There is, broadly speaking, an international consensus that the voluntary approach to corporate social responsibility is the best way forward. But for how much longer? In recent weeks pressure groups have challenged three key planks in the international framework of voluntary initiatives to promote responsible corporate behaviour.
The fragile consensus to eschew further regulation reached in the European Union’s multi-stakeholder forum has been rudely shattered by non-governmental organizations insisting that, in their view, this is out of the question (see page five). That creates a ticklish problem for the European Commission, which has promised to publish a second white paper this year, outlining a policy that was to have been informed by the forum’s deliberations. Do not expect this document to appear on schedule.
Then there is the Global Compact. Its officials have always been extremely sensitive to any suggestion that signatories should in any way be called to account for failing to match up to the ten principles it enshrines, but disillusionment in some quarters has now reached such a pitch that influential groups in civil society think it should be scrapped (see page eight).
Finally, there are the Organization for Economic Co-operation and Development guidelines for multinational enterprises. The process for handling complaints brought against companies barely matches up to the principles of visibility, accessibility, accountability and transparency that the OECD says should inform the process, at least in the UK. And the UK by no means has the worst record in this regard (see page nine).
The Compact and the EU multistakeholder forum can at least claim teething problems – both are in their infancy. The OECD guidelines, which have been around since the 1970s and undergone revisions, cannot.
NGOs like to whinge. But consultants are now voicing similar concerns and, crucially, so are some companies. It is frustrating to join an exclusive club only to discover that membership is in fact open to anyone who can sign their name, and that there is no mechanism for expelling those who break club rules. This seems to be the case with the Global Compact.
The danger is that frustration will turn to disillusionment. To avoid this happening, there is an urgent need for more effective, and more transparent, mechanisms to police voluntary initiatives. To those who say that this goes against the spirit of voluntarism, the best response is that it is preferable to regulation. The paradox of the voluntary approach is that it cannot be said to have failed until it can be shown to be working.