Edited by Güler Aras and David Crowther, Global Perspectives on Corporate Governance and CSR is a vital exploration of issues around the possibility of developing theories and practice aimed at good corporate governance and good corporate behavior.
In the opening essays, the editors slice and dice the topics several different ways. They look at governance from the perspective of top down, consensusual, networks and markets. Eight principles are reviewed: transparency, rule of law, participation, responsiveness, equity, efficiency and effectiveness, sustainability, and accountability. Systems analyzed include Anglo-Saxon, Latin, and Ottoman models. Then they discuss the overlap with corporate social responsibility of concepts such as transparency, accountability, responsibility and fairness. The rules versus principles debate, the divorce between owners and managers, risk and rewards are weighed.
Moving on to CSR, they discuss roots in Robert Owen, stakeholder theory, the ever changing semiotic nature of assumed understanding, especially with regard to terms like sustainability. A typology is proposed, moving from window dressing to cost containment, stakeholder engagement, measurement/reporting, sustainability, transparency and finally to accountability, reflecting increased maturity not unlike Maslow’s hierarchy of needs.
These variables, concerns and framework are then again parsed by country and culture, as understood in an increasingly global environment. Sustainability is discussed as a moving target. No longer merely concerned with the financial resources of the firm but all the physical resources of the planet. Good financial and environmental performance in the present is an investment in the future of the company. There is no dichotomy, since the concepts conflate into one concern. A global framework is in the making and diverse cultures each have something to offer.
The bulk of the book is then broken down into three parts, representing regional, local and then theoretical perspectives. We more from Europe to Japan, Latin America to Africa — then on to evolution in developing countries, state enterprises, family firms and the use of technology in advancing corporate governance. One finding is similar reform efforts being undertaken in many countries aimed at increased investor protection, transparency, accountability and professional board work. Convergence is also seen in Japan, where the traditional stakeholder model may be evolving to more North American models. Similarly in Africa, a hybrid approach is developing that integrates western style models with pragmatic developmental needs, contributing to an economic democracy that may some day direct and control corporations for the common good.
The book concludes with chapters which attempt to integrate current knowledge into theory. Kurt Strasser looks at problems associated with layers of legally separate corporations, subsidiaries, and calls for a more holistic "enterprise" analysis to get around current legal formalities. Thomas Clarke and Alice Klettner support Robert Hinkley’s 28 Words to Redefine Corporate Duties. Directors are to act in the best interests of the company.. "but not at the expense of the environment, human rights, the public health or safety, the communities in which the corporation operates or the dignity of its employees." Clarke and Klettner remind us:
The problem of material production has essentially been solved. The primary remaining global dilemmas are that overproduction and massive surpluses still coexist with desperate poverty and need, and that the resource base for industry is rapidly depleting and damaging, potentially irreparably, the eco-system. It is possible that confronting these dilemmas will force the rethinking of corporate objectives, structures, and activities that is necessary.
The editors wrap up the text nicely, expressing concern with the trajectory of accounting, where profit is brought forward before it is earned and liabilities can be ignored if they reduce current profitability. They reject Locke’s notion that the whole purpose of society is to safeguard the rights of individuals. Instead, they embrace Tocqueville’s argument that government should regulate individual transactions to safeguard against circumstances where the welfare of some is advanced at the expense of others. We are left to confront the central problem with Liberalism; "the mediation of rights between different individuals only works satisfactorily when the power of individuals is roughly equal."
As to corporate reporting, Aras and Crowther see it no longer focused on past accomplishments but on benefits to be accrued, not as a communication medium "but rather a mechanism for self promotion." GRI and AA1000 are discussed as important integrative reporting initiatives but critics would say "it is only under the Anglo-Saxon model of governance that there could ever be a need for CSR." The Cartesian dichotomy doesn’t arise in Latin or Islamic models. Of course, the Anglo-Saxon model appears to be dominant, so integrative efforts are needed. The editors conclude that any such developing standard must be sufficiently flexible to "allow for the full extent of cultural variation throughout the world."
Given the state of inequality between not only individuals but countries, it is hard to see how such standards will be mediated. although this volume sets a high standard in the necessary task of exploring the issues needing resolution before corporate governance and CSR can be fully integrated.