When firm misconduct comes to light, CEOs are often faced with difficult decisions regarding whether and how to respond to stakeholder demands as they attempt to restore their firms’ legitimacy. Prior research largely assumes that such decisions are motivated by CEOs’ calculated attempts to manage stakeholder impressions. Yet, there are likely other motives, particularly those of a morally-relevant nature, that might also be influencing CEOs’ decisions. To address this limitation, we advance moral cleansing as an alternative explanation for how and (...) why CEOs lead their firms to respond to stakeholder demands following the firm’s misconduct and, in turn, whether they can successfully restore their firm’s legitimacy. In the context of firm misconduct, moral cleansing motives reflect CEOs’ desire to restore their threatened moral self-image resulting from the misconduct. We theorize that a CEO’s moral cleansing motives increase the likelihood that their firm will engage in a series of reparative responses that can restore the firm’s legitimacy (i.e., discovery, explanation, penance, and rehabilitation). In addition, we explicate the unique implications of CEOs’ moral cleansing in a post-misconduct context by theorizing how such motives may simultaneously improve one form of their firms’ legitimacy while hindering another. Specifically, we theorize that CEOs’ moral cleansing motives increase (decreases) the authenticity (strategic cognition) of their firm responses, which strengthens (weakens) the effectiveness of those responses on the firms’ ability to restore its moral (pragmatic) legitimacy with stakeholders. We conclude with a discussion of the implications of this work. (shrink)

This paper demonstrates how the UK’s Advertising Standards Authority governs advertising ethics with and on behalf of its members and stakeholders. Drawing on an archive of 310 non-commercial adjudication reports, we highlight the substantive norms and procedural mechanisms through which the ASA governs advertising complaints alleging offence and/or harm. Substantively, the ASA precludes potential normative transgressions by publishing, disseminating, consulting upon, and updating detailed codes of advertising conduct. Procedurally, the ASA adjudicates between allegations and justifications of offence and harm on (...) a received complaint-by-complaint basis, often upon consequentialist grounds. Such consequentialism, we claim, has the effect of normalizing power imbalances between the ASA’s members, on the one hand, and wider stakeholders, on the other hand. The paper argues that, in the context of UK advertising, what Michel Foucault called the right ‘to be or not to be governed like that’ is enjoyed by relatively few subjects. Having demonstrated how UK advertising practices are governed, the paper closes with suggestions as to how they might be governed otherwise. (shrink)

Considering recent theoretical discussions about the concept of moral legitimacy, this study advances our understanding of its performance consequences. Specifically, it uncovers the mediating role of moral legitimacy in the relationship between regulations and industry performance. Our analysis of the U.S. state-level data on regulations in a controversial industry between 1994 and 2010 yields four significant findings. The results show that regulations not only decrease performance but also negatively impact moral legitimacy. Moreover, this study provides empirical evidence that moral legitimacy (...) is positively related to industry performance, providing much-needed direct support for this premise. Importantly, the results indicate that moral legitimacy mediates the effect of regulations on performance, but only when regulations are aligned with moral values. Overall, this study extends our understanding of how regulations influence moral legitimacy, and in turn impact industry performance. (shrink)

Many nongovernmental forms of business regulation aim at reducing ethical violations in commerce. We argue that such nongovernmental ethics standards, while often laudable, raise their own ethical challenges. In particular, when such standards place burdens upon vulnerable market participants (often, though not always, SMEs), they do so without the backing of traditional legitimate political authority. We argue that this constitutes a structural analogy to wars of humanitarian intervention. Moreover, we show that, while some harms imposed by such standards are desirable, (...) others are best thought of as a form of collateral damage. We thus look at the well-developed literature on just war theory for inspiration and find that the principles of jus ad bellum and jus in bello contain many insights that can be fruitfully adapted to the case of nongovernmental standard-setting. Consequently, we propose the Ius ad Normam—a set of principles that should guide would-be standard-setters in assessing whether imposing those burdens is ethically justifiable in particular cases. We also discuss how powerful multinational businesses often act simultaneously as standard-takers and standard-setters and explore the normative implications of this dual role. (shrink)

This paper questions the dominance of market-based mechanisms (MBMs) as the primary means of climate change mitigation. It argues that, not only they are unsuccessful on their own terms, but also they actually make the task more difficult by the unintended consequence of normalising the act of polluting and crowding out alternatives. The theoretical contribution of the paper is to draw a link between two bodies of literature. The first is the business ethics literature on the dominance of market-based rather (...) than direct regulation, and the second is the literature on market ethics, particularly the work of Michael Sandel on how MBMs crowd out non-market norms. The empirical contribution is to use the international maritime transport sector to illustrate the way market-based regulation renders alternatives such as direct regulation and supply-side approaches invisible. (shrink)

The article examines the effects of non-financial disclosure on corporate social responsibility. We conceptualise trade-offs between two ideal types in relation to CSR. Whereas self-regulation is associated with greater flexibility for businesses to develop best practices, it can also lead to complacency if firms feel no external pressure to engage with CSR. In contrast, government regulation is associated with greater stringency around minimum standards, but can also result in rigidity owing to a ‘one-size-fits-all’ approach. Given these potential trade-offs, we ask (...) how mandatory non-financial disclosure has been shaping CSR practices and examine its potential effectiveness as a regulatory instrument. Our analysis of 24 OECD countries using the Asset4 database shows that firms in countries that require non-financial disclosure adopt significantly more CSR activities. However, we also find that NFD regulation does not lead to lower levels of corporate irresponsibility. Furthermore, our analysis demonstrates that, over time, the variation in CSR activities declines as firms adopt increasingly similar practices. Our study thereby contributes to understanding the impact of government regulation on CSR at firm level. We also discuss the limits of mandatory NFD in addressing regulatory trade-offs between stringency and flexibility in the field of corporate social responsibility. (shrink)

In response to stakeholder pressure, companies increasingly make ambitious forward-looking sustainability commitments. They then draw on corporate policies with varying degrees of alignment to disseminate and enforce corresponding behavioral rules among their suppliers and business partners. This goal-based turn in private sustainability governance has important implications for its likely environmental and social outcomes. Drawing on paradox theory, this article uses a case study of zero-deforestation commitments in the Indonesian palm oil sector to argue that goal-based private sustainability governance’s characteristics set (...) the stage for two types of paradoxes to emerge: performing paradoxes between environmental, social, and economic sustainability goals, and organizing paradoxes between cooperation and competition approaches. Companies’ responses to these paradoxes, in turn, can explain the lack of full goal attainment and differential rates of progress between actors. These results draw our attention to the complexities hidden behind governance through goal setting in the corporate space, and raise important questions about the viability of similar strategies such as science-based targets and net-zero goals. (shrink)

In our time, innovation is considered an important way to address societal problems. That we expect so much from innovation to solve the challenges of our time, makes the question what could count as ‘responsible innovation’ more pressing. And that is what this thesis is about. The aim of this thesis is to offer philosophical reflections on responsible innovation in the business context. Since that is still a quite broad topic, the main title suggests its further focus: deliberation and food. (...) The first focus originates from the idea in the academic literature on responsible innovation, that innovators should not just assess by themselves what ‘responsible’ is, but should invite others to think along with them about the social and ethical aspects of innovation. Chapter 2 to 4 zoom in on this aspect of responsible innovation. The second focus has to do with the specific context of application, namely food and the food industry. Chapter 4 and 5 relate the topic of responsible innovation to this context. The question I raise in chapter 2 is whether the ideal of inclusive deliberation is suitable for innovation processes in businesses. I argue that this is not so easy, and provide different reasons why companies might not be willing to involve societal stakeholders into their innovation processes. First, the requirement of deliberation can be tension with the ability of companies to exploit their innovations commercially within a competitive market. Second, deliberation requires a certain degree of transparency about the innovation strategy of a company. Companies might not be willing to provide this transparency, because they fear knowledge leakage to other companies. Third, companies are controlled most often by people with a financial stake. Therefore, we can expect that financial considerations are decisive in the investment decisions of companies. This could conflict with the ideal of responsible innovation to ‘democratize’ innovation processes. Hence, I suggest that scholars should modify the ideal of deliberation in order to make it suitable to the business context, or they should suggest changes in the governance and regulation of markets so as to make deliberation more workable. Chapter 3 discusses the place of conflict and self-interest in deliberation. It starts with a discussion of the literature on stakeholder dialogue. In this literature, the ideal dialogue is presumed to aim at consensus. This also implies that participants avoid conflict and set self-interested considerations aside. I argue that this ideal of dialogue is problematic, especially for a dialogue between companies and NGOs. I show that companies can never completely set aside their profit-orientation, and hence that this ‘self-interest’ always influences their input in a dialogue. Furthermore, conflict and criticism can be necessary to make clear that societal problems require more attention, whether from the general public or from companies. Since the market is an imperfect institution, we need critical citizens and stakeholders such as NGOs to assess the behavior of companies. A certain degree of conflict between companies and NGOs may therefore be more desirable than a focus on consensus. For these reasons, I develop an alternative approach to dialogue in which conflict and self-interest have a legitimate place, and can even play a productive role. In chapter 4, a case-study is conducted to better understand how participants in a dialogue deal with conflicts. In this case-study, I analyzed different dialogues organized by the foundation ‘Ik Kies Bewust’, which issued a front-of-pack health label. In my analysis, I investigate the conflict between, on the one hand, the value of public health and healthy food, and, on the other hand, the commercial interests of companies. In the responses of companies to this conflict, three patterns became visible. First, companies frame their critics as not constructive, because, in their view, they only criticize but do not help to improve the label. Second, they stressed that they are really and genuinely motivated to make food healthier or to make a healthy food choice easier. Thereby, they seemingly tried to counter the image that they are just motivated to make profit. Third, they called on the government to take more control over the label, because this would make the label more reliable and more broadly adopted. I qualify these responses as defensive, which means that the conflict between commercial considerations and public interests is suppressed or ignored. An active response would require to recognize and confront the conflicts and dilemmas that companies face. The case-study makes clear how difficult it can be to engage in dialogue with critical stakeholders. In chapter 5, I reflect on how food innovation can be responsible. In trying to answer this question, I take a certain detour, by starting a discussion about the place of food in a life well-lived. For this purpose, I use the philosophy of Albert Borgmann. On the basis of my analysis of his philosophy, I argue that there are good reasons for engaging with food in active way, for example by growing your own vegetables and home-cooking, instead of consuming food merely passively. I also draw some implications for food innovation. In my view, people responsible for food innovation should critically assess whether new products or services enhance engagement or disengagement. Is it desirable, for example, to develop even more and better pre-packaged meals, or should we stimulate consumers to cook by themselves? I argue that it would be problematic if our overall pattern of dealing with food is characterized by disengagement and convenience, and hence that food innovation should not only go in this direction. (shrink)