Edited by Stephen Tully
Chapter 13: In the Dark All Cats are Grey: Corporate Responsibility and Legal Responsibility
John Sabapathy Introduction In many ways the recent rise of corporate responsibility is in tension with the driving impulse behind the legal structure of public limited companies (plcs). If such companies have a genetic (legal) code, it is not to maximise shareholder returns, contrary to popular ‘anti-globalisation’ convention. More accurately, limited liability companies have evolved from the days of the East India Company as ways of doing precisely that – limiting the risk that owners took on when investing in the company (Micklethwait and Wooldridge, 2003; Bakan, 2004; Robins, forthcoming 2006). But irrespective of the explicit interest of the law in framing corporate responsibility, the two are always and necessarily intertwined, even if the law only provides the frame within which corporate responsibility happens. The ambiguity of the relationship is in part precisely related to the massive recent rise in voluntary activity that has sought to achieve civil rather than legal regulation. The phenomenon has been variously labelled as ‘corporate responsibility’, ‘corporate accountability’, ‘corporate social responsibility’ (CSR), ‘corporate citizenship’ or ‘corporate sustainability’. This proliferation in jargon can be happily distilled to a core issue: companies’ consideration and integration of social, economic and environmental impacts into their strategising, processes products and services. It is this that ‘corporate responsibility’ denotes in this chapter. Today thousands of non-financial reports are produced annually (see www.globalreporting.org) addressing companies’ legal compliance with health, safety and environmental regulations as well as other issues that drive economists such as Martin Wolf to despair (Wolf, 2002). This chapter provides an...
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