Responsible Corporate Governance: Coordinating Efficiency and Justice

IVR World Congress Beijing September 15-19, 2009 Pitman B Potter

Abstract
Corporate go!ernan"e and "orporate so"ial responsibilit# in!ol!e internal and e$ternal e$pressions o% t&e operational imperati!es o% b'siness %irms W&ereas "orporate go!ernan"e o%ten entails prin"iples o% e%%i"ien"#, CSR in!ol!es prin"iples o% %airness (&is paper )ill e$amine t&e "&allenge o% "oordinating norms o% "orporate so"ial responsibilit# )it& pra"ti"es o% "orporate go!ernan"e W&ile CSR in!ol!es primaril# iss'es or relations bet)een b'siness %irms and t&e o'tside "omm'nit#, "orporate go!ernan"e is largel# an internal matter *nd )&ile CSR "on"erns "&allenges o% j'sti"e +so"ial, e"onomi", en!ironmental, et" , %or t&ose )&o are a%%e"ted b# b'siness be&a!ior in t&e )orld, "orporate go!ernan"e generall# addresses iss'es o% e%%i"ien"# in b'siness management )it&in t&e %irm In"l'ding CSR norms in t&e pro"esses %or strengt&ening "orporate go!ernan"e %a"es "&allenges similar to t&ose %a"ing t&e problem o% "oordinating "omplian"e )it& international trade and &'man rig&ts standards (&ese di%%i"'lties stem in part %rom "on"ept'al di%%eren"es and ass'med trade-o%%s bet)een regimes o% e%%i"ien"# and j'sti"e, as )ell as %rom general la"- o% "omm'ni"ation and "ollaboration bet)een spe"ialists in!ol!ed in t&ese di%%erent se"tors . less prono'n"ed per&aps t&an t&e di!ide bet)een trade and &'man rig&ts spe"ialists b't real nonet&eless /ra)ing on t&e a't&or0s paradigms o% Selective Adaptation and Institutional Capacity, t&is paper )ill e$amine t&e normati!e and organi1ational "&allenges to "oordinating CSR norms )it& "orporate go!ernan"e pra"ti"es in C&ina /ra)ing on t&ese normati!e and organi1ational perspe"ti!es and lo"al e$amples, t&e paper )ill e$amine t&e possibilities and obsta"les to "oordinating CSR and "orporate go!ernan"e standards (&e paper )ill ser!e as a "ase st'd# on t&e broader topi" o% "oordinated "omplian"e

Coordinating norms o% "orporate so"ial responsibilit# )it& pra"ti"es o% "orporate go!ernan"e mirrors man# o% t&e "&allenges %a"ing "oordinating prote"tion o% trade and &'man rig&ts S'"& "oordination is an iss'e o% "riti"al importan"e %or a )orld o% International a"ademi" and poli"# in"reased globali1ation and interdependen"e

dis"o'rses &a!e made signi%i"ant "ontrib'tions to 'nderstanding and de%ining t&e parameters %or international trade poli"# and &'man rig&ts poli"# C&allenging a"ademi" and poli"# dis"o'rses t&at treat trade and &'man rig&ts as separate and potentiall# "on%li"ting regimes, "oordination o% trade and &'man rig&ts "omplian"e in!ol!es b'ilding normati!e and instit'tional %o'ndations t&at en"o'rage en%or"ement o% international standards in bot& se"tors International trade and &'man rig&ts &a!e m'ltiple related "onte$ts and m't'al in%l'en"es 2or e$ample, trade liberali1ation r'les restri"ting go!ernment assistan"e to nas"ent ind'stries &a!e potential impa"ts on &'man rig&ts iss'es o!er labor standards in de!eloping e"onomies *s )ell, &'man rig&ts imperati!es on iss'es o% &ealt& and &o'sing rig&ts "an a%%e"t m'ltilateral e%%orts to entren"& e%%i"ien"# priorities in trade relations Coordination also a%%e"ts t&e poli"# ma-ing "onte$t )it&in )&i"& trade and &'man rig&ts matters are "onsidered and de"ided 3in-ages bet)een trade and &'man rig&ts o't"omes merit intensi!e resear"& on "onditions %or "oordinated "omplian"e )it& international trade and &'man rig&ts standards Resear"&-dri!en poli"# proposals on "oordinated "omplian"e )it& international trade and &'man rig&ts standards "an o%%er a range o% best pra"ti"es %or C&ina and ot&er e"onomies to %a"ilitate international "ooperation in a )ide arra# o% so"io-e"onomi" and politi"al relations&ips It is 'se%'l t&ere%ore to %ore"ast "onditions %or "oordinated "omplian"e )it& international trade and &'man rig&ts standards Predi"table "oordination "an in t'rn %a"ilitate stronger "ooperation in trade and &'man rig&ts relations, s'"& t&at e$panded trade "onne"tions "an be demonstrated to "ontrib'te to impro!ed &'man rig&ts "onditions and !i"e !ersa *ddressing t&e needs o% "oordinated trade and &'man rig&ts "omplian"e t&ro'g& domesti" e"onomi" and so"ial reg'lation )ill bene%it m'ltiple se"tors o% C&ina0s de!elopment proje"t Coordinated "omplian"e also &as impli"ations %or per%orman"e o%

international treat# standards in areas s'"& as se"'rit#, "limate "&ange, and reso'r"e and te"&nolog# poli"# C&allenges o% labor relations, &ealt& "are, and en!ironmental prote"tion are -e# poli"# iss'es %or t&e PRC go!ernment 4o)e!er, t&e p'bli" se"tor meas'res alone )ill li-el# be inade5'ate to address t&ese problems e%%e"ti!el# 6reater parti"ipation b# t&e pri!ate (&is se"tor )ill be essential 4en"e t&ere is a great need to "oordinate p'bli" se"tor e%%orts to redress labor, &ealt&, and en!ironmental iss'es )it& pri!ate se"tor initiati!es managing a transition %rom !ol'ntar# e%%orts to gen'ine "omplian"e (&e relations&ip bet)een "orporate go!ernan"e and "orporate so"ial responsibilit# e"&oes man# o% t&e tensions t&at &amper "oordination bet)een trade and &'man rig&ts poli"# and pra"ti"e Corporate go!ernan"e models, s'"& as t&at e$pressed t&ro'g& t&e Compan# 3a) o% t&e PRC, emp&asi1e s&are&older interest and a""o'ntabilit# o% dire"tors and managers, b't t&ese are "o'"&ed in terms o% b'siness interest . ret'rn on in!estment, pro%itabilit# and t&e li-e Corporate so"ial responsibilit# addresses a n'mber o% t&emes in relations )it& so"iet# at large, o% )&i"& labo'r management, &ealt& "are, and en!ironmental prote"tion are -e# e$amples W&ile t&e t&emes o% e%%i"ien"# t&at in%orm "orporate responsibilit# paradigms and t&e imperati!es o% %airness t&at "&ara"teri1e CSR ideals tend to operate at "ross-p'rposes, t&e# need not do so 7ne possible approa"& to ens'ring t&at "orporate go!ernan"e d#nami"s s'pport t&e goals o% "orporate so"ial responsibilit# )o'ld be t&ro'g& en%or"ing t&e p'bli" interest "riteria %or !alidit# o% "ontra"ts 'nder t&e Contra"t 3a) o% t&e PRC pro!ides an important opport'nit# %or strengt&ening "orporate so"ial responsibilit# and