Archive:
Roles and incentives - the core problems of corporate social responsibility

Corporate social responsibility as we know it is a product of only the past 15 years. While debates over the role of business in society go back to the beginnings of the corporation, it is only since the early 1990s that the phrase itself has attained currency and developed as a major aspect of the public debate over social and economic institutions. Corporate social responsibility has finally reached the status of a major social movement in Europe, and to some extent in Canada and Australia. Much more slowly, and in far more primitive fashion, it is beginning to evolve in the US. The Cadbury Committee, beginning in 1991, the Organisation for Economic Co-operation and Development and the European Union, among others, have got into the act of developing codes of conduct and rules of responsibility for corporations, as have corporations themselves, institutional investors and a variety of non-governmental organisations.

Human factors

While all of this activity helps to highlight issues of the proper role of the corporation in society, it misses the real point about corporate social responsibility. First, corporate social responsibility is about human responsibility and human accountability. And it is about responsibility and accountability in enormously complex endeavours. It is only after we have reconceptualised corporate law to expose human responsibility and human accountability that we hope to employ aspirational and regulatory devices like codes of conduct, which, at best, can hope to speak in sweeping generalities. Second, we must structure our corporations and markets in ways that create incentives for responsible behaviour, or at least remove incentives for irresponsible behaviour.

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