Centrum C-LAW.org recommends: Catherine Malecki, "Corporate Social Responsibility - Perspectives in Sustainable Corporate Governance"
What if sustainable corporate governance was the solution to the challenges of the 21st Century (Shared Value, the well-being of stakeholders, the struggle against inequalities, climate change and corporate performance), half-way between Shareholder Primacy and Stakeholder Theory?
CSR belongs to companies and organizations. This essay offers a pedagogical and forward-looking perspective on a CSR that is driven by American advances, confronted with the English Enlightened Shareholder Value Principle and steered by European influences, which are, in turn, influenced by the Scandinavian approach.
The first part of this essay shows how extra-financial information is being called upon to play a determining role in what can now be identified as "sustainable corporate governance". It creates a paradigm shift within corporate law since it has not been designed according to its recipients, like shareholders or employees with shares in a company, for example, but instead to nurture an impetus that is both international (the Global Reporting Initiative) and European (as promoted by a number of recommendations, resolutions and communications issued by various EU bodies). It is intended for recipients that go beyond traditional spheres of corporate law (internal or external stakeholders), through public opinion analysis that is both punctual (issuing management reports) and continuous (based on topical events linked to corporate activities, pollution or sustainable investment).
At the dawn of the 21st Century, CSR provides an opportunity to "destructure" a form of corporate governance that can be qualified as "traditional", insofar as it has appeared on the landscape of corporate law to "restructure" this new corporate governance over the past twenty-five years. Due to requirements demanding "consistency with European and international documents", the "wide lens" of its legal sources becomes the basis on which to build a "world CSR".
The second part of this essay presents this new corporate governance cycle as a key component of CSR: its characteristics are essentially those of "behavioural" corporate governance, thus linking it with Howard Bowen's seminal work, published in 1953. The Board of Directors is a prime example, or a "showcase" for this form of governance, which rests upon the qualities of both women and men (courage and a clear interest in CRS, along with training specific to this field). Remuneration based on a so-called CRS index would act as a barometer for this new governance, where performance, charters and ethical codes would flourish. Sustainable compliance would represent tomorrow's "big challenge" (Comply or Report would apply, but under what frame of reference or control mechanisms, and above all, under what code of corporate governance?) Soft Law and Hard Law would provide the ideal cement for the indestructible monument that socially sustainable behaviour seeks to become. But the larger unknown is that of stakeholder expectations and the dialogue that would result from these. This document provides a legal approach to ideas that are normally influenced by the management sciences, with a set of criteria known to legal experts and proven through other legal branches, which could help design a hierarchy of stakeholders. A number of questions also remain with regard to sanctions. Could CSR commitments exclude the possibility of sanctions, since they would initially rest upon the principle of voluntary adherence? This question would not be out of place. Recent developments, however, along with signs from the EU promoting a more limiting form of CSR, point to the use of sanctions.
Here, we address the very basis of corporate governance along with a paradigm shift that reveals how sanctions will evolve on their own (injunction proceedings risking reputations of self-correction for anti-socially responsible behaviour, for example): an e-corporate reputation in motion. A reconciliation with Anglo-Saxon ways of thinking, or more specifically, English ways of thinking in line with the seminal American work of Berle and Means, would help strengthen the Shareholder Primacy and Stakeholder Theory approach: a third path could appear against some of the conditions that are explored in the study.
This new approach, while still in its prospective phase, could materialize under the new CSR definition proposed in an October 25, 2011 communication from the European Commission as "the responsibility of enterprises for their impacts on society". Ambitions surrounding the SSE (Social Solidarity Economy), the objective behind the "other economy", could very well surface. These are promising ideas: the social challenges of CSR reveal that groups of companies are already being reconsidered. It is clear that jurisprudence will help build this monument with new avenues of thought.
The third part of this document is devoted to sustainable financing, with its specific and increasingly specialized "factory" (a very particular institution, born out of the PRI (Principles for Responsible Investment), American works along with those of the EU's EUROSIF), which fits neatly into sustainable corporate governance. Once again, the challenges that surround corporate governance emerge alongside the universal challenges surrounding SRI (Socially Responsible Investment).
Can this back-and-forth between the EU?s influence and the pioneering role of the Anglo-Saxon approach lead to a form of corporate governance that is more efficient, collective and unified in the 21st Century? This essay seeks to answer that question.
Catherine MALECKI is Associate Professor in private law, HCR (Habilitation to conduct researches), at the University Paris Sud, France.
Table of contents
"Corporate Social Responsibility - Perspectives in Sustainable Corporate Governance"
List of Abbreviations
PART ONE: THE CHALLENGES FACING EXTRA-FINANCIAL AUDITING
Chapter 1: The issues
Chapter 2: The Evolution of Extra-Financial Information
Chapter 3: The Constraints of Extra-Financial Information
Chapter 4: Sustainable Accounting
PART TWO: CONDUCT AND SANCTIONS
Title 1: The issues
Title 2: Conduct
Chapter 1: Corporate Administration and Management
Chapter 2: Developing Guides and Labels for CSR Conduct
Chapter 3: Dialogue with Stakeholders
Chapter 4: Company Transactions
Chapter 5: New Paths, New Compasses