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Oliver Balch tackles key topics in academic thinking and research on sustainability
In January 2002 34 chief executives from some of the largest corporations in the world gathered in New York to sign a declaration. “Global corporate citizenship” was the natty title given to this “leadership challenge” by its originators, the prestigious World Economic Forum. Fast forward to today and there’s now a dedicated academic journal on the subject, as well as specialist research centres (at Boston College in the US and Australia’s Deakin University), not to mention a plethora of consultancies and think tanks. But what is corporate citizenship exactly, and does it differ significantly from conventional theories of CSR such as stakeholder theory and corporate social performance?
Consensus around a single conceptual definition of corporate citizenship remain contested. The fact that the term first emerged in the business community and then became adopted by management scholars, rather than vice versa, may explain its definitional fluidity. The early literature falls into one of two camps; the first equates corporate citizenship with strategic philanthropy and internal organisational values (Wood & Logsdon, 2001), while the second broadly conflates it with an externally focused, somewhat woolier equivalent of CSR (Carroll, 1998). So far, so conventional.
The story doesn’t end there, though. The first serious critical interrogation of the term, undertaken by Dirk Matten and Andrew Crane over a decade ago, argued that the theory of corporate citizenship is discernibly distinguishable from CSR’s orthodox parameters. Unsurprisingly, perhaps, their attention fell on the term “citizenship”: a new word for the business community, but one that boasts a long lineage in political theory. The liberal tradition considers citizenship as a collection of rights: civil rights (freedom of abuse and external interference), social rights (the right to education, healthcare, and so forth) and political rights (the ability to vote and hold office).
Where do corporations come in? Partly in their guise as responsible agents: companies must ensure they don’t tread on individual citizen’s rights. But - and this is where potentially the theory goes beyond normative CSR - corporate citizenship also holds that companies act to protect and foster these rights. Why? One word: globalisation. Nation states can no longer act as an effective counterpart of citizenship, the argument goes. That role now sits better with multinational companies, given their trans-jurisdictional reach and wealth-creating capacities. In terms of civil rights, companies’ function is to provide, Matten and Crane argue. For social rights, it’s all about enabling, which in the political realm the corporation essentially serves as an additional conduit.
Criticisms of this theory quickly followed. The liberal tradition holds that with responsibility comes accountability. Who is to hold companies to account, and how, if they begin to fill the gap left by government? Second, corporate citizenship isn’t mandatory. Companies choose to assume the role ascribed to them if it’s in their self-interest. So what if it’s not? Unlike elected governments, citizens cannot vote out a multinational company if it declines to protect/enable/channel their rights. Other critics go further. In their searing critique, Peter Fleming and Marc Jones maintain that the theory legitimises “corporate capture” of the state. Institutional vacuums are exploited by companies to shore up profits, not to cement citizens’ rights, they argue.
Another line of scholarly interest opened up by discussions around corporate citizenship is the idea of companies as “legal persons” or, feasibly, as citizens themselves. The idea of corporations being entitled to some, if not all, citizen rights finds its origins in the US Constitution (grounded in the Fourteenth Amendment’s use of the term “person”) and subsequently in corporate law. The notion of corporations having rights is generally considered a legal fiction, but one that is convenient for contracts, taxation, regulation, et cetera.
The vogue in business rhetoric over recent years for corporations to describe themselves as good citizens has led to a confusing – and erroneous - conflation between citizenship and personhood. This has been taken up by some scholars in the social sciences, who interpret company’s community investment projects as attempts to “embody” (Marina Welker) or “engender” (Elana Shever) the corporation. Corporate critics outside the academy have (cynically?) cemented the idea of the corporate citizen-person, pathologising big business as socially dysfunctional and even psychotic (Joel Bakan). Academics have joined the fray, too. According to Cass Business School’s Bobby Banerjee, the legal sleight-of-hand that allowed for corporate legal personality originated in a desire to “protect private interests, often at the expense of the public”. Bernie Sanders (in what now feels like a previous era) even made its repeal part of his 2016 presidential candidacy.
Fear not. The wrangling over the definition of corporate citizenship and its theoretical implications remains largely confined to the academic literature. Most practitioners continue to see corporate citizenship as more or less synonymous with CSR. If there’s a difference, it is in the former’s emphasis on rights and responsibilities, while the latter speaks only of the second. So, a company’s right to trade and operate in society, but with concomitant responsibilities to protect and enhance society as well.
Carroll, A B 1998. The four faces of corporate citizenship. Business and Society Review, 100(1): 1-7.
Fleming, P & Jones, M 2013. The End of Corporate Social Responsibility: Crisis and Critique. London: Sage
Matten, D and Crane, A., 2005. Corporate citizenship: toward an extended theoretical conceptualization. Academy of Management Review, 30 (1), pp. 166-179.
Wood, DJ and Logsdon, J M 2001. “Theorizing Business Citizenship”. Pp. 83-103 in Perspectives on Corporate Citizenship edited by J. Andriof and M. McIntosh. Sheffield: Greenleaf Publishing.Oliver Balch corporate citizenship CSR accountability philanthropy stakeholders