In a globalizing world, governments are not always able or willing to regulate the social and environmental externalities of global business activities. Multi-stakeholder initiatives (MSI), defined as global institutions involving mainly corporations and civil society organizations, are one type of regulatory mechanism that tries to fill this gap by issuing soft law regulation. This conceptual paper examines the conditions of a legitimate transfer of regulatory power from traditional democratic nation-state processes to private regulatory schemes, such as MSIs. Democratic legitimacy is (...) typically concerned with input legitimacy (rule credibility, or the extent to which the regulations are perceived as justified) and output legitimacy (rule effectiveness, or the extent to which the rules effectively solve the issues). In this study, we identify MSI input legitimacy criteria (inclusion, procedural fairness, consensual orientation, and transparency) and those of MSI output legitimacy (rule coverage, efficacy, and enforcement), and discuss their implications for MSI democratic legitimacy. (shrink)

The United Nations (UN) Global Compact’s journey over the last 12 years can be summarized as building and integrating UN issues into the global corporate responsibility movement. This summary begs the question as to how a policy speech developed for the UN secretary-general has evolved into an innovative public–private partnership initiative. This article argues that the following four factors contributed to creating enabling ingredients for the UN Global Compact’s growth: continued relevance of the initiative’s underlying idea, sustained institutional leadership support, (...) governmental support (political back-up), and operational viability. Based on the author’s personal experience with the initiative from its inception, the article highlights what is required for an initial idea to be developed into a vibrant operational entity in the context of a multilateral organization. Specially, the article reflects on how the aforementioned four attributes have interacted with each other throughout the last 12 years. (shrink)

This article reviews the interdisciplinary literature on the UN Global Compact. The review identifies three research perspectives, which scholars have used to study the UN Global Compact so far: a historical perspective discussing the Global Compact in the context of UN-business relations, an operational perspective discussing the composition and impact of its participants, as well as a governance perspective discussing the constraints and opportunities of the initiative as an institutionalized arena for addressing global governance gaps. The authors contrast these three (...) perspectives and identify key empirical as well as conceptual scholarly contributions. The remainder of this article contains focused summaries of the articles selected for this Special Issue. All articles are introduced and evaluated against the background of the three research perspectives. (shrink)

The United Nations Global Compact (UNGC) was created in 2000 to leverage UN prestige and induce corporations to embrace 10 principles incorporating values of environmental sustainability, protection of human rights, fair treatment of workers, and elimination of bribery and corruption. We review and analyze the GC’s activities and impact in enhancing corporate social responsibility since inception. First, we propose an analytical framework which allows us to assess the qualities of the UNGC and its principles in the context of external and (...) internal elements that influence code effectiveness and implementation. Second, we analyze UNGC performance in encouraging companies to become signatory members and bring about demonstrable change in corporate CSR-sustainability activities. In its 10-year report, UNGC has proclaimed growth in both membership and program activity. However, all credible and publicly available data and documentation conclusively demonstrate that the UNGC has failed to induce its signatory companies to enhance their CSR efforts and integrate the 10 principles in their policies and operations. The result has been a loss of public trust and support of UNGC from important constituencies among civil society organizations, and those individuals and groups adversely impacted by corporate activities and resultant negative externalities. This diminished credibility has also made UNGC largely dependent on the corporate sector for its very survival. We conclude that this dependence has in turn impaired and would continue to hinder UNGC’s ability to fulfill its mission. Such an outcome raises serious questions as to the viability, usefulness, and continued existence of UNGC. (shrink)

The Forest Stewardship Council (FSC) is a global private governance system overseeing the sustainability and biodiversity of the world forestry system through certification of forests and forestry processes and products, and is perceived as the strongest of the various certification schemes available (Domask, Globalization and NGOs: Transforming Business, Government, and Society , 2003 ; Gulbrandsen, Global Environmental Politics , 2004 ). It has seen more success in developed than developing countries in terms of amount of forest certified and number of (...) chain-of-custody certificates issued, raising questions as to its ability to promote biodiversity Gulbrandsen, Global Environmental Politics , 2004 ). A number of challenges have risen to the pragmatic and moral legitimacy of the FSC as a global governance system: alternative certification schemes, output and market access, cost of certification, plantations, and illegal logging. I examine each of these challenges as they pertain to the dimensions of pragmatic and moral legitimacy of the FSC. I conclude with a discussion of theoretical implications for global governance systems using ecolabel schemes, as well as a discussion of practical implications for the FSC in particular. (shrink)

The United Nations Global Compact – which is a Global Public Policy Network advocating 10 universal principles in the areas of human rights, labor standards, environmental protection, and anticorruption – has turned into the world's largest corporate responsibility initiative. Although the Global Compact is often characterized as a promising way to address global governance gaps, it remains largely unclear why this is the case. To address this problem, we discuss to what extent the initiative represents an institutional solution to exercise (...) global governance. We suggest that new governance modes, which have arisen in the context of globalization, often adopt a multiactor, multilevel, and network-based approach. We then analyze how far the Global Compact's institutional design reflects this multiactor, multilevel, and network-based steering mode. Drawing on this discussion, we offer suggestions regarding how the initiative can be further developed. (shrink)

From an analysis of the role of companies in multi-stakeholder networks and a critical review of stakeholder theory, it is argued that companies practise two different types of stakeholder management: they focus on their organization’s welfare (organization- focussed stakeholder management) or on an issue that affects their relationship with other societal groups and organizations (issue-focussed stakeholder management). These two approaches supplement each other. It is demonstrated that issue-focussed stakeholder management dominates in multi-stakeholder networks, because it enables corporations to address complex (...) problems and challenges in cooperation with stakeholders. Since deliberation is the key to issue-focussed stakeholder management, it helps to cope with numerous and at times contradictory stakeholder demands and enhances the legitimacy of corporate activities. (shrink)

Multi-stakeholder initiatives have become a vital part of the organizational landscape for corporate social responsibility. Recent debates have explored whether these initiatives represent opportunities for the “democratization” of transnational corporations, facilitating civic participation in the extension of corporate responsibility, or whether they constitute new arenas for the expansion of corporate influence and the private capture of regulatory power. In this article, we explore the political dynamics of these new governance initiatives by presenting an in-depth case study of an organization often (...) heralded as a model MSI: the Forest Stewardship Council. An effort to address global deforestation in the wake of failed efforts to agree a multilateral convention on forests at the Rio Summit in 1992, the FSC was launched in 1993 as a non-state regulatory experiment: a transnational MSI, administering a global eco-labeling scheme for timber and forest products. We trace the scheme’s evolution over the past two decades, showing that while the FSC has successfully facilitated multi-sectoral determination of new standards for forestry, it has nevertheless failed to transform commercial forestry practices or stem the tide of tropical deforestation. Applying a neo-Gramscian analysis to the organizational evolution of the FSC, we examine how broader market forces and resource imbalances between non-governmental and market actors can serve to limit the effectiveness of MSIs in the current neo-liberal environment. This presents dilemmas for NGOs which can lead to their defection, ultimately undermining the organizational legitimacy of MSIs. (shrink)

Regulatory schema has shifted from government to governance-based systems. One particular form that has emerged at the international level is the multi-stakeholder voluntary code of conduct (MSVC). We argue that such codes are not only simply mechanisms by which various stakeholders attempt to govern the action of the corporation but also systems by which each stakeholder attempts to gain or retain some legitimacy goal. Each stakeholder is motivated by strategic legitimacy goal to join the code, and once a member, is (...) also required to assist in maintaining the institutional legitimacy of the code, resulting in “networked legitimacy.” We begin our analysis of these systems by first exploring the growth and structure of such MSVCs, and then building an analytical framework using strategic and institutional legitimacy as they apply to such MSVCs. We contribute to the codes of conduct literature by developing the construct of networked legitimacy from strategic and institutional legitimacy. We then apply our framework to the United Nations Global Compact, one of the predominant MSVCs today. In doing so, we: (1) demonstrate how different stakeholders are pursuing different types of legitimacy through their participation in the code, (2) examine the specific opportunities and risks in terms of what we have called “networked legitimacy” posed by the institutional design of actual MSVCs, and (3) create an argument for three pillars supporting the legitimacy of MSVCs. (shrink)

In multi‐stakeholder networks, actors from civil society, business and governmental institutions come together in order to find a common solution to a problem that affects all of them. Problems approached by such networks often affect people across national boundaries, tend to be very complex and are not sufficiently understood. In multi‐stakeholder networks, information concerning a problem is gathered from different sources, learning takes place, conflicts between participants are addressed and cooperation is sought. Corporations are key actors in many networks, because (...) the problems addressed are frequently related to business activities. The aim of this article is to conceptualise multi‐stakeholder networks by proposing a problem‐centred stakeholder definition. From an analysis of several case studies, a life cycle model is deduced that distinguishes seven phases: initiation, acquaintance, first and second agreement, implementation, consolidation and institutionalisation. (shrink)

The United Nations Global Compact – which is a Global Public Policy Network advocating 10 universal principles in the areas of human rights, labor standards, environmental protection, and anticorruption – has turned into the world's largest corporate responsibility initiative. Although the Global Compact is often characterized as a promising way to address global governance gaps, it remains largely unclear why this is the case. To address this problem, we discuss to what extent the initiative represents an institutional solution to exercise (...) global governance. We suggest that new governance modes, which have arisen in the context of globalization, often adopt a multiactor, multilevel, and network-based approach. We then analyze how far the Global Compact's institutional design reflects this multiactor, multilevel, and network-based steering mode. Drawing on this discussion, we offer suggestions regarding how the initiative can be further developed. (shrink)

This article evaluates the potential of the current Corporate Social Responsibility (CSR) agenda for addressing issues related to societal governance. The investigation focuses on the experience of the oil and gas sector, which has been among the leading industry sectors in championing CSR. In particular, the article analyses the issue of revenue transparency, which has been the principal governance challenge addressed by multinational oil and gas companies. The article suggests that (1) tackling governance challenges is crucial to addressing the impact (...) of corporate activities; (2) current CSR and policy initiatives are entirely insufficient in addressing governance challenges and (3) corporate activities may be contributing to governance failures. (shrink)

The United Nations Global Compact’s journey over the last 12 years can be summarized as building and integrating UN issues into the global corporate responsibility movement. This summary begs the question as to how a policy speech developed for the UN secretary-general has evolved into an innovative public–private partnership initiative. This article argues that the following four factors contributed to creating enabling ingredients for the UN Global Compact’s growth: continued relevance of the initiative’s underlying idea, sustained institutional leadership support, governmental (...) support , and operational viability. Based on the author’s personal experience with the initiative from its inception, the article highlights what is required for an initial idea to be developed into a vibrant operational entity in the context of a multilateral organization. Specially, the article reflects on how the aforementioned four attributes have interacted with each other throughout the last 12 years. (shrink)