The power of responsibility : integrative social contracts theory and the United Nations Global Compact

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Stellenbosch : Stellenbosch University
ENGLISH ABSTRACT: The purpose of this sequential mixed methods study is to examine the application of Integrative Social Contracts Theory (ISCT) to the principles of the United Nations (UN) Global Compact, with specific reference to the South African context. The main research question addressed in this study is as follows: • To what extent can ISCT support a more nuanced understanding of the UN Global Compact? In addition, the following secondary question is posed: • To what extent – with reference to ISCT – do South African corporations that are active participants in the UN Global Compact take local conditions into account when implementing and communicating on the 10 principles of the UN Global Compact? Based on the results of this examination, a conceptual framework is proposed that is aligned with both ISCT and the UN Global Compact requirements. The framework aims to assist corporations to improve the effectiveness of their corporate responsibility initiatives. The UN Global Compact is the world’s largest voluntary corporate responsibility initiative. In 2014 the initiative had over 8 000 business participants from more than 145 countries. Participants are required to support 10 universally accepted principles in the areas of human rights, labour, environment and anti-corruption. In order to provide specific examples, the study offers empirical research on South African corporations that are active members of the UN Global Compact. The study investigates how corporations take local conditions into account when implementing and communicating on the 10 principles of the UN Global Compact. Discussions about the UN Global Compact form part of a broader conversation about corporate responsibility and the moral purpose of business. There is a growing tendency to acknowledge that corporations have moral responsibilities and that their behaviour can be subjected to moral scrutiny. The purpose of business is articulated by the concept of corporate responsibility – which is the idea that the corporation bears a moral responsibility towards society as a whole. The corporation is expected to make a positive contribution to society, by extending its impact beyond its shareholders and the exclusive pursuit of short-term profit. Normative theory supports this view for which social contract theory and stakeholder theory are specifically helpful. ISCT suggests that there is a universally binding moral threshold (comprising universal principles or hypernorms) that would apply anywhere in the world and that forms the basis of a hypothetical macro contract for economic ethics. At the same time, context matters from a practical as well theoretical perspective when deciding between right and wrong. According to ISCT, corporations should have respect for local customs and conventions and can therefore negotiate micro contracts within moral free space as long as they do not transgress the universal moral threshold. Micro contracts are actual, non-hypothetical and often implicit agreements that exist within corporations, industries and national economic systems. Moral free space refers to the freedom of individuals, corporations and other social actors to form or join communities and to act jointly to establish moral rules applicable to the members of these communities. In this study it is argued that the 10 principles of the UN Global Compact can be regarded as substantive hypernorms, and that the principles, collectively, can be regarded as a hypothetical macro contract. Within the context of the UN Global Compact, three different kinds of micro contracts can be identified: the local network structure of the UN Global Compact, collective action initiatives, and individual company behaviour based on codes of conduct. However, empirical research indicates a limited focus on local conditions in many of these examples. The interpretation offered in this study gives the UN Global Compact a certain dynamic power which is not present if it is merely seen as a voluntary code that confirms a set of static principles. However, the existing guidance provided by the UN Global Compact does not embrace this interpretation and is also somewhat fragmented. Therefore, inspired by ISCT, a new conceptual framework is proposed, one which can be applied by all corporations, regardless of whether they are participants in the UN Global Compact or not. The proposed framework aims to assist corporations to conceptualise, develop and implement effective corporate responsibility programmes. It is underpinned by the need to have a thorough understanding of responsibility, with specific reference to the distinction between (but not separation of) the moral and business case. Such an understanding then enables the corporation to take responsibility, and informs a series of activities that relate to internal processes (governing responsibility, managing responsibility and reporting on responsibility) and respond to the external activities of regulating responsibility. The significance of the framework lies in a combination of scientific rigour and managerial relevance. It has a strong theoretical underpinning while also being readily accessible to practitioners. It is the practitioners who will make most of the decisions that will have an impact on human rights, labour issues, environmental performance and the fight against corruption.
Thesis (PhD)--Stellenbosch University, 2015.
Global Compact, Social responsibility of business, Business ethics, UCTD