Business and the Greater Good

Business and the Greater Good

Rethinking Business Ethics in an Age of Crisis

Studies in TransAtlantic Business Ethics series

Edited by Knut J. Ims and Lars J.T. Pedersen

With cutting-edge insights from leading European and North American scholars, this authoritative book addresses the fundamental problems of business in an age of crisis whilst presenting radical, but practical, solutions.

Chapter 11: Developing a framework for critiquing multi-stakeholder codes of conduct

S. Prakash Sethi and Donald H. Schepers

Subjects: business and management, business ethics and trust, corporate social responsibility, international business


Recent years have seen the development of a number of non-state regulatory regimes (e.g., the UN Global Compact, the Extractive Industry Transparency Initiative, the Forest Stewardship Council, etc.). A number of articles have commented on a variety of these regimes. Ann Zammit (Utting and Zammit 2006, 2009; Zammit 2003) has written extensive critiques on the Global Compact, as have also Georg Kell (Kell 2003, 2005; Kell and Levin 2003), Andreas Rasche (2009; Rasche and Kell 2010) and John Ruggie (2001, 2002, 2008, 2010) in its defense. Sethi and colleagues have examined the Extractive Industries Transparency Initiative (2006). The Forest Stewardship Council has received a great deal of attention (Gulbrandsen 2008; Pattberg 2005a; Schepers 2010). Schepers (2011) has examined the governance issues in the Equator Principles. One potential framework that has been used to examine such non-state (and hence non-democratic) regimes has been that of input and output legitimacy (Bäckstrand 2006, 2008; Scharpf 2001), where input legitimacy measures elements such as stakeholder representation and voice, and output legitimacy measures various elements of impact, including such items as monitoring. This is consistent with the work of Ostrom (1990) which examines non-state regulatory regimes from the aspects of input, stakeholder involvement, governance, and outcome measures. This chapter proposes an alternative framework for examining the quality of such non-state regulatory regimes. It evaluates such regimes on the basis of various measures that are included in the code itself weighed against cohesiveness among the members of the coalition governing the code.

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