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Leadership, Accountability, and Partnership: Critical Trends and Issues in Corporate Social Responsibility. Report of the CSR I

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Leadership, Accountability, and Partnership: Critical Trends and Issues in Corporate Social Responsibility. Report of the CSR I LEADERSHIP, ACCOUNTABILITY AND PARTNERSHIP: CRITICAL TRENDS AND ISSUES IN CORPORATE SOCIAL RESPONSIBILITY The Kennedy School of Government Corporate Social Responsibility Initiative Report of the Launch Event March 4, 2004 A Report of the CORPORATE SOCIAL RESPONSIBILITY INITIATIVE A cooperative project among: The Center for Business and Government The Center for Public Leadership The Hauser Center for Nonprofit Organizations The Joan Shorenstein Center on the Press, Politics and Public Policy Citation This paper may be cited as: Nelson, Jane. 2004. “Leadership, Accountability, and Partnership: Critical Trends and Issues in Corporate Social Responsibility.” Report of the CSR Initiative Launch Event. Corporate Social Responsibility Initiative, Report No. 1. Cambridge, MA: John F. Kennedy School of Government, Harvard University. Comments may be directed to the author. Corporate Social Responsibility Initiative The Corporate Social Responsibility Initiative at the Kennedy School of Government is a multi-disciplinary and multi-stakeholder program that seeks to study and enhance the public contributions of private enterprise. It explores the intersection of corporate responsibility, corporate governance and strategy, public policy, and the media. It bridges theory and practice, builds leadership skills, and supports constructive dialogue and collaboration among different sectors. It was founded in 2004 with the support of Walter H. Shorenstein, Chevron Corporation, The Coca-Cola Company, and General Motors. The views expressed in this paper are those of the author and do not imply endorsement by the Corporate Social Responsibility Initiative, the John F. Kennedy School of Government, or Harvard University. For Further Information Further information on the Corporate Social Responsibility Initiative can be obtained from the Program Coordinator, Mossavar-Rahmani Center for Business and Government, John F. Kennedy School of Government, 79 JKF Street, Cambridge, MA 02138, telephone (617) 495-1446, telefax (617) 496-5821, email [email protected]. The homepage for the Corporate Social Responsibility Initiative can be found at: http://www.ksg.harvard.edu/m-rcbg/CSRI/ Contents I. Key Messages and Conclusions.............................................................. 3 II. Summary of Pre-Conference Survey.................................................... 21 III. Conference Presentations.................................................................... 25 1. Setting the Context..................................................................................................................................................25 CSR and Global Governance: Drivers and Trends................................................................................................25 Risks, Opportunities and New Models on the CSR Horizon.................................................................................29 2. New Models of Governance and Accountability.......................................................................................................37 3. New Partnerships to Mobilize Private Sector: Engagement in Community and International Development............49 IV. Examples of Partnership Models ......................................................... 56 V. Next Steps of the Corporate Social Responsibility Initiative................. 60 Leadership for CSR.......................................................................................................................................................61 Strategic Business Case for CSR ..................................................................................................................................62 Accountability ...............................................................................................................................................................62 Partnerships to Build Public Capacity...........................................................................................................................62 Appendices................................................................................................ 64 APPENDIX I: Participating Research Centers...............................................................................................................64 APPENDIX II: Founding Supporters .............................................................................................................................65 APPENDIX III: Examples of Partnerships Aimed to Achieve Systemic Interventions .....................................................66 APPENDIX IV: Background Papers and Articles............................................................................................................70 APPENDIX V: Participant List.......................................................................................................................................72 Acknowledgements: This paper was designed by Michelle Limaj, edited by Jordana Rubel, and written by Jane Nelson. For further information on the Kennedy School's CSR Initiative please check our website: http://www.ksg.harvard.edu/cbg/CSRI/ or call Jane Nelson at (617) 496 7706. 2 I. Key Messages and Conclusions The concepts of corporate social responsibility (CSR) and corporate citizenship have been part of the business lexicon and the focus of academic study for many years. Over the past decade, however, they have grown to encompass a more complex, multi-dimensional and global set of issues, with strategic implications for both business leaders and policy makers. This process has been driven by a combination of factors. These include: “Corporate social responsibility is not only a business challenge. Even more Political transformation, market liberalization, important, it concerns the relationship privatization and technical innovations, which have between business and society, the increased the global reach and influence of the respective rights and obligations of private sector, at the same time that they have different social sectors and actors - challenged the ability of nation states to govern government, the media, and civil society the global public domain. The growth in reach and organizations, as well as business - and influence of private enterprises has conferred the relative efficacy of voluntary versus global companies with new rights and regulatory approaches to meeting social opportunities, but also created new competitive needs. Questions of governance are pressures and increased demands for corporate involved at every step of the way. responsibility. - Professor John Ruggie The increased financial muscle and activism of Weil Director, Center for Business and institutional investors, who together with Government, and Faculty Chair, Corporate regulators have responded to the spate of Social Responsibility Initiative corporate ethics scandals and governance crises with calls for better corporate governance, and greater corporate accountability, transparency and legitimacy. Growth in the number, sophistication and connectivity of well-informed civil society organizations, which are calling for increased corporate responsibility and have unprecedented outreach and campaigning capability through the Internet and a global media. Greater awareness by governments and companies that the social, economic, environmental and security challenges facing the world are too great and the resources for meeting these challenges are too dispersed for any one sector to be able to tackle them alone. This is the case whether it is managing the public parks system of New York city or reforming public health systems in Africa. As a result of these drivers, corporate social responsibility is becoming more mainstream to business and more relevant to public policy, with implications not only for corporate governance, corporate strategy and risk management, but also for national and global governance. It is within this context that the Kennedy School of Government has established its new CSR Initiative. 3 “Corporate social responsibility is The initiative is based on the underlying premise that becoming a more central factor in while governments ultimately bear the responsibility for determining corporate success and ensuring public welfare, there is a need to construct a legitimacy. It is also becoming more new understanding of the roles, responsibilities and relevant to public policy makers, the boundaries of the private sector, especially major media, investors, consumers, employees, corporations, and to explore new types of partnership, trade unions, and other actors who and new governance and business models for creating regulate, monitor or otherwise influence public value. Another key underlying premise of the business behaviour and performance. CSR Initiative is that corporate responsibility needs to This has implications not only for be viewed as the totality of a company’s impacts on and contributions to society – in particular its core corporate governance, corporate strategy business operations, stakeholder relationships and and enterprise risk management, but also public policy positions – not only corporate compliance for national and global governance.” and philanthropy. The initiative uses the framework outlined below as its basis for defining corporate social - Jane Nelson, Director, CSR Initiative, responsibility. Kennedy School of Government Defining Corporate Social Responsibility The CSR Initiative takes a strategic approach to defining corporate
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