Corporate responsibility, governance and accountability: from self‐regulation to co‐regulation

Abstract

PurposeThe aim of this paper is to analyze the changing role of business in a globalized society, focusing on transnational corporations as private authorities which have gained power in global governance. The paper will aim to address the following issues: the development of CSR as a voluntary framework based on self‐regulation instruments through which corporations can manage their social and environmental impacts; corporations' exercise of power and authority in developing CSR standards globally through inter‐firm cooperation; and CSR as a mechanism to transform business culture through the development of co‐regulatory instruments between corporations and their stakeholders.Design/methodology/approachThis paper describes the emergence of corporate social responsibility (CSR) as a new governance framework, essentially created by the pressure of global civil society on corporations. The research focuses on the analysis of new forms of business political activities: self‐regulation and co‐regulation.FindingsThe findings describe how transnational corporations have become private authorities, competing or collaborating with global civil society or public authorities to develop a new framework of social and environmental regulations to manage their responsibilities and exercise their global power.Practical implicationsThis paper highlights the need for regulatory tools to transform global governance. CSR requires the development of public accountability mechanisms for private authorities, an issue that can be resolved by developing global governance networks between public and private actors.Originality/valueThis paper explains why CSR has taken shape through the creation of self‐regulation management standards and co‐regulating norms and instruments where transnational corporations are a major driving force.