Corporate Citizenship and Private Regulatory Regimes: Understanding New Governance Roles and Functions
Private regulatory regimes have emerged as an increasingly important component of global social ordering, with potentially significant implications for corporate decision-making and the conventional theory of the firm and corporate governance, institutionalization of the values of corporate citizenship, and understandings of the technologies of business ethics. Private regulatory regimes do not operate in the same manner as public international law regimes. This chapter describes three notable features of private rule-making (competition among private rule makers, particular importance of consent as basis for private regulation, and importance of “legitimacy” conferring capabilities on the players). The purpose of this chapter is to explore the connections between private regulatory regimes and concepts such as new governance, corporate citizenship and corporate governance. Does private rule-making related to corporate citizenship pose new challenges or raise novel questions concerning conventional theories or understandings of the firm and corporate governance, global regulation of corporations, and theories of how social and environmental behaviours of corporations are institutionalized? The main conclusions of the chapter are that yes, private rule making in the global corporate citizenship context stimulates new thinking concerning how and why firms participate in global private rule making pertaining to corporate citizenship, how such activities can be aligned or understood in light of the conventional theories of the firm which downplays relational implicit contracts with stakeholders and sees the firm as a nexus of formal contracts, and the conventional focus of institutional theory on firms as seekers (not bestowers) of legitimacy. In short, the phenomenon of private regulatory regimes in support of global corporate citizenship stimulates new thinking on a number fronts that in turn suggest new directions in research concerning corporate theory and practice.
KeywordsPrivate regulation Governance Corporate citizenship Globalization Legitimacy
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