserve more than the whitewash that CSV offers them.

CSR in Africa: be part of it!

Today we have another guest post from our long-term friend and collaborator, Laura Spence, who is just back from the African Academy of Management Conference and had some reflections we thought would be good to share.
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Given the laudable aims of corporate social responsibility protagonists - I guess, roughly speaking, to make the world a better place - you have to wonder why so much time and effort is put into understanding social responsibility in places where really, let’s face it, the social problems are not really that big.

Should we be stressing about which company sponsors school sports equipment, or would we be better occupied to worry about schools which have no books? Is corporate lobbying one of life’s big issues or could it rather be the conflation of corporations and governments, systemic bribery, corruption and nepotism? Should we be fretting about diversity training in head offices or focusing on situations where gender, race, class, caste, religious and tribal differences mean staggering inequalities in opportunities are ingrained? It paints a pretty miserable picture when you think about it.

For all this, understanding developing and emerging countries need not be a miserable enterprise. I have just come back from the fabulous African Academy of Management (AFAM) Conference in Botswana, with renewed understanding of social responsibility – or at least a whole new set of questions to ask.

Discussion around the conference was not so very different in many respects to other Academy events, but one thing kept surfacing – we might list the relative importance of issues in developing country contexts, but is there a different philosophical starting point? Are the frameworks based on Western capitalist systems of any real help outside of the ‘West’?

As is the way of things sometimes, a glimmer of an answer came for me in one of the few moments we had to get outside of the conference. We visited, by chance, a small exhibition of local artists’ work relating to the fight against HIV/AIDs. It was produced under a cross-sector partnership between government and a local NGO with the Tswana strap line ’Nna le sea be’. This roughly translates as ‘Be part of it’.

It is just a tourist-eye view of mine of course, but this felt different to me, not an approach I would expect to see elsewhere. There is something special about the local push for the acceptance of problems and drive to pull people together to join in and be a part of the solution, reflected through a local saying used in equal measure to help someone pick up something they have dropped, or work together to reduce the tragedy of HIV/AIDS. Surely this has implications for CSR in Africa.

Alongside this, another important realisation was the different pace in Botswana. Time and again when waiting for some service or other to be provided, one is met with ‘It’s coming’ or better still ‘Tomorrow’. It is a reminder how hung up some cultures are with everything being just so, preferably yesterday. When the pace of life slows, this does seem pretty absurd, but it also acts as a reminder that transferring expectations from one part of the world is a misguided approach to just about anything, not least CSR. It is likely to be far more helpful to learn from local perspectives, achievements and solutions. But patience might be needed.

My reason for being in Botswana was as part of the team offering a PhD training workshop and a stream on small and medium sized enterprises and social responsibility in developing countries funded by the UK Economic and Social Research Council. We have six seminars planned for 2014 and 2015, a book and as a result of the fascinating time had at AFAM 2014, we will be wrapping up our project at AFAM2016 in Ethiopia.

Nna le seabe.

Laura J. Spence

Top 10 corporate responsibility stories of 2013

Plus ça change in corporate responsibility. If nothing else, 2013 provided ample evidence that, contrary to popular belief, corporate responsibility issues, even the huge stories that dominate the media, do not exactly come out of nowhere. So many of the top CR stories of the year, like the Rana Plaza disaster, Apple's tax problems, and JP Morgan's huge fine, were already prefaced by the big stories of the previous year. Among our top 10 of 2012 were a Bangladesh factory fire, corporate tax avoidance, criticism of tech companies, and prosecutions in the financial sector. So the writing was already on the wall for most of the big stories of 2013. It would appear, as Ethical Corporation editor Toby Webb said recently, that with all the excitement about new opportunities and win-wins, companies are underestimating the importance of sound ethical risk management in the corporate responsibility equation. So, if you want to know what CR risks lie ahead for 2014, you could do worse than checking through our list of the big stories of 2013.

1. Rana Plaza building collapse
Back in April 2013, more than 1100 people, mostly garment workers, died when the Rana Plaza building collapsed near Dhaka in Bangladesh. It was probably the single worst garment factory disaster yet, in an industry that has suffered more than its fair share of needless fatalities. But Bangladesh had already seen a series of major industrial accidents leading up to Rana Plaza, which had been met with little tangible response from business and government leaders. Rana Plaza looks to have at last changed that. The Accord on Fire and Building Safety in Bangladesh, signed by nearly 100 global retailers, as well as labour unions and NGOs is a legally binding agreement to ensure worker safety through independent factory inspections, mandatory repairs, financial support, and sanctions for noncompliance. More than 2m vulnerable Bangladeshi garment workers are already covered by the Accord. A competing agreement, signed by Walmart, Gap, Target and other North American companies was criticized for having weaker enforcement and failing to involve labor unions. Nonetheless, both pacts are evidence that factory safety in Bangladesh is finally getting the concerted attention it deserves.

2. Apple's tax avoidance
Corporate tax avoidance had been a growing story in the UK and elsewhere prior to 2013, as evidenced by our top stories listing of 2012. But the issue exploded onto the public consciousness when Apple's CEO Tim Cook was forced to testify to a Senate committee in Washington back in May of this year. The company had avoided paying literally billions of dollars in tax by exploiting various loopholes in international tax treaties and funnelling its European profits through a shell company in Ireland. All completely legal, of course, but hardly what the public expects of a good corporate citizen. Now that attention to corporate tax avoidance has gone global, and with inequality and government debt the two biggest global risks today, the obvious questions are which country will be next in taking aim and which company will be in the firing line? Corporate tax reform is also undoubtedly going to loom even larger in the coming year.

3. NSA spying
Without doubt, Edward Snowden's whistleblowing on the US National Security Agency's (NSA) mass surveillance programs was the story of 2013. Nothing else even got close. However, the corporate responsibility dimensions still remain somewhat murky, which is why it doesn't quite make it to the top of our list. We do know, however, that telecoms companies like Verizon are required to hand over all call records  (or "metadata") to the NSA about cell phone calls made in the US. We also know that none of these companies ever sought to challenge the legality of the action. Another revelation was that the secret PRISM spying program allows the NSA to tap into the servers of internet companies like Google and Microsoft to access customer data. We also know that NSA pays millions of dollars to these same companies. We do not yet know exactly how complicit tech companies have been in the whole mess but one thing for sure is that they now realize that the NSA spying story is undermining their customers' trust and are calling for government reform. Expect much more to come in 2014.

4. JP Morgan's $13bn misconduct settlement
Our annual list of major corporate responsibility stories would not be complete without an entry from the finance industry. As we predicted at the beginning of the year, 2013 was marked by the return of government and some major financial sector scalps. None of these was bigger than the whopping $13bn fine landed on JP Morgan for misleading investors in the same of mortgage backed securities in the lead-up to the financial crisis. To date, it is the settlement ever between the US government and a corporation, and will come as some (though probably not enough) relief to those who have viewed most of the finance sector giants as getting away with the crisis relatively unscathed. On the other hand, JP Morgan is probably pretty sore about catching the flack for misconduct that was less about their own practices and more down to firms like Bear Stearns that they were encouraged by the US government to acquire at the height of the meltdown. No one comes out of this looking good.

5. Europe's horse meat scandal
At the beginning of the year, the big news was all about horse meat turning up in products it wasn't supposed to be in. Like those clearly labelled as "beef". The scandal started in the UK, quickly spread to a suspect supplier in Ireland, and soon rocked much of Europe. Customer trust rapidly evaporated as it became clear that effective oversight of the food industry was sorely lacking. Companies acted quickly to withdraw potentially contaminated products and shore up confidence but further revelations of large scale criminal activity in the food supply chain will do little to restore trust in a thoroughly compromised industry.

6. India's new CSR law
The world's largest democracy now has the world's most extensive CSR legislation. But that is not necessarily a good thing. Under the new Companies Act, passed by the Indian Parliament in August 2013, large Indian companies must spend at least 2 per cent of their net profits on CSR each year from 2014 onwards. It also requires firms to set up a CSR board committee and institute a CSR policy. The new CSR legislation has met with a mixed reaction, especially as it seems to institutionalize a somewhat backward looking approach to CSR which emphasizes philanthropic giving whilst ignoring the core strategic business of the firm. It will also be incredibly hard to enforce in a country already hamstrung by an overburdened legal system. On the plus side, the legislation does force many of India's laggard companies to finally take some responsibility for the various social problems faced by the country's citizens. For better or worse, CSR is no longer something that can be ignored in India.

7. Chevron's Ecuador pollution case
It has been a big year for Chevron and Ecuador in their long-running, aggressively-fought pollution case. In November, the Ecuadorean high court made its long-awaited appeal decision which upheld the original 2011 judgement requiring Chevron to pay $9bn to compensate for contaminating the rainforest during crude oil extraction over two decades ago. Chevron has never operated in Ecuador but inherited the lawsuit and its toxic legacy when it took over Texaco, the original operator, in 2001. For its part Chevron continues to dispute the legality of the ruling and has refused to pay. The appeal was at least partially successful for Chevron by halving the original $18bn damages bill, but not in overturning the decision. Chevron is now awaiting the outcome of a counter-suit heard last month in the US against the plaintiff's main lawyer, who the company claims engaged in bribery and fraud to secure the conviction. Meanwhile, attempts by the plaintiffs to seize Chevron's assets overseas to pay the fine also had their ups and downs in 2013. For example, Canada first denied them the rights of enforcement in May, only for a judge to overturn the decision on appeal in December. Other actions are underway in Brazil and Argentina. This has fast turned into a test not only of the Ecuadorean legal system, but of the global legal system's appetite to prosecute international legacy corporate responsibility issues.

8. Rosia Montana mining protests 
2013 saw major protests against mining operations all over the world, including Australia, Canada, Columbia, Greece, Niger, Peru, even Tibet. But the biggest of the lot was probably in Romania, which saw a mass protest movement arise in response to plans to mine around the town of Rosia Montana. If approved, it would be Europe's largest gold mine but critics claim that it would inflict untold social, environmental and cultural damage. Mass street protests erupted after the government proposed a new law that would enable the Rosia Montana Gold Corporation (majority owned by the Canadian mining company Gabriel Resources) to finally start operations after years of failing to acquire the necessary environmental permits. At stake here then is not just the proposed mine but the legitimacy of the democratic process, which protesters feel has been fatally undermined by the hastily forced through legislation. As one protester put it: "People today confront a corrupted political class backed up by a corporation and a sold out media; and they ask for an improved democratic process, for adding a participatory democracy dimension to traditional democratic mechanisms."

 9. New UN Global Compact 100 Index
There were several entrants to the new corporate responsibility standards and guidelines category in 2013, with the G4 guidelines of the Global Reporting Initiative probably being the most talked about. But September's launch of the Global Compact's new stock market index, the Global Compact 100, for us represented the most significant development. First, as John Entine noted, it offered a welcome new development in a social investing field "hungry for innovation and dogged by ideological correctness". But more than that it showed just how far the UN was willing to push the needle on its voluntary approach to corporate responsibility that heavily prioritizes incentives rather than enforcement. While many are still criticizing the Global Compact for not having sharp enough teeth to weed out laggards and green washers, the new index makes it abundantly clear that the UNGC is moving in a very different direction. Ten years ago it would still have been unthinkable, but the reality is that the UN is no longer just in the business of accords, declarations, and principles but is now also firmly in the finance industry.

10. South Korea's nuclear corruption scandal
GSK's corruption scandal in China may have got most of the headlines, but in our book, the corruption scandal that has engulfed South Korea's nuclear industry this year tops it for potential impact. Two short years after Japan's Fukishima disaster, neighbouring South Korea is also facing a devastating loss of confidence in its nuclear industry which supplies about a third of the country's energy needs. The scandal has centred on a swathe of faked safety certificates that have been issued for critical nuclear reactor parts over the years, and the bribes that have allegedly been paid to look the other way. Most commentators pin the blame on the closed structure of the nuclear industry in South Korea with only a single national operator and close ties between the operator, suppliers and testing companies. The prime minister has likened the industry to the mafia. A number of reactors have been shut down, trust in the industry has plummeted, a national energy shortage is underway, and now some 100 officials have been indicted for their part in the scandal. Corruption that compromises the safety of the nuclear industry is probably about as bad as it gets. And its unclear yet whether South Korea can really turn this one around.

Photo by rijans. Reproduced under Creative Commons licence

Corporate social responsibility in a global context - a new free download

The new edition of our textbook on CSR, Corporate Social Responsibility: Readings and Cases in a Global Context, written with our colleague Laura Spence, hit the shelves a few weeks ago - just in time for the new academic year. And we're pleased to see that it's flying off those shelves pretty fast too. In its first month alone, the book sold almost a 1000 copies, which is pretty good going - and a big uptick on like-for-like sales from last time around.

The second edition is quite a change from the first. It's still based around readings of classic and recent articles on CSR, but we've updated more than half of these, written three brand new cases, and overall it has a much more textbook-like feel to it. Along with Routledge, the publishers. we've worked hard at refreshing the design and contents to make the text much more user friendly, more lively and engaging, and with a great new companion website to help students and instructors make the most of the book. This includes a whole bunch of annotated links to CSR in practice which help readers see where theory in the book turns into practice as well as links to career resources for budding CSR professionals. Of course, there are also all the usual instructor resources like powerpoint slides and teaching notes, as well as a cool new "Case Club" which has suggested cases for each of the chapters in the book. It really is as close to the complete package for a CSR course kit as we could get it.

To mark the launch of the book, we are making available, completely free, a download of the first chapter, "Corporate social responsibility: in a global context", over at the Social Science Research Network. This is the exact same version as you'll find in the book, downloadable as a pdf. You don't need to sign in, register, or anything. Just go to the right page and click "Download This Paper". It's that simple.

The chapter is a good basic CSR 101 for anyone trying to get their head's around the subject. Among other things, it includes discussion on the nature and definition of CSR, and its emergence in different national contexts (including developing and transitional economies) and even different organizational contexts (such as small and large firms, and public, private and nonprofit organizations). As with the previous edition, although we discuss a whole bunch of different definitions of CSR, we don't introduce a new one. Instead we try and capture what is common across CSR definitions in order to determine the main unique features of the phenomenon. We call these the six core characteristics of CSR, which are shown in the Figure below.

Six core characteristics of CSR

Reproduced from Crane, A., Matten, D., and Spence, L.J. (2013), "Corporate social responsibility: in a global context." In Crane, A., Matten, D. and Spence, L.J. (eds), Corporate social responsibility: readings and cases in a global context, Abingdon: Routledge (p. 9).

As we are often heard remarking, CSR is a field of "conceptual anarchy". Hopefully by reading the introduction, and who knows, maybe reading more of the book in class, at the library, or just for your own enjoyment and education, we can hopefully help you navigate through some of the confusion to reach a clearer, if no less complex, understanding of a sometimes elusive idea.

See also: Our top 10 tips for teaching CSR

Top 10 tips for teaching CSR and business ethics

It's time again for the start of the new school year in universities across much of the globe. For us, this typically means updating course outlines, refreshing our teaching materials and getting ready to hopefully engage and excite a new cohort of students looking to learn about corporate responsibility.

There are many ways to teach courses on CSR or business ethics. Some approaches suit particular professors or groups of students better. But over the years, we've discovered that, as far as teaching in business schools is concerned, there are some fairly common do's and don'ts that can make teaching in this field more effective.  Not everyone will agree with all of these, but here's our list of the 10 best ways to ensure a positive learning experience in ethics and CSR.

1. Be clear and realistic about what you can achieve.
All good courses start with a clear set of learning objectives. This is particularly important in corporate responsibility courses because there are so many different types of outcome that an instructor might be aiming for. Do you want to make your students more ethical managers? Do you want to improve their decision making? Do you want them to be able to practice CSR, or to have a more critical perspective on it? Think about not only what is most important to you, but, most importantly, what you think your students hope t learn. But beware of expecting too much - you're never going to change your students' values in a couple of months of teaching.

2. Use current events to engage students.
Teaching ethics and CSR isn't easy, but one thing we do have an advantage in is that there is hardly a day that goes by without our subject being in the news. This is a golden opportunity to demonstrate to students that what they are learning in the classroom has immediate relevance in the real world, especially when those individual events are part of broader trends, such as globalization, shifts in power, public mistrust of business, etc. Don't waste the opportunity!  

3. Start with a problem or issue, not with a theory
In our experience, business school students respond best when they recognize there's a problem to be fixed and then you give them some theories or concepts to help them do so. So start with a problem - whether a case study, a news story, or your own experience - and then use this to hook them on why theory matters - not the other way round! Starting with the theory and then showing how it applies runs the risk of losing the students' interest too early. It might work for some, but it's a risky strategy.

4. Students’ own experience is valuable class material – don’t waste it!
We are constantly surprised by the rich variety of  experience and opinion that our students have had in corporate responsibility, even without ever having a formal CR position. This is a real treasure chest for teachable moments, when you can flip what you're teaching in the classroom to help students make sense of their own past or current experience. And the rest of the class can learn so much from this too. It brings everything into such clear focus about the here and now rather than some abstract case in a textbook.

5. Don't preach.
In our opinion it is important to avoid imposing a single theoretical position or set of values on students, regardless of what your own perspective on corporate responsibility might be. There are few unequivocal right or wrong answers in this field. So the goal should be to help students understand the breadth of perspectives on the issues at hand and enable them to find their own position not to impose one on them. The professor's job should be more like that of a coach than a preacher.

6. Don’t confuse ‘there are no right and wrong answers’ with ‘there are no better and worse answers’.
The first statement is largely true. The second one is not. One of our most important jobs is to enable students to make better decisions, and to come up with better answers than just simple moral relativism : "my opinion is just as valid as anyone else's". A valid opinion, or a good answer, is one supported by fact, reason, evidence and logic. This may not mean that the answer is right from any universal moral perspective, but is should mean that it gets an A when you're doing your grading - even if you don't agree with the answer!

7. Use (but do not abuse) the business case 
Rightly or wrongly, the business case is the most powerful tool for any corporate responsibility advocate in the workplace. If you can show how a CR initiative will create business opportunities or reduce risks, it has a much better chance of getting approved. So teaching the business case is a crucial part of any course. But there is more to responsibility than only the business case. A good course needs to consider other social and ethical arguments for corporate responsibility beyond the business case so that students do not get trapped inside a purely self-interested mindset.

8. Be mindful of the limits posed by particular forms of business and business system. Not all companies are publicly-held corporations, and not all systems of governance work like the US where the shareholder is king. When teaching corporate responsibility it is essential to help students recognize this, especially if they are using a US textbook. Small firms, privately held companies, co-ops, mutuals, B Corps, social enterprises, etc - these all operate by different rules that give rise to different limits and opportunities for social responsibility. Likewise, the governance of large companies in continental Europe, Asia and and Latin America is quite different from in the Anglo-American system. Corporate responsibility is best understood as a practice than happens within particular constraints - and students need to know exactly what those constraints are in different parts of the world and in different parts of the economy.

9. Provide a good structure for learning. 
This is true for any course, but its easy to forget how important good structure is for good learning when there are so many juicy issues to get your teeth into in our field. An effective course will use a clear relevant organizing framework (such as themes, stakeholders, theories), not just a list of issues. Think about a course as series of building blocks - what's the foundation and what are you aiming at reaching at the pinnacle?

10. Remember to link with other business subjects and courses
Corporate responsibility is not an island. It needs to be linked and embedded with the other subjects that students are taking. Hopefully some of this will be happening in those other courses, but our job as a corporate responsibility professor is also to make those links clear for our students so that they don;t see ethics and social responsibility as add-ons separate from "real" business. So bring in elements of strategy, or marketing, supply chain management, accounting, finance - whatever it is that makes sense in the context of what you are teaching. A joined-up curriculum leads to joined-up thinkers - and one way or another we need a whole lot more of them out there.

Photo ©Schulich School of Business

The future of CSR

Our collaborator on the forthcoming second edition of our CSR textbook, Laura Spence from Royal Holloway, University of London, has been musing recently on the future of CSR. So we asked her to pen another guest post for us about where she thinks things are going. Here's what her crystal ball says...

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I’ll let you into a secret. Sometimes, as I travel from conference to conference, I wonder if we are getting anywhere at all in the study of CSR.  As the field has developed, there are some topics and theories which have somewhat of a stranglehold on our thinking. With every new conference presentation that yet again tackles the well-trodden ground of large, Western multinational corporations, corporate social performance, stakeholder theory, or institutional theory, my heart sinks a little, though I also work on some of these. Don’t get me wrong, there is plenty of good work on these topics coming out, but we are in danger of throwing all our energies at an ever-decreasing circle of subjects when there is so much more out there to do. Couple that with the assessment by some that CSR has come to its natural end and it is sometimes hard to stay positive for the future of CSR.

And yet, in the last few weeks, I have had to rethink my doubts. It all started with an event on Gender and Responsible Business at Nottingham University’s International Centre for Corporate Social Responsibility. Somehow CSR – of all subjects - has more or less overlooked the gender perspective despite some pretty long standing powerful contributions.  Every presentation I saw contributed something refreshing, different and relevant, demonstrating a huge potential to shine a new light on CSR in the future. It is well worth joining the continuing conversation through the LinkedIn group: ‘Gender & Responsible Business Network’.

The inclusion of marginalized voices was to my delight also explored at the ‘Corporate Responsibility: Towards Inclusive Development’ stream at the European Group of Organization Studies (EGOS) conference in Montreal.  In a field dominated by US and European corporate perspectives and authors, this stream surfaced a young, vibrant and diverse group of scholars working on regions that constitute most of the world but a small proportion of CSR publications. We heard about CSR in Asian, South American, Middle Eastern and African countries, drawing on important cultural, political, economic, social and religious perspectives that are usually sidelined. Is the future of CSR in Europe or North America? I doubt it. The level of social need, different governmental roles, critical challenges and changing economic structures in developing and emerging economies should encourage us to look well beyond the usual contexts.

And I was not the only one pondering the future of CSR. At a special workshop at the EGOS conference, Christopher Wickert (VU University Amsterdam) and Arno Kourula (University of Amsterdam) led a focused workshop ‘Debating the Future of CSR’. Bringing together PhD students and early career researchers (and let’s face it, they should be the ones that determine what’s around the corner) with a few more established academics, we had the opportunity to really dig in to three key aspects: contextuality in CSR; theoretical criticism of CSR; and stakeholder perspectives and marginalized voices in CSR. The topics discussed were wide ranging and included the role of non-governmental organizations, CSR as a political project, activism, the role of the state, frustration with the ‘business case’, the performativity of language around CSR, listening to the polyphony of  voices and the dangers of stereotyping.  I really hope that the participants at the workshop go on to publish on some of these perspectives in more detail – it will make fascinating reading.  

Some of these waves of CSR research are captured in an earlier Crane and Matten blog and a brand new chapter in our second edition of CSR: Readings and Cases in A Global Context (Crane, Matten & Spence, Routledge, July 2013). There we add to the debate on the future of CSR in terms of new business models such as social entrepreneurship and social innovation, the influence of new social movements, forms of regulatory rather than voluntary CSR, the outcomes of CSR, and the positive prospects of CSR as a profession and an academic subject.   

So, as summer starts in earnest in the UK, I am optimistic for the future of CSR. If space is made for the rising waves of research I have been privileged to see in the last few months, you never know, we might actually make a difference. 

Laura J. Spence

Photo by eelcowest. Reproduced under Creative Commons licence

Top 10 tips for publishing CSR research in top journals

Contrary to popular belief, most university faculty don't spend the whole summer lounging on the beach or sitting in the garden. For most of us, summer is the time when we can really focus on our research without the usual distractions of teaching and university administration.

Although many academics do this research because they enjoy it, it is also a critical part of our role. Success in publishing our research is often the number one reason why we get hired or not, or whether we get that promotion or pay rise that we're after. Publish or perish is a mantra that is very real for many of us.

Publication, however, is no easy matter. There is great competition for space in the best scholarly outlets, like high ranked journals and prestigious book publishers. Those of us doing research on corporate responsibility issues, whether CSR, business ethics, business and sustainability, or whatever else sometimes struggle to meet the kinds of standards expected by these outlets. This is not because we're any less smart than other researchers, but we do have a complicated subject that doesn't always lend itself very well to the demands of the top tier journals. There is also just simply lot to learn about the publishing process, especially for PhD students, junior researchers or those relatively new to the demands of publishing their work in premier English-language journals.

As a result of this, we often find ourselves giving advice to other CSR researchers, especially at the many workshops and conferences that crop up over the summer. We tend to tailor this advice to the different audiences we speak to, but we also thought that it might be helpful to give a more general list of top tips that anyone doing work in the area could hopefully learn something from. Our thoughts are particularly relevant to publishing in high ranked management journals, but most of the lessons translate beyond this. Let us know if you find them helpful or if you have your own suggestions, just add them in the comment section below.

1. Make time for research. This is the critical starting place. Good work requires a substantial investment of time and energy and lots of researchers spend a lot of their time on teaching and service. In the CSR space, in particular, many of us are so passionate about our subject that our available research time is easily eaten up by working with our students or lobbying our colleagues to include more CSR content in their courses. Carving out the necessary space and time for research is critical. There are no shortcuts.

2. Find great co-authors … but select them carefully. OK, so maybe there is one shortcut: finding other people to do some of the research with you. But co-authorships go wrong as often as they go well. So choosing carefully is critical. Find people with complementary skills, who understand the subject in different but related ways to you. Remember, CSR issues are complicated, so just as we always advocate partnership by organizations, so too do we need to partner to understand a phenomenon. But if we go too broad, we risk losing the all-essential focus that the top journals aim for. Our no.1 piece of advice for selecting co-authors - find someone you can go for a drink or a coffee with and feel energized afterwards.
 
3. Write for a clearly defined audience, with a carefully targeted paper, that joins a specific conversation. Research doesn't happen in a vacuum. Who do you want to read your work? No, really, who exactly do you have in mind? What have they written about your subject? Answer these questions and join an ongoing conversation rather than trying to start a whole new one. It may seem like CSR issues are new and exciting, but many of the issues, problems or concepts that we find interesting have been addressed by others in other ways. Some scholars live by the maxim that if you think an idea is really new then you probably just haven't read enough. So make sure you do read enough and make sure that your work is crafted for a particular audience. If it helps, think of it like a product that has to fill a clearly defined need.

4. Be clear what the research gap is that you are aiming to fill, and what your contribution is. Probably the number one reason that editors reject corporate responsibility papers is that they don't make a clear enough contribution. Typically, this means, a contribution to academic theory. So nailing down the research gap and deciding for yourself what your unique contribution is will reap rewards. Especially if the contribution is one valued by those other researchers that you're aiming to write for.

5. Try as far as possible to be theory rather than phenomenon driven. This is one that many CSR researchers struggle with. We're doing research in this area because we find the issues themselves fascinating. This means we tend to phenomenon-driven. But the higher ranked journals all typically look for a theoretical contribution and so they expect the research they publish to be theoretically-driven. So if you don't want to take too many risks with that limited amount of research time you have, work out how to make the translation from phenomenon to theory and start as you mean to go on.

6. Different contexts have to be theoretically distinctive (revising/extending theory) not just new applications of existing theory. This is particularly relevant for those doing research on or in particular countries or industries, which is so common in the CSR field just because it has become so ubiquitous. The key thing to remember here is that just because no one has done research on your country or industry before, that doesn't mean it needs to be done now. If you're following the advice we've already laid out, you'll be thinking - what is it about this country or industry that is sufficiently different that it renders existing theories inadequate to explain it. If you can answer this, you have a shot at extending or revising that theory rather than just applying it to a new area. And that's what the reviewers will be looking for.

7. Test out your ideas with working papers, conference presentations, workshops, etc – do not submit too early. Research is a process, and the great thing about that is there are lots of opportunities to get feedback on what you're doing before its too late. Take your time to see if your ideas have the potential for top tier publication before you commit to doing the research. And then as you're doing the research get feedback from the best people you can about your emerging results. Finally, circulate your work and get feedback before you submit to that tier 1 journal that rejects 90% of the papers it receives. You want to be as sure as possible that you're going to be in the rarefied 10%.

8. Beware of avoidable ‘incompetence cues’ . This is one that the former editor of Business Ethics Quarterly, Gary Weaver, always explained very convincingly. If editors and reviewers find sub-standard English, spelling mistakes, poor referencing, formatting that doesn't meet the journal's specification and other minor errors in a paper (especially in the first few pages) you are going to activate the editor's 'incompetence schema'. That is, he or she will already be thinking that you're in some way incompetent before they even get to evaluating your ideas. Don't risk it. Get the basics 100% right, every time, without fail. This will give your work the best chance it can of being judged in the way you want it to be.

9. Remember that reviewers are there to help you improve your work. The community of researchers around CSR and business ethics are a pretty collegiate and supportive group. But it can feel like completely the opposite when you're holding three reviews which all appear to rip your work to shreds ... but are still offering you the chance to resubmit something different (well, actually, better) in the future. But believe us, they do actually want to see your work published, so you just need to work with them, not against them. The most successful researchers spend almost as much time on revising their work as they on the initial preparation. Take criticism on the chin and use it constructively as just another stage in the research process. In the end, you'll appreciate the advice because it almost always improves your research if you're working with a good journal and good reviewers.

10. Get used to criticism and rejection – and don’t forget the bigger picture of why you want to publish in the first place. We all get bucketloads of criticism and we all get our work rejected. Its a part of the job as a researcher. Some people say that if you're not getting rejected from time to time, you're not aiming high enough. So don't take it personally. And remember, the reason you're putting yourself through all this is that you think the issues are important and that you have ways of thinking about it that need to be read. The best journals are regarded a good because they have a higher impact than the others. If you really want your work to be read by other researchers - if you want to leave a mark on the field - you'll need to face the trials and tribulations of aiming for the best journals. So grow a hard skin along with that smart mind and warm heart.

Margaret Thatcher’s unacknowledged grandchild

The death of Baroness Thatcher is dominating today's news. Despite the euologic praises heaped now posthumously on the ‘iron lady’ one cannot overlook one common thread: ambiguity. Yes, she modernized Britain, but for whom? She was a war leader, but what was really gained in the Falklands? She battled constantly with her European friends, but to what avail? Yes, she was the first British female head of state, fairly unprecedented in many countries at the time – but did she leave a legacy to her sisterhood? “Well, yes, technically she was a woman...” was one of the funnier comments on Thatcher’s gender role I once heard.

It is fair to say then that among her legacy is certainly one topic which is close to the interest of this blog. And we hasten to add, a legacy no less ambiguous than all her other ones. She certainly symbolizes and has pioneered many of the political changes which have given rise to Corporate Social Responsibility (CSR) as a new business practice during the last three decades. This conclusion is fairly obvious looking at some of the more historical work on the spread of CSR in Europe by authors such as Jeremy Moon, Daniel Kinderman and others.

Among her heritage we can certainly count the comprehensive privatization of many then state-owned companies in the UK – a policy then also very popular in the US during the administration of her close friend Ronald Reagan. It was her conviction that telecommunication, public transport, water or electricity can be better delivered by private companies and governed by ‘free’ markets’. The attribute ‘free’, by the way, makes me cringe when it gets relentlessly rehearsed today (just listing to BBC World while writing this). Whoever has lived in the UK and has used, for instance, the railways knows that these markets are anything but ‘free’. In many cases her privatization project made a few people very rich and created a monopoly for private companies which resulted in lower quality of services and higher costs to the citizen-turned-consumer.

A second important heritage was deregulation. Many of her reforms here, for instance, created the burgeoning financial industry in the City of London; but it also cut down workers rights, the power of trade unions and a host of welfare state institutions.

The crucial side effect of this retreat of the state of course was that suddenly a huge vacuum occurred. The initial reason why many public services were ‘public’ was that receiving a letter, drinking clean water or having access to affordable transportation was seen as a civic entitlement. And the expectations, once administered by the state, now turned to private companies. The same with abandoned public services: safe high streets, reliable schools,or care for the elderly and poor in many cases morphed into ‘responsibilities’ for private companies. The retailer Marks&Spencer, in explaining their CSR approach, used the slogan ‘healthy high streets need healthy back streets’. It still symbolizes this turn. Thatcher pioneered in the UK what we have seen over the years happening in most other European countries and beyond with some time-lag; and it is for this reason, that the UK became and still is the leader in CSR in Europe.

The legacy of privatization and deregulation again is at best ambiguous, and CSR as it were is the knock-on effect of that. Even the more recent events at the financial markets after 2008 can be seen as the aftermath of the Thatcherite legacy. And lets not forget - the British banking system and indeed the UK economy has been hit quite severely to this day. Deregulation left more discretion to actors in those markets – which encouraged a behavior which has contributed to the financial crisis. Which in turn led to calls for more responsible and accountable corporate action even louder and more demanding today than ever before (think Occupy).

CSR then can be seen as some sort of unacknowledged grandchild of Mrs Thatcher: a knock-on effect of her policies, but certainly not one she would have approved. Her policies were very much inspired by the other big critic of CSR, Nobel Laureate and Chicago economist Milton Friedman. It was a big illusion of the 1980s to think that government can discharge themselves from a host of public services and responsibilities and to expect that the market will happily take care of all those issues. While Thatcher’s idea was to free markets from stifling regulation and to liberate companies to pursue their economic self interest – companies end up having to look after healthcare, education, infrastructure and many more social goods. It is fair to argue, that in the UK – but also in Scandinavia, Germany and France – privatized utility companies are at the forefront of CSR currently.

It is deeply ironic that the person who emphatically claimed that ‘there is no such thing as society’ instigated a renewed sense of social embeddedness and social responsibility exactly in the very place which she went out to free from all such considerations. While her famous statement ‘the lady is not for turning’ remains unforgotten, the turns of history are sometimes stronger than the most resolute renegade – even if they come in the shape of an ‘iron lady’.

Artwork by Rachel E. Chapman, reproduced under the Creative Commons License.

A sneak peek at the new edition of our CSR textbook

The new second edition of our textbook, Corporate Social Responsibility: Readings and Cases in a Global Context is due out a little later this year. Above is a first look at the cover, featuring a shot by Lucas Schifres of workers crimping stones on silver in a jewelry factory in Panyu, Guangzhou Province, China.

The photo is part of Schifres' Faces of Made in China series, which was featured on the New York Times "Lens" blog last year. The purpose of the series is to "consider the otherwise anonymous people who produce our essential possessions ...to put a face to labor in China". Whilst most of the photos in the series are simple portraits of Chinese workers, the cover shot shows more of the context in which Chinese-made goods are manufactured.

Schifres didn't only photograph the workers but also interviewed them too. One of the more surprising things he found was, despite concerns from the West about the social responsibility issues evident in many Chinese factories (as exemplified by the Foxconn/Apple controversies of the last few years) they actually found a real sense of pride among workers. As the NYT blog reports Schifres saying, "The answer was always, ‘Oh, we’re very proud; we’re happy that the products go all around the world' ... ‘This is good for China; this is good for our generation.’” “They have absolutely no idea about controversies around the world about the Made in China products,” he said.

This for us captures one of the central questions in CSR - i.e. what exactly is responsible corporate behavior in a global context? Different parts of world have different rules, standards, and expectations concerning social responsibility, but global corporations have to traverse this variety in developing their programmes and need to ensure that their global supply chains meet acceptable standards for working conditions, environmental impacts and other social considerations.

These and many other issues are covered in the book. It's designed for Masters students and advanced undergraduates studying Corporate Social Responsibility courses. The new edition will feature all new cases  (on Vodafone, HSBC and Tata), many new readings, and fully updated editorial content from ourselves and our co-editor Laura Spence. It's also going to have a great new companion website with all sorts of materials for students and instructors. We'll provide more details soon. The book will be out in the summer.

UPDATE
The book is now published. See our post on this and the new free download of Chapter 1

Unilever and responsible capitalism: a "licence to lead"

Over the past two days, we've had the good fortune to hear up close what Paul Polman, CEO of Unilever, has to say about responsible capitalism and the role of Unilever in making the world a better place. Polman has been in Toronto speaking in the Bata Lecture Series on Responsible Capitalism hosted by the Schulich School of Business. And from what we've heard, Polman is in a different league to most of the other identi-kit CEOs out there. He really gets that business has to do things differently if its to succeed and prosper in the future. And so far, he's been backing that vision up with real progress. That's not to say that Unilever is anywhere close yet to being a truly sustainable company, but few CEOs of global multinationals can match Polman's grasp of the challenges ahead. And more importantly, few can match his visioning of where he wants to get to.

Polman says that what we need to do is change the conversation about social responsibility from one about a "licence to operate" to one about "a licence to lead". The former is about meeting your basic legal and ethical obligations. The latter is about building for the long term based on "growing our businesses in line with the needs and aspirations of the communities we serve". OK, he's hardly the first to talk about long term goals and win-win opportunities. But what's interesting about Polman is that when he talks about the long term, he really seems to mean it. Talking about a resource constrained planet, global hunger, infant mortality, and the like, Polman sees plenty of opportunities in bringing people out of poverty and giving them the products they need to live better lives. But he's not just thinking about the 7 billion inhabitants of the planet who are already struggling to get by, but the next 2 billion that will be born in the decades ahead. As many people know, under Polman's leadership Unilever has embarked on its hugely ambitious Sustainable Living Plan with, among other things, a goal to source 100% of its agricultural products from sustainable sources, and a plan to double their revenue whilst reducing their absolute environmental footprint by 2020.

As Polman made clear in his talks, much of the company's impact comes not just in Unilever's own business but in their value chain and among their consumers. Getting people to wash at lower temperatures and to shower for 2 minutes less can radically reduce the carbon footprint of their products in ways that far outweigh operational efficiencies. And who better to change consumers' behaviour than the marketing experts at Unilever? If they can make us buy a bunch of stuff that we don't really need (and let's be honest, a lot of what they still do is exactly about that), then they can certainly get us to burn less energy when we're doing it.

What was inspiring about Polman's vision though is not so much the big goals they've set, but the framework they're trying to achieve it within - radical transparency, collaborative action, and brands that all have a social purpose. To you or me, it may look like a bar of soap, but to Polman, "we're not in the business of making soap, we're in the business of saving lives" as he said about their Lifebuoy product which aims to improve hygiene in the developing world.

Of course, getting a licence to lead is not just about getting a renewed licence from customers, but also from shareholders. A long term vision doesn't often sit well with short term focused investors  Polman moved quickly on this when he was first appointed CEO of Unilever in 2009 - within weeks he had stopped offering quarterly guidance ("I figured no one would fire me in my first month" he quipped). And trading investors they didn't want for those they did want - i.e. those with a little more patient capital - has been a critical element in Unilever's transformation.

So far it is clearly bearing fruit - progress towards the many goals of the Sustainable Living Plan has been good and the performance of the company is better than ever. Polman appears to be well on the path to finding the holy grail of matching economic growth with social prosperity. But as he acknowledges, the path will not be easy one, and Unilever won't be able to do it alone. As he said, even if Unilever meets its ambitious goals, it won't have succeeded unless other companies have joined them. "We're just a pimple," said the leader of one of the world's largest packaged goods companies.

  

Should the UN Global Compact have sharper teeth?

Do those teeth need sharpening? Georg Kell, Executive Director of the UN Global Compact. 

The emergence of multi-stakeholder initiatives and voluntary corporate accountability programs for business have become some of the most interesting aspects of the CSR debate over the past decade or so. The largest of these in terms of company participation is the UN Global Compact, which now has some 10,000 participants, including over 7,000 businesses in 145 countries. By any account, that's a huge number. It's also a huge experiment given that there's never been anything quite like it before or since.

A few years ago we were the official bloggers of the Global Compact's 10 year anniversary, "Leaders Summit" which took place in New York in 2010. At that time we made various comments on the successes, failures and future challenges of the compact. As geeky academics, we are now eagerly awaiting the publication of the special issue of the journal Business & Society (which we are on the board of), entitled "The UN Global Compact: Retrospect and Prospect", edited by our friends and colleagues Andreas Rasche, Sandra Waddock and Malcolm McIntosh. They've put together a nice collection of academic papers on the subject, including a terrific introduction from the editors, and the special issue really demonstrates how seriously the academic community is taking the Global Compact.

Some of the big questions for researchers interested in the Compact - and indeed for many in the practitioner community - are about its governance and effectiveness. Does membership have an effect of corporate social performance? What governance system would be most effective to ensure corporate accountability? And perhaps the biggest question of them all - should the compact, as its critics maintain, have more regulatory power to discipline companies that don't live up to its principles, or is it more important to have a low bar for participation so as to engage the maximum amount of companies?

Answers to these questions are slowly beginning to emerge from the research community. Over at the aptly named Global Compact Critics website, a colleague of ours at the University of Zurich, Patrick Haack, has written a guest blog based on his research that reaches a conclusion which the compact critics love to hate. Yes, you guessed it, Haack recommends that rather than kicking out any "bad apples" in the compact, the UN should keep them in. Paradoxically, this is the way to build legitimacy according to Haack: “a “soft” and consensual approach is in the best interest of the Global Compact and transnational governance more generally... "keeping bad apples” and providing them with time and resources to overcome organizational barriers may prove more fruitful than unconditional punishment."

Provocative stuff. Unsurprisingly, the critics have hit back - in the form of a post from Mariëtte van Huijstee from SOMO, the organization behind the Global Compact Critics website. "By keeping bad apples in at all times," she argues, "the initiative loses its legitimacy and appeal for other companies in the long run." This is no arcane academic argument; it goes to the heart of how to build an effective mechanism for corporate accountability and ensure that companies act in the best interests of society.  But the answers are not obvious and the need for good research is critical.Some of what has emerged so far has shown that the diffusion of the Compact has been dampened by the effect of critical NGOs who have voiced concerned over its "weak" inclusive approach - meaning that companies from countries with strong networks of international NGOs have been less likely to sign up than those from countries outside of these networks. This helps to explain why the Compact has been particularly successful at getting traction in developing countries, even whilst developed country NGO criticize its lack of teeth.

So the debate will no doubt rage on. But soon, we hope, we'll have the research to show what the real advantages and disadvantages are of the Compact - and whether its weakness is, as Haack contests, one of its main strengths.

Photo by djevents. Reproduced under Creative Commons Licence

Solving the executive pay problem

The idea that executive pay can be "too high" is a touchy issue. While many regular Joes are seeing their jobs disappear, or have been forced to endure cut backs to salary and benefits, CEO pay continues to escalate. Bonuses in the financial sector - never popular among the general public - are largely back to their stratospheric pre-crisis levels, much to the chagrin of the tax payers who funded the bailouts that kept them in business. And there is the growing chasm between those at the top and the bottom of the pay ladder that helped galvanize the Occupy movement. According to one recent study, the gap between CEO and average U.S. worker pay was 325-to-1 in 2010. In 1965, it was 24:1.

The business community, of course, continues to argue that it should have the right to determine its own remuneration levels. The global market for executives, they say, forces them to offer high salaries to attract the top talent. But stagnant performance is prompting many to question the logic of that argument. Why should companies be rewarding top executives for failure when everyone else is tightening belts?

Unsurprisingly, regulators have started talking tough. But progress has been limited. Three years ago President Obama announced that he would cap the salaries of executives of companies in receipt of TARP balilouts, yet by 2010 could do nothing to stop those companies awarding huge bonuses, judged to be "ill advised" by his newly appointed pay czar. A more systematic approach was promised with the Dodd Frank financial regulation, but efforts to rein in pay have had limited success. After much sword rattling from senior British politicians, the announcement by the UK government on January 23rd of a new approach to regulating executive pay claims to be the start of a more concerted response to the problem. The trouble is, it is not a very convincing solution. And perhaps even worse, it is not at all clear what the problem really is that they are trying to solve.

The "problem" with executive pay is that it is in fact a whole set of related problems. And each of these require different types of solutions. Income disparity between high and low earners is one thing, whereas CEOs being rewarded for poor performance is quite another. Setting the pay of bailed out businesses is yet another. And so on.

Regulators have to work out which of these problems they are trying to solve and what the best combination of regulation, encouragement, incentives, and sanctions should be to achieve desired results. Take the problem of pay disparity and those troubling pay ratios.  Blunt regulation probably isn't going to be very helpful here. For a start no one really knows what the "right" ratio should be. A maximum permitted ratio of say 100:1 may be feasible in some industries, less so in others. And as many have pointed out, the unintended effects might be that companies start outsourcing any of the low wage jobs they still have to generate a lower ratio.

Incentives, such as tax breaks for companies reaching certain thresholds, may offer more potential, although it would be technically complicated to administer effectively. A pay-ratio credits type market could also be devised whereby those companies failing to meet their targeted ratio could buy credits from those that over-achieve theirs. Much like in carbon markets, these types of systems help to even out differences across industries.

The "transparency" option trumpeted by the current UK government speaks to a more typical way of government providing the framework for corporate social responsibility initiatives. In creating a mechanism for pay ratios to be compared across companies (such as through mandatory reporting of pay, and support for some type of league tables comparing performance) governments can spur companies to improve their ranking. This avoids any necessity of setting limits or levels of acceptable performance and instead relies on competitive forces to drive improvements. As with all these incentives type approaches, it remains up to companies themselves to determine how to improve their performance, whether through increasing the remuneration of lower paid workers or decreasing that of higher paid executives. It stops regulators getting directly involved in setting pay limits and enables businesses the freedom to determine what works best for them from a competitive point of view.

Of course, there are also other less direct ways to encourage better pay equity. George Monbiot the UK journalist and environmental campaigner has recently put forward a spirited defense of a "maximum wage". Others argue for incentives or regulations to encourage increased employee share ownership among the lower paid. Such initiatives avoid the risk of companies simply "gaming" the pay ratio statistics, but also run into other problems, such as resistance from the business community and difficulties in implementation. Still, there is plenty of scope for interesting and imaginative ideas to help solve this and the other executive pay problems, and the UK in particular seems to be at a crucial tipping point in terms of public support for change.

Where the current UK government's proposals largely fall flat is in their over-emphasis on enhancing shareholder control of executive pay. For a start this does nothing directly about pay equity (which is what the public wants) but rather focuses more on the problem of whether senior executives are being rewarded for poor performance. Whilst giving shareholders more input into executive pay is not a bad thing, first you need to have shareholders that are active participants in the companies they invest in. In our dispersed ownership model of financial capitalism where shares are often held for matters of minutes, hours, and days rather than months and years, we often simply don't have sufficient shareholder engagement for such initiatives to make all that much difference. Similar rules imposed by the Dodd Frank Act in the US have done little to curb executive pay.

Clearly the time is right for action on the manifold problems of executive pay. But for those seeking to tackle them, whether in industry, government, academia, or civil society, it is imperative that there is clarity on which problems are going to be addressed. And dealing with such complex issues is going to require more creativity in terms of solutions, and more joined-up-thinking in terms of the causes of those problems, than we've generally seen so far.

Photo by GDS Infographics. Reproduced under Creative Commons Licence

How many CSR experts are just cheats and plagiarists?

CSR experts, people that write about, research, and practice CSR day-in, day-out are a pretty responsible bunch, right? After all, who would listen to anyone talking about responsible business who they didn't think was, well ... responsible?

Uh, wrong. Unfortunately, if our recent experience is anything to go by, there are some decidedly irresponsible CSR experts out there.  Actually, worse than that; not just irresponsible, but flat-out cheats and plagiarists. And we're not just talking about the usual CSR snake-oil salesmen who are simply out to make a quick buck from some dishonest greenwashing. No, we're talking the supposed purveyors of something resembling objective truth - academics and journalists.

How do we know? Simple. In the last couple of months we've run into several glaring examples of so-called experts simply stealing our work and passing it off as their own. Consider this one that has only just come to light. Jaquelina Jimena, a journalist and CSR adviser, wrote a nice article in the Canadian Mining Journal back in 2009 titled "Is Corporate Engagement Possible Through CSR Blogs?" Well, we would say it's nice, because it is almost word-for-word copied from one of our own blog entries "Corporate Engagement through CSR Blogs", published the year before. She changes our use of "we" to "I" of course, but that is about it. The rest is almost entirely plagiarized from our post. Well, except the last paragraph, which we she didn't copy from us. But that's not her work either. It's directly stolen from a post from our fellow blogger Fabian Pattberg.

Jimena has published other pieces in the Canadian Mining Journal about CSR, all of which, as far we can tell, contain substantial portions of text just cut and pasted from other people's articles and websites. Our friends at Ethical Corporation are a particularly popular source, it seems. Of course, she claims on her LinkedIn page, to be a "professional journalist" as well as a CSR adviser and lecturer, with experience among others advising at the Global Reporting Initiative and Anglo-American.

Now, we're not saying that Jimena isn't an expert in CSR,or in her specialist field of stakeholder engagement and communication. But as a potential editor, employer, client, or reader of hers, would you really put your trust in someone who, from time to time, made a living by stealing other people's work?

It's not just journalists though. While plagiarism in academia is usually discussed in relation to students (and we have to say, this continues to be a big problem in the sector), there are no shortage of cheats standing at the front of the classroom too. Again, our own experience is instructive here.

A few months back, it came to our attention that an article published in the journal Management Decision under the title "Sustainability managers or rogue mid-managers? A typology of corporate sustainability managers" and suppposedly written by professors Tang, Robinson and Harvey, was in fact almost entirely plagiarized from a working paper written by Andy and one of our long time friends and collaborators, Wayne Visser. After someone had kindly pointed this out to us, we informed the journal who did some checking and then retracted the offending piece, acknowledging that "a large proportion" of the article had been copied from ours.

We also did a little further digging and discovered that one of the ostensible authors, Kevin Tang, had even plagiarized almost his entire PhD thesis. It took about 5 minutes to find this out given that he'd copied almost word for word Jennifer Lynes' dissertation about environmental commitment in the airline industry which was easily available on-line. So we informed Lynes (who was suitably shocked) and Bond University in Australia, who had awarded Tang's PhD. They've now taken the online version of Tang's PhD down and informed us that a thorough investigation into the allegations is underway. So you can't check now this one yourself, but believe us, it is a cut-and-dried case of plagiarism, even down to the personal acknowledgments page!

We'd love to believe that these are just isolated incidents, but realistically we think it is just the tip of the iceberg. Both of these cases came to light by accident just in the last few weeks and we only noticed them because they were rip-offs of our own work. Who else is blissfully unaware of getting their CSR research stolen by a so-called expert? And how many other CSR experts are out there passing off someone else's work as their own that we haven't discovered yet?

Academia certainly has been getting into all sorts of cheating scandals recently. Earlier in the year we witnessed the forced resignation of the German Secretary of Defence after revelations of his plagiarized PhD thesis. A few weeks ago, an investigation confirmed that  the noted psychologist Diederik Stapel, the former Dean of the Department of Social and Behavioral Sciences at Tilburg University in the Netherlands, had falsified data and made up entire experiments over the course of the past decade. Unethical journalism has also been in the news of late, especially around the News International phone hacking scandal. Both professions are clearly in need of clean-up.

At the moment, none of these more high profile scandals have been concerned with CSR experts. Not yet, anyway. But if our experience is anything to go by, it's probably just a matter of time.


Photo by loop_oh (Robert Ganzer). Reproduced under Creative Commons licence