Corporate Social Responsibility:

Chapter 4: Responsibilities to Stakeholders

Links to Further Reading

Donaldson, T., & Preston, L. E. 1995. The stakeholder theory of the corporation: concepts, evidence, and implications. Academy of Management Review, 20(1): 65-91.

http://www.jstor.org/stable/258887

This article takes stock of the main developments in stakeholder theory and disentangles the various aspects and levels of the approach. This paper is important because it makes clear that, as with much of the CSR debate, different people mean different things when they discuss stakeholder theory, and the authors help us to understand the various ways that the theory can be interpreted.

Jensen, M. C. 2010. Value Maximization, Stakeholder Theory, and the Corporate Objective Function. Journal of Applied Corporate Finance, 22(1): 32-42.

http://onlinelibrary.wiley.com/doi/10.1111/j.1745-6622.2010.00259.x/abstract

Harvard professor Michael Jensen is probably one of the most vocal and prominent critics of stakeholder theory. This paper neatly summarizes his main concerns, which zoom in on the problem that stakeholder theory forces managers to address the expectations of multiple constituencies. Unlike CSR critics discussed in chapter 2 Jensen’s critique is mostly fuelled by the pragmatic consideration that managers can only do their job efficiently and accountably if they are held to one specific and measurable goal.

Links to Practice

CWS 4.1: Visit the Companion Website for links to some corporate governance codes which have explicitly included responsibilities to stakeholders beyond shareholders.

Delta Electronics, believes that high quality corporate governance is the best way to ensure that the company always delivers excellent performance and provides an optimum balance for all stakeholder interests: http://www.delta.com.tw/csr/csr_governanceðics.asp
AEGON, a multinational life insurance, pensions and asset management company headquartered in the Netherlands, argues that a clear, efficient system of corporate governance is essential for companies to maintain the trust of both investors and other stakeholders: http://corporatereporting.aegon.com/2011/review/governance/corporate-governance

CWS 4.2: Visit the Companion Website for links to some companies which have explicitly included responsibilities to wider stakeholder groups in their CSR approach.

(VIDEO) Treasury Wine Estates, is a global wine company and this video follows the commitment of the company to its stakeholders throughout the supply chain: http://www.youtube.com/watch?v=BPeodjhshMA
NH Hoteles, is a Spanish-based hotel chain that has developed a 2011 – 2013 CSR ‘Master plan’ which includes a clear commitment to stakeholder dialogue: http://corporate.nh-hotels.com/en/corporate-responsibility-and-sustainability/csr-management
Kanebo cosmetics, is a Japanese producer of cosmetics and its approach to CSR involves two-way communication and building relationships of trust between the company and key stakeholders: http://www.kanebo.com/aboutus/socialresponsibility/approach.html