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Governance Strategy in Corporate Social Responsibility:

Relational Approach and European Governments

Laura Albareda, Josep M. Lozano and TamykoYsa

CSR PAPER 29.2007

DECEMBER 2007 CSRM – Corporate Social Responsibility and

Sustainable Management

Laura Albareda, Josep M. Lozano and Tamyko Ysa, Institute for Social Innovation

ESADE Business School (University Ramon Llull-URL)

The special issue on Corporate Social Responsibility Papers: The potential to contribute to the implementation and integration of EU strategies (CORE) collects a selection of papers presented at the Marie Curie Conference CORE organised by FEEM. The CORE conferences Series addresses the question of the goals achievement of the EU strategies. The main EU strategies (Lisbon, Sustainability, Integration) can be successful if their implementation involves adequately and effectively the business sector, non-profit partnerships and networks, local communities and civil society. In this setting CSR holds the potential to stimulate corporate contributions to the implementation and integration of the mentioned EU strategies and can be tested as a policy tool. This batch of papers has been presented at the second Core Conference: The potential of CSR to support the implementation of the EU Sustainability Strategy. CORE is financed by the European Commission, Sixth Framework Programme and it is co-ordinated by Fondazione Eni Enrico Mattei (FEEM). Further information is available at www.core-project.net Conferences: • The potential of CSR to support the implementation of the EU Lisbon Strategy

Milan, June 22-23, 2006 • The potential of CSR to support the implementation of the EU Sustainability Strategy

Milan, June 14-15 , 2007 • The potential of CSR to drive integration in an enlarged Europe

Nottingham, June19-20, 2008 • The potential of CSR to support the integration of core EU strategies

Darmstadt, 15-16, 2009 Partners of the CORE network: • Fondazione Eni Enrico Mattei, Milano, Italy • Oeko Institut, Freiburg , Berlin, Darmstadt, Germany • University of Nottingham, Nottingham, UK

Governance Strategy in Corporate Social Responsibility: Relational Approach and European Governments

Summary The paper starts a conversation in the literature about the challenge of interweaving corporate social responsibility (CSR) and governance, which helps explain the changing role of government in advanced democracies faced with wicked issues. In recent years, CSR has become a priority issue on government and international agency agendas. This empirical research report, provides explanatory keys on how governments, and more specifically the EU-15 countries, have designed and implemented their CSR policies and which type of interactions have developed with the different stakeholders. We analyse and map how, under the umbrella term of governance, the stakeholders in CSR public policy interrelate. A four ideal typology is built up, concerning the roles played by public and private actors, legal frameworks, incentives, governance structures and the ways all of these evolve. The findings can help establish a starting point for dialogue – which involves the business community, universities, government agencies and consumer groups – about their future development in decision making on these policies. CSR governments’ strategy may be of various kinds: The kind of CSR policy employed affects how the relationship between public and private actors is managed. Those who set policies, whether for public or private institutions, may find some important lessons in these relational approaches. Keywords: Corporate Social Responsibility, Governance, Public policies, Public-Private Partnership, Welfare state JEL classification: M14

Address for correspondence: Laura Albareda Institute for Social Innovation ESADE Business School (University Ramon Llull-URL) Barcelona, Spain E-mail: laura.albareda@esade.edu

3

GOVERNANCE STRATEGY IN CORPORATE SOCIAL RESPONSIBILITY: THE ROLE OF GOVERNMENTS IN EUROPE

THE “SO WHAT” OF THE ANALYSIS OF GOVERNMENT ACTIVITIES IN CSR

The purpose of this paper1 is to analyze differences in the approaches

adopted by European government policies in the light of their ideals and four

different models of government action are put forward. Our proposal’s

theoretical coherence stems from the fact that CSR is not a new and isolated

item for inclusion on the political agenda. On the contrary, it forms part of the

current debate on the role of companies in society, clearly shaping the current

challenges to the welfare state and its governance, and the socio-economic

development of each country. This initial hypothesis has been given a relational

reading, which emphasizes the strategy of dialogue and collaboration between

company, government and the organs of civil society.

Today, CSR is already present on the political agendas. Governments

have become CSR enablers or drivers. Supporting business efforts, in the mid-

late 1990s, some pioneer governments, such as those in Denmark, the UK and

Australia, began to promote CSR through their policies and programmes. At the

beginning of this century, those initiatives merged with actions developed by

different international organizations, like the UN Global Compact or the

European Commission, which began to promote and to endorse CSR,

recognizing public policies as a key driver to encourage a greater sense of

CSR.

An important social challenge facing all these governments is to provide

a response to the new role of companies in economic development, with the

social and environmental problems this entails. Furthermore, the European

Commission expects the national CSR policies to tie in with both community

policies and international codes and standards. Many European governments

have started to develop and design actions and policies based on and around

CSR. In general, they have preferred not to introduce compulsory CSR policies

as such. Instead, they have chosen to work towards the furthering and

facilitating of CSR, developing common standards and information practices on

4

the subject, together with spaces for dialogue and partnership. The role of

governments and public administrations in this process is both fundamental and

irreplaceable. As Aaronson and Reeves (2002b) recalled, these policies can

contribute to greater clarity and awareness when examining the large number of

voluntary approaches taken by the corporate sector over recent years.

The concept of CSR is linked to problems raised by economic

globalization and its affect on challenges, the so-called wicked issues, including:

crisis and change in the welfare state (Midttun, 2004); new forms of governance

(Moon, 2002, 2004); society, corporate and government relationships (Gribben

et al., 2001); and, new corporate imperatives and new social demands (Zadek,

2001b). This approach postulates that the social governance of our

interdependent world requires a series of developments. It requires a new vision

of how companies contribute to society, a new relationship between political

and corporate actors, and the ability to reach a shared diagnosis and

perspective on the main challenges to our companies, which will enable us to

contextualize that vision and that relationship.

As Rome has pointed out (2005), every country's approach to CSR

encapsulates a series of different elements: political and institutional structure;

political style and processes; social structure; emphasis on a voluntary

approach or acceptance of state guidelines and control; local and national views

of the role of companies; the role and posture of NGOs and civil associations in

society; the kind of educational system and the values it transmits; what is

expected of their leaders; and historical traditions. All this means that

companies and countries must be increasingly aware of the need to formulate

their own approach to CSR. CSR does not now simply affect relationships

between company and society. It has become a way of rethinking the role of

companies in society, which takes governance and sustainability as its core

values.

To represent the thinking on what governments can do to drive CSR as a

dilemma about the pros and cons of legislation is to take an essentially

impoverished and sterile line. Legislation is only one element out of many, and

in a large number of cases not even the most useful or important. What is

required is an overall political framework. We should be asking what needs to

5

be done to promote and encourage increasingly responsible and sustainable

companies and organizations. Does a discourse on CSR based on political

institutions make sense? It does. Particularly if we take as reference for any

discussion the two key words appearing in the subtitles of the European

Commission documents: promotion (from the perspective of political

institutions), and contribution (by the corporate sector). This directly links a

commitment to CSR with a commitment to corporate excellence, quality,

continuous improvement, innovation, differentiation, competitiveness and

internationalization. This is something neither companies nor governments can

achieve on their own. On the contrary, success will only come from a growing

capacity to bring their individual institutional expertise to bear in a joint approach

to the development of CSR.

The governance of our complex societies will be impossible if we cannot

turn the sense of responsibility of their many stakeholders into a sense of co-

responsibility. This is where the recognition of the political dimension of CSR

development comes in. Because the issue of CSR and the role of the company

in society do not require companies to stop being companies, or to take on

functions to which they are not suited (or for which they have no legal remit). It

simply asks them to be fully and wholly companies, but twenty-first century

companies. Indeed, as Frederick indicates (2006: 121) “corporations are being

offered an opportunity to match their own operation to these public

expectations. The best ones will do so. The others may wish they had if, in

failing to heed the normative messages, they encounter rising hostility and

increased governmental intervention in their affairs. For public policy makers,

these agreements betoken a growing consensus among the world’s peoples

over what is thought to be morally desirable action by governments”.

In relational approaches, the development of cross-sector proposals

(dialogues, partnerships and networks) is one of the objectives of CSR’s role of

promoting government. From here on, the paper is structured as follows. First,

we present the development of the literature review of the roles played by

governments in promoting CSR. Secondly, we introduce the methodology

developed to build an analytical framework based on governance theories.

6

Thirdly, we describe the four government CSR approach models based on the

behaviour of EU-15 countries.

THE ROLE OF GOVERNMENTS IN STIMULATING CORPORATE RESPONSIBILITY

The first documents to introduce the debate on governments’ CSR role

date from the last few decades of the 20th century. Most of these texts put

forward the need for governments to actively promote CSR as a response to the

social and environmental problems caused by corporate action within a

globalized economic context. Another aspect considered in the understanding

of CSR public polices was the soft policy approach introduced by Joseph

(2003). Most CSR policies do not affect regulations but constitute an approach

to “law politics” in which the role of government is viewed as collaborative and

facilitating through the use of soft tools and means –always in collaboration with

the private sector.

Relevant documents that incorporate governments’ vision, with particular

emphasis being placed on Europe, include the official documents on CSR

published by the European Commission: the Green Paper “Promoting a

European Framework for Corporate Social Responsibility” (European

Commission, 2001) and “Communication: Corporate Social Responsibility: A

Business contribution to sustainable development” (European Commission,

2002). Combined, these two documents provide the keys to understanding a

global perspective on the role of public authorities in CSR development, as well

as an insight into the public initiatives governments can undertake. The

European Commission holds that the action of European governments should

be: (i) to improve CSR knowledge; (ii) to facilitate the exchange of experiences

and good practices, increasing knowledge about the impact of CSR on business

and society; (iii) to develop CSR experience and good practice exchanges

among businesses and societies; (iv) to develop CSR management skills; (v) to

foster CSR among SMEs; (vi) to promote convergence and transparency in

CSR practices and tools; (vii) to launch multi-stakeholder CSR forums, and (viii)

to integrate CSR in public policies (European Commission, 2002).

7

Apart from these Commission documents, other key materials included

the responses submitted by European governments to the public debate arising

from the Green Paper in 2001. These showed how each government viewed

CSR in relation to other stakeholders and laid out their programmes for action.

An initial compilation on the practices carried out by governments can be found

in a conference document that the Italian government prepared indicating how

European governments described their public action on CSR (European

Conference on Corporate Social Responsibility. The role of Public Policies in

promoting CSR, Venice, 14th November 2003).

Pioneering research on the analysis of the roles adopted by

governments in CSR promotion includes the World Bank’s report on “Public

Sector Roles in Strengthening Corporate Social Responsibility: A Baseline

Study” (Fox et al, 2002), which puts forward four public sector roles:

mandating, facilitating, partnering and endorsing (view table ”Public sector

roles”). Furthermore, it constructs and develops a significant matrix of possible

activities for the public sector to play in each role, depending on the aspect of

CSR being dealt with.

Amongst research based on geographical comparative analysis of

government behaviours in European and North American administrations, the

work of Aaronson and Reeves (2002a and 2002b) and the comparative report

Government and Corporate Social Responsibility (CBSR, 2001) shed some light

on the relevance of cultural differences and elements in the development of

national CSR models. Aaronson and Reeves (2002a) analyze the differences

between Europe’s acceptance of the role of government in promoting CSR and

the less accepting US attitude in this regard. One of the key points in European

governments is how well they cooperate with the business sector. Conversely,

American companies display a poor level of acceptance of CSR in public

policies. They argue that the difference resides in their respective business

cultures.

Along these lines, Moon (2004) analyzes the CSR policy adopted by the

British government when he suggests that it assumed CSR policies in response

to a crisis in social governance and legitimacy affecting the country. Midttun

(2004) views the development of CSR within the context of changes in the

8

welfare state, based on a comparative analysis of three models. Gribben et al.

(2001) presents the role of governments in the creation of new models of social

partnership to resolve social problems, coordinating with companies, social

organizations and local governments. Guarini & Nidasio (2003) also analyze the

role of CSR in public-private partnerships as models of governance. Bendell &

Kearins (2004) refer to the political dimension of CSR and its application to

company administration and management to meet the demands of society.

Lepoutre et al. (2004) also present a review of the roles of governments

in the CSR debate. Their analysis reviews the strategic roles to be played by

governments managing institutional uncertainty (activate, orchestrate and

modulate) and present common tools for public action managing strategic

uncertainty (public information campaigns, organizational reporting, labelling,

contracts, agreements and incentives). And Nidasio (2004) focuses on

comparing the framework models for reporting developed by four European

governments: Italy, Belgium, the Netherlands and France. Today, theories on

CSR frequently include a global overview of its contribution to governance.

THE CONSTRUCTION OF AN ANALYSIS MODEL. A BOTTOM-UP APPROACH: FROM PROGRAMMES TO POLICIES.

This paper departs from the assumption that planning and implementing

public policies on CSR now goes beyond the traditional relationship of

government action (public administrations) with the private sector (companies).

It includes all the social actors: public sector, private sector, society, and most

importantly the intersections between these, in relational collaboratives. For a

broader and less dualist view on the issue, we worked from a relational model

proposed by Mendoza (1991, 1996). Mendoza’s analytical model focuses

particularly on the interrelation, collaboration and partnership between the

different actors: companies, governments and society.

This means that CR public policies cannot simply be analyzed in the light of

relationships between governments and business sectors. Added value lies in

exploring the intersections between public and private sectors (including for-

profit and non-profit sectors) and in broadening the areas surrounding the

boundaries between these three sectors. This triangulation approach is adopted

9

in the research framework for analyzing CR public policies and allows us to

gain a complete vision of possible models and impacts. The relational focus is

thus applied to public policies, classifying administration policies, programmes

and actions by means of the following scheme2 (see figure: “Relational model

for CR public policy analysis”):

Insert figure 1

Administration-administration

In this classification, we have included public administrations, including the

Commission, that integrate CR principles into their own management systems

and their relationships with stakeholders. Especially noteworthy is the public

policy adopted by the administration as regards its own CR: the idea of

generating leadership through internal CR policies. This could involve engaging

socially responsible companies for good and service supply, adopting internal

CR policies (gender equality and no discrimination) or environmental policies,

as well as applying CR in foreign and trading policies as well as in development

co-operation.

Administration-company

Governments (or their respective agencies) can adopt different policies that

have a direct or indirect influence on company activity and development. These

include labour and social policies, company and economic policies, fiscal and

funding policies, educational and training policies, as well as policies relating to

agriculture, fishing and rural development. We would like to highlight the

following CR public policies adopted by the administration: the promotion of

consistence and transparency in CR practices and instruments adopted by

companies (management norms, codes of conduct, accountability, audits,

reports, fair trade labels, social labels, socially responsible investments, etc.), in

10

addition to fostering CR experience and best practice exchanges among

companies.

Administration-society

Under this heading, we include governmental activities aimed at society and

favouring CR, such as carrying out campaigns and actions that reveal CR’s

positive impact on society, supporting civil society’s initiatives intended to

promote CR, informing and educating social actors about CR, and establishing

programmes to interrelate stakeholders.

Administration-company and society or relational CR

This is the most innovative action framework the CR field as well as the least

studied one. It features the public policies or programmes that involve working

in cross-sector partnerships to promote or develop CR, the creation of forums

and areas for CR experience and best practice exchanges, the establishment of

independent institutions for analysing, developing and applying CR, and the

promotion of consistence and transparency in CR practices and instruments.

Three different levels of government action on CSR were analysed, with each

level incorporating the earlier one. The initial analysis dealt with the issues and

instruments used by governments in their initiatives for promoting CSR. This

involved researching each country and building a database on the issues,

policies and instruments applied by governments in promoting CSR. The

second level consisted of looking at stakeholders and contexts. This

perspective considered the relationships between the actors involved, and any

interrelationships and co-responsibilities created. It required a study of the

environment, cultural context and socioeconomic tradition of the country in

which the government framework for CSR had evolved. Thirdly, for a more

systematic and dynamic analysis, the research also covered strategic and

relational aspects, the models for the conception and development of the CSR

discourse and the design of public policies. By combining these data, the

following comprehensive map was created (see figure: “Implemented public

policies, programmes and actions promoting CSR”) about the actions that UE-

11

15 governments are implementing in their CSR promotion policies.

Undoubtedly, these policies, programmes and projects are going to become

increasingly sophisticated as the different actors mature and assess their

projects

Insert figure 2

.The application of the relational model to public policies on CSR gave an

overview of government action, taking into account both actors involved and

their contexts: profiles and models for action adopted by the governments;

public programmes and policies; discourses compiled by governments on the

CSR concept, including the dissemination, means and organizations used; and

the incorporation of CSR into the organizational structure. How CSR policy was

assimilated into government structures and public policies was analyzed

examining the following elements in the construction of CSR strategies and their

implementation:

National public policy on CSR: vision, mission and objectives; how the policy

is named within the country, the origin of the political discourse, the

chronological evolution of the policy-making, the localization of the

discourse and the policy.

Government departments assuming liabilities on CSR policies.

Institutional and relational support from existing international agreements on

CSR: Conventions of the ILO, OECD guidelines for multinational

companies, United Nations Global Compact, participation in

international bodies on CSR issues.

Regulation in its diverse forms. Positioning in the relationship between

voluntary action and legislation.

12

Organizational structure for CSR policies: centralized/decentralized,

transversal/sectoral, multi-stakeholder. Creation of new entities.

And finally: significant actors in the process, turning points and objectives,

environment (socioeconomic, political and cultural context,

administrative tradition).

CORPORATE SOCIAL RESPONSIBILITY KEY VARIABLES IN A RELATIONAL APPROACH Based on the revision of CSR, political science and public management

literature, and a previous initial analysis of three countries, the following key

variables were selected, which explain the actions of governments that allow to

draw a comparison between the different countries.

In the first block – CSR in Government – ten variables were analyzed (for

each of the variables several examples are highlighted of the programmes and

policies included. However, this is only a sample and not an exhaustive list):

1. Leadership by example: with the presence of the administration in an area

traditionally considered the monopoly of business, the referent of the

example is key. It is included in these variables: action plan for government

offices; work-life balance policies/equal opportunities/ethical investment/anti-

fraud and corruption policies; and accreditation for good employer practices.

2. Creation of internal departments. The public administration sometimes

conveys the relevance and hierarchy of its policies through the constitution

of structures. Other examples considered include: the creation of knowledge

centres; the creation of monitoring organizations and control systems.

3. Coordinating government bodies. With the creation of departments when

dealing with these wicked issues this is not sufficient. In order to achieve the

maximum number of possible outcomes, a cross-cutting collaboration

between the different departments is necessary. This includes: a CSR

minister responsible for coordinating activities; cross-government CSR

programmes; and CSR feasibility studies for new legislation.

4. Capacity building. The integration of new policies requires the generation of

knowledge, as well as training to match the profile of public workers to the

new requirements. In this variable, are included actions such as: the funding

13

for research and innovation programmes; financial assistance for

companies implementing CSR programmes; the publication of guidelines

and good practice documents.

5. Public expenditure. Policies cannot be sustainable without the specific

allocation of resources or them being linking to hot issues in policies. Thus, it

is necessary to analyze whether the following are applied: social and

environmental criteria in supplier policies; ethical purchasing and

outsourcing; CSR policies for public contracts.

6. Public campaigns. Linked to the generation of knowledge and training is the

diffusion of this information: the promotion of the positive impact of CSR on

business and society; public opinion polls; CSR awards, communication

campaigns and media influence are also analyzed.

Within this section international issues are of particular importance, due to the

influence they can have on accelerating national internal processes. Thus, three

variables analyzed are connected with this:

7. International events. Is the government carrying out activities in which to

share good practices, which also facilitate benchmarking? The following

events are included here: organization of international conferences on CSR;

European Commission events; or European conferences on CSR.

8. Transferring international debate to local contexts. Regionalization

processes and local autonomy make it necessary for national governments

to attain sufficient multilevel management if they want to make an impact.

The following are analyzed here: agreements between national and local

government; seminars on geographic or thematic areas; and the

consideration of regional and local policies.

9. International instruments and agreements. We consider this to be a key

variable because it measures the transposition in accordance with

international regulations, that governments are introducing. This includes:

the promotion of global regulatory frameworks; the development of

international certification systems; the creation of evaluation and certification

bodies.

14

10. Foreign trade policy and international development. The greatest amount

of maturity in public CSR policies is the power to agree with the companies

that are going to develop behaviour similar to that carried out in their own

country in third-party countries. This includes: CSR integrated into foreign

affairs policies for international markets and international development; the

promotion of good CSR practice in overseas operations (human rights,

labour standards, anti-corruption, environment etc); CSR linked to foreign

investment policy and international relations.

To this end, the profiles and action models adopted by European

governments were analyzed3; public actions identified and the speeches made

by government officials on CSR examined by (a) studying how they were

broadcast as well as measures and organizations used, and (b) analyzing how

CSR had been introduced to governmental structure.

This information was grouped by country and incorporated in specific

reports made by each country analyzed4. In order to have a comparative

analysis of public policies and the corresponding programmes for the

development of CSR we match the available information on the profile of each

country with the relational model applied to public policies on CSR. From this

perspective, the thematic and instrumental approaches are fully integrated in a

strategic-relational approach. We then asked ourselves whether any of these

elements define models for action.

And we defend an affirmative answer to this question. Thanks to the

literature review and field work, we have been able to cluster the characteristics

of the different countries’ variables into clusters, using the criteria mentioned

above: government CSR public policy (vision, objectives, strategies and

priorities), internal government CSR structure (position of political figure,

organizational structure, centralized or decentralized), CSR responsibilities at

different levels of government (cross-cutting policies, regional/decentralized

government, local government), the scope of CSR policy (domestic versus

international), and the role of other organizations, and finally the context of the

environment (socioeconomic, political tradition). This clustering led to the

following results.

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EUROPEAN MODELS OF PUBLIC POLICY GOVERNANCE FOSTERING CSR

Applying this relational and strategic approach, the analysis concludes

with the identification among the EU-15 countries of four models for government

action in the development of public policies promoting CSR. As a result, a

denomination is suggested that offers a key for interpreting each model,

indicating its dominant, but not exclusive, perspective.

Insert table 1

• The partnership model, applied by countries in Northern Europe in their

approach to public policies on CSR. Denmark, Finland, the Netherlands

and Sweden. In these countries, with their strong welfare state tradition,

governments have shifted from acting as a strong welfare state, taking

responsibility for social issues, to a facilitative role, sharing the increasing

costs of addressing social issues with private and public partners.

Countries whose tradition historically favours social negotiation, where

relationships between government and companies is positive, based on

aspects of cooperation. Public policies on CSR are considered to fall

within the area of social and employment issues. Local governments are

heavily involved in channelling the formation of partnerships that

encourage the concept of social co-responsibility between

administrations, companies and social organizations. As Kjaer (2003)

has already suggested for partnership models, on CSR issues we feel

that the Netherlands is closer to the Nordic than the continental model.

• The business in the community, applied to the Anglo-Saxon countries

and their way of applying public policies on CSR. The United Kingdom

and Ireland. These two countries base their policies on a consolidated

and well-organized private sector and civil society. Their government

action is therefore conceived as facilitating or mediating, a more liberal

16

and less normative view of the role of the state. Government actions

on CSR are focussed on supporting the private sector and facilitating

economic and sustainable development and economic regeneration in

support of the private sector. Soft Invervention policies to encourage

companies involvement in governance challenges is one of the main

focus of CSR public policies. These countries pursue the solution of

social problems like unemployment and social exclusion through CSR

policies where companies are involved. This is the result of a crisis in

governance, where governments attempt to promote spaces for

corporate action. Centralized policies linked to local authorities.

Government has based its application of CSR on soft law.

• The Sustainability and citizenship model. applied by continental

countries as Germany, Austria, Belgium and Luxembourg. A very special

social context, combining economic crisis with the political challenge of

reform of the welfare state. Although initially placing greater emphasis on

sustainability. it seems as an updated version the the existing social

agreement and government focuses CSR on the sutaianble Develpment

Strategies. CSR as a concept is not in itself a main axis, but is

incorporated into the national strategy for Sustainable Development that

includes. France is the European country with the most regulatory

approach to CSR. The French political tradition is more closely linked to

the value of standardization and legislation, thus differentiating it from the

preceding model. CSR. This is a very centralized model.

• The agora model. Applied to Mediterranean countries as Italy, Spain,

Portugal and Greece. Countries who addressed to CSR after the

European Commision initative in 2001.. While some of their governments

are already applying CSR initiatives, many are still only at the discussion

stage with the concept and its possible application in public policies. In

these countries, governmental action has been supported by the drafting

of reports and studies on CSR, analysing the development of CSR in

more proactive European governments and the CSR public policies

17

undertaken. These elements of public dialogue provide consensus on

whether or not governmental action has been defined or made specific

through tangible political initiatives, especially in Spain, Greece and

Portugal. In these countries, it seems that the governments adopt a

positive attitude towards CSR.

•

INTERWEAVING CSR POLICIES AND WELFARE STATE REGIMES

Despite inherent limitations in classification attempts, as our comparative

research proceeded, we began to detect some links between individual

country’s policies fostering CR and their welfare state regimes (Esping-

Andersen, 1999, 2000; Heclo 1981). Esping-Andersen’s welfare regime

classification distinguishes three types of welfare regimes: liberal, social

democratic and continental regimes. The difficulties in fitting the Mediterranean

countries into this initial triad led him to add a fourth type, the Mediterranean

welfare regime, characterised by its delayed development and family’s

significant role in welfare provision.

The liberal welfare regime is found in Anglo-Saxon countries. It is based on the

liberal tradition of minimising the role of the state, individualising risks and

encouraging commercial solutions for welfare provision. Social policies are

marginal, in line with a narrow definition of social risks to be dealt with by public

action. Within the European Union, this type of welfare regime is found in the

U.K. and Ireland.

The social democratic welfare regime is virtually synonymous with the Nordic

countries (Denmark, Sweden, Finland). Its key differentiating factors include the

universal nature of welfare benefits, global risk coverage, generous subsidy

levels, egalitarian orientation between generations and sexes, and residual

private welfare services. The Nordic countries have undoubtedly pushed the

limits of universalism farther than any other country. Furthermore, rights are

18

linked to individuals and based on citizenship -while British and Dutch

pensions (1998) are based on contributions made.

The conservative welfare regime -that of continental Europe- is characterised by

a mix of different social benefits linked to social status and the role of families.

Throughout most of continental Europe, liberalism has a genuinely marginal

role, and, until after the Second World War, socialism was typically excluded.

Earlier social policies looked to monarchic statism, traditional corporatism and

Catholic social doctrine for inspiration. Emphasis on compulsory social security

complemented by ad-hoc and effectively residual pension plans for social strata

lacking employment relationships renders private market welfare provision

marginal. Another important feature of conservatism is its reliance on the family.

It combines social protection, skewed in favour of male family heads, with the

caregiver role allotted to the family –ultimately responsible for the welfare of its

members (the principle of subsidiarity). Typical examples of this regime include

countries like Austria, Belgium, France, Germany, the Netherlands and

Luxembourg.

Finally, we can define the Mediterranean welfare regime as an offshoot of the

conservative regime, with a more pronounced reliance on the family. Public

structures for welfare providers are, therefore, thinner on the ground and

welfare production is overwhelmingly family-based, relying particularly on

women, who shoulder most of the work of caring for the entire family. Though to

very different degrees, Spain, Italy, Greece and Portugal share this regime, in

which informal solidarity networks make up for the system’s deficits.

GOVERNANCE AND CORPORATE SOCIAL RESPONSIBILITY: KEY ELEMENTS

Four key ideas arise from our research.

Firstly, that the voluntary-compulsory dichotomy as a tool to analyze the role of

governments on CSR is too restrictive. Extending our framework for analysis to

19

a relational format opens out a wide range of possibilities and opportunities

for governments and public administrations to influence, intervene, enable,

steer and promote a sounder implantation of CSR within the culture of their

organizations (whether public, private or non-profit). By analysing the spaces

where these three sectors interrelate, and the spaces where synergy or

extension of their boundaries can occur, we can create knowledge that may

help administrations to make better decisions.

Secondly, the deregulation of public services, the increasing power of

companies over governments, the welfare state crisis, drive for national

competitiveness and sustainable development policy are some of the key

drivers for governments to promote CSR. A measure of the levels of economic

growth, unemployment, inequality in income distribution, population ageing,

competitiveness/innovation and ecological impact are ways of identifying the

political challenges that governments may attempt to address through CSR

policy.

Third, we have seen how each country reconstructs its public policies on CSR

from its own social, cultural and political traditions. The almost total concurrence

of European welfare regimes and the developing CSR policies of the EU-15 is

no coincidence. In some countries, CSR has been used as a lever or even an

excuse to strengthen relationships with other sectors. In others, to reinforce the

figure of the state and its regulatory auctoritas. But overall, it reflects the effect

on public policy of the challenges currently being faced by these countries,

which depend on the pre-existing deficits and limits of each welfare state.

Fourth, Governments need to manage a complex set of relationships between

sectors. An understanding of the increasingly interdependent political,

regulatory and commercial exchanges between sectors, and the perceptions

and challenges from different stakeholders are important considerations for

developing CSR policy. This led the government to be broker between sectors.

It is generally accepted that government should assume the role of mediator,

20

creating a common framework across sectors to promote CR, encouraging

and leading multi-stakeholder dialogue.

A challenge for future research is the work still to be done on models for the

action and behaviours of CSR public policies on multi-level governance, and

relationships between local, regional, national, European ang global levels.

21

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24

FIGURES AND TABLES Figure 1. Relational model for CR public policy analysis

1. CSR in governments

2. CSR in government-business relationships

3. CSR in government-society relationships

4. Relational CSR

.

12 3

4

Businesses Civil Society

Governments

25

Figure 2. Implemented public policies, programmes and actions promoting CSR

P ublic po licies

•Leaders h ip by exa m ple (inte rna l C S R po lic ies)•Link ing public spe nding to soc ia lly responsib le com panies•Partic ipa t io n in in te rna tio na l events•T rans fe r of inte rna tio na l deba te on C S R to the nat io na l and loca l conte xt•Foste ring in te rna tio na l ins t ru me nts and agree me nts•E xterna l po licy , t rade and deve lop me n t coopera tio n pol icy•D evelop me nt of technica l k no w ho w for imple me nting C S R in com panies•C oord ina t io n of C S R polic ies in ad m inis t ra tio ns•Public ca mpaigns•C rea tio n o f inte rna l departme nts

•W ork in inte rsec toria lpartners hip•Fac ilita t ing•Pro m otio n o f soc ia lly responsib le inves tme nt•C oord ina t io n of ac tio ns be twee n c iv il soc ie ty a nd the bus iness sec tor•Pro m otio n o f respo nsib le consu m ptio n•Pro m otio n o f the in te res ts o f a ll s takeho lde rs (p roducers , emp loyees , consu me rs , inves tors )• In form a nd educa te a ll soc ia l ac tors•E ncoura ge me n t, c rea tio n and superv is io n o f mec ha nis ms fo r eva lua tio n and accou ntab il ity•E ncoura ge me n t o f exc ha nge of experie nces and go od p rac tices•Pro m otio n o f converge nce and tra nspare ncy in C S R prac tices and ins tru me n ts

Ad m in istrations C omp an y S ociety R elational

P ublic administrations and C S R

E mp loy me nt and soc ia l issues po licy• Enviro nm e nta l po l icy

•T ax and fu nding po l ic ies Educa tio n a nd tra in ing pol ic ies

Ru ra l bus iness policyA gricu ltu re , fis her ies and ru ra l deve lop m e nt pol ic ies

C onsu me r defe nce policy

•Le gis la tio n (co m pulsory )•Re gu la t io n (by res tr ic tio n )•D irec tives and guide lines (so ft la w)•F isca l and fu nd ing fra me w ork•T o prom ote converge nce andtra nsparency in C S R ins tru me ntsand prac tices•T o ca ta lyse and fac ilita te volu n ta ryC S R initia tives , e xcha nge o fexperie nces and goo d prac tices•Pro m otio n o f C S R in co mpa nies : make k no w n pos i tive impac t•T o export C S R in co m pa ny a ttitudesin te rna tio na lly•Po lic ies of a tte ntio n to needs andcharac te ris t ics o f SM Es in C S R•T o fos te r compa ny re la tio ns hips wi th the marke t and s takeho lders(impac t o n cus to mers , supp lie rs ,emp loyees , cap ita l p roviders )•T o fos te r soc ia l ac tion by the compa ny•T o draw up bus iness res truc tu ringpolic ies

•Re gu la t io n (by res tr ic tio n)•D irec tives and guide lines (soft la w)•T o d is semina te the pos itive impactof C S R in soc ie ty•T o support C S R p ro mo tio n in itia tives of c iv il soc ie ty•T o info rm a nd educa te a ll soc ia l ac tors about C S R•T o prom ote and fac il ita te Respo ns ib leC onsu m ptio n•T o prom ote and fac il ita te Soc ia llyRespo ns ib le Inves tme n t•T o prom ote and fac il ita te the particu la r inte res ts o f a ll s takeho lders in C S R te rms

26

Table1. Models of government action in the development of CSR-endorsing public policies in EU-15 counties

Model Characteristics Countries

Partnership Partnership as strategy shared

between sectors for meeting

socio-employment challenges.

Denmark, Finland,

the Netherlands,

Sweden.

Business in the

community

Soft intervention policies to

encourage company involvement

in governance challenges

affecting the community

(entrepreneurship and voluntary

service).

Ireland, the United

Kingdom.

Sustainability and

citizenship

Updated version of the existing

social agreement and emphasis

on a strategy of sustainable

development.

Regulatory.

Germany, Austria,

Belgium,

Luxembourg.

France.

Agora Creation of discussion groups for

the different social actors to

achieve public consensus on

CSR.

Italy, Spain, Greece,

Portugal

27

1 This research was made possible thanks to the support of the Ministry of Economy and Finance of the

Regional Government of Catalonia. 2 Given the definition of the study object, focused on governments, the actions between the private, for-

profit and non-profit sectors do not form part of this analytical framework. 3 Sources of information on government actions are based on the reports and discourses offered by the

governments themselves. 4 For further information on the results for each country please see: Lozano, Albareda, Ysa, Roscher,

Marcuccio (2005) Los gobiernos y la responsabilidad social de las empresas. Políticas públicas más

allás de la regulación y la voluntariedad. Barcelona: Granica.