Business Ethics: A European Review, EarlyView.

We examine corporate governance diversity within a Coasian framework of stakeholder rights, where the central role of governance is to ensure that necessary firm-specific investments are made. This Coasian perspective on stakeholder theory offers a unifying framework towards a global theory of comparative corporate governance, bridging the gap between economic theories of the firm and stakeholder theory, also offering an economics-based alternative to agency theory that explicitly accounts for stakeholder rights. The Coasian perspective encompasses a diversity of corporate governance systems, (...) but does not imply a unique global corporate governance benchmark. We posit that governance is firm dependent and endogenous conditional on the constraints imposed by a national governance system; consequently, there should be no systematic relationship between governance and firm performance once the national constraints are controlled for. However, the same national corporate governance system constraints confer comparative advantages to firms whose efficient levels of firm-specific investments are favored. (shrink)

Managers in Peru, South Africa, and the United States were classified into four groups along Singhapakdi et al. (J Bus Ethics 15:1131–1140, 1996) Perceived Role of Ethics and Social Responsibility (PRESOR) scale. In Peru and the United States, individuals in the ethics and social responsibility first category reported greater satisfaction with organizational performance than did those in the profits first category. Moral capitalists—individuals who report high emphases on both social responsibility and profits—reported the highest satisfaction with performance in the United (...) States. Managers in the United States are more likely than their counterparts in Peru and South Africa to reject the mutual exclusivity of prioritizing social responsibility and profits simultaneously. Directions for future research are outlined. (shrink)

In recent years the benefit corporation has emerged as a new organizational form dedicated to legitimizing the pursuit of corporate social responsibility (CSR). Eschewing traditional governmental authority, the benefit corporation derives its moral legitimacy from the values of its owners and the oversight of a third party evaluator. This research identifies the benefit corporation as a new type of gray sector organization (GSO) and applies extant theory on GSOs to analyze its design. In particular, it shows how the theory of (...) GSO accountability can be used to assess the potential of benefit corporations for enhancing CSR. This research first examines the statutes that have established benefit corporations in five states in the US, along with bills in other states, to show how legislation defines their specific public benefits and holds them accountable for delivering these benefits. It then compares the accountability of the benefit corporation with that of other corporate - centric GSOs, e.g., GSOs that closely resemble traditional corporations. It concludes with significant design-based concerns about the utility of the benefit corporation as an effective organization for implementing CSR. (shrink)

For four decades, research on the role and responsibilities of business in society has centered on the business case for corporate social responsibility (CSR) and an increasing number of studies on the corporate social performance (CSP)—corporate financial performance (CFP) link emerged leading to controversial results. Heeding the call for a deeper understanding of the mechanisms linking certain CSR efforts to certain performance outcomes, this study provides a stakeholder-based organizing framework rooted in an extensive review of existing literature on the link (...) between CSP and CFP. In so doing, we aim at guiding research and practice toward less simplistic understandings of the CSP–CFP connection, thus advancing the debate over the consequences of voluntary integrating CSR into business operations and into relationships with stakeholders. By disentangling specific drivers and outcomes of the CSP–CFP link, we underline the importance of setting clear boundaries and specifying levels of analysis to generate comparable results. (shrink)

The aim of the paper is to investigate the effects of the corporate governance model on social and environmental disclosure (SED). We analyze the disclosures of the 100 U.S. Best Corporate Citizens in the period 2005–2007, and we posit a series of simultaneous relationships between different attributes of the governance system and a multidimensional construct of corporate social performance (CSP). We consider both the extent and the quality of SED, with the purpose of identifying increasing levels of corporate commitment to (...) stakeholders and shedding some light on whether SED is used as a signal or rather as a legitimacy tool. Our empirical evidence shows that the stakeholders’ orientation of corporate governance is positively associated with CSP and SED. On the other hand, we do not find support for the monitoring intensity of corporate governance being negatively associated with social performance. We also find that CSP in the “product” dimension is positively associated with the extent and quality of SED whilst CSP in the “people” dimension is negatively associated with the extent and quality of SED. At a time when shareholders and stakeholders share more common aspects in their relationships with firms, this is a significant area to explore and this research fills an important lacuna in this respect. (shrink)

We draw on Alasdair MacIntyre's virtues, practices, and institutions schema to argue that employee participation in governance practices can play an important role in developing virtue. Whereas MacIntyre's schema has been most widely employed to understand how productive practices can cultivate virtue, we focus instead on the way that meaningful deliberation about the common good can provide experiences requiring employees to exercise the virtues. We then apply this theoretical framework to an analysis of the Mondragon Cooperative Corporation. Our analysis emphasizes (...) the importance of participatory governance over employee ownership. Based on this analysis, we draw several implications for increasing participatory governance in a way that will prevent shareholder maximization from crowding out virtue, even in corporate contexts where productive activity itself does not provide a meaningful, virtue-instilling experience. (shrink)