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E Pluribus Unum? Legitimacy Issues and Multi-stakeholder Codes of Conduct

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Abstract

Regulatory schema has shifted from government to governance-based systems. One particular form that has emerged at the international level is the multi-stakeholder voluntary code of conduct (MSVC). We argue that such codes are not only simply mechanisms by which various stakeholders attempt to govern the action of the corporation but also systems by which each stakeholder attempts to gain or retain some legitimacy goal. Each stakeholder is motivated by strategic legitimacy goal to join the code, and once a member, is also required to assist in maintaining the institutional legitimacy of the code, resulting in “networked legitimacy.” We begin our analysis of these systems by first exploring the growth and structure of such MSVCs, and then building an analytical framework using strategic and institutional legitimacy as they apply to such MSVCs. We contribute to the codes of conduct literature by developing the construct of networked legitimacy from strategic and institutional legitimacy. We then apply our framework to the United Nations Global Compact, one of the predominant MSVCs today. In doing so, we: (1) demonstrate how different stakeholders are pursuing different types of legitimacy through their participation in the code, (2) examine the specific opportunities and risks in terms of what we have called “networked legitimacy” posed by the institutional design of actual MSVCs, and (3) create an argument for three pillars supporting the legitimacy of MSVCs.

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Notes

  1. Among the analytical categories available in the literature we have selected the three that are more aligned with our empirical work. However, there is no unanimous classification of the types of legitimacy. For example Suchman (1995) distinguishes among cognitive, pragmatic and moral legitimacy. Scott (1995, 2008) provides a framework that includes cognitive, regulative and normative legitimacy. Hunt and Aldrich (1998) outline three pillars of legitimacy: sociopolitical regulatory, sociopolitical normative, and cognitive.

  2. We recognize that we are omitting the cognitive dimension of Suchman’s (1995) tripartite division of legitimacy, but we believe that our use of Scott’s (2008) definition of regulatory legitimacy suffices for what would pertain to cognitive legitimacy in this instance.

  3. Ostrom (1990) asserts nine conditions for strong self-governing codes: clear boundaries and memberships, congruent rules, collective choice areas, monitoring, graduated sanctions, conflict-resolution mechanisms, recognized right to organize, and nested units. We agree that all these are important. However, we are specifying the case for international systems of multistakeholder self-governance. Hence, we believe the three important elements for our consideration to be dialogue (the result of memberships and collective choice areas, leading to the establishment of rules), learning (the continuous improvement of rules), and monitoring. The outcome of the MSVC is the governance system itself, which would then include issues of sanction and conflict resolution. We assert that governments, by their lack of action in international codes, have given over this space to MSVCs, thereby recognizing the right of MSVCs to organize, and allowing MSVCs to be nested in the network arrangement.

  4. For a full list of the ten principles and supporting documentation, visit the United Nations Global Compact website at http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html.

  5. A letter detailing the charges can be found at http://www.unglobalcompact.org/docs/news_events/9.1_news_archives/2009_01_12b/letter_from_CNPC_15Dec2008.pdf

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Authors and Affiliations

  1. Department of Institutional Analysis and Public Management, Bocconi University, Via Roentgen 1, 20136, Milan, Italy

    Valentina Mele

  2. Department of Management, Baruch College, City University of New York, One Bernard Baruch Way, Box B13-260, New York, NY, 10010, USA

    Donald H. Schepers

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Appendix 1

Appendix 1

List of interviewees:

  1. 1.

    Deputy Director of the United Nation Research Institute on Social Development (UNRISD). 12th March 2008.

  2. 2.

    Senior Researcher at SOMO. Responsible of the Global Compact Critics blog. 20th August 2010.

  3. 3.

    Head of Partnerships and responsible of the Local Networks at the UN Global Compact Office. 24th August 2010

  4. 4.

    Civil Society Coordinator at the UN Global Compact Office. 20th May 2008.

  5. 5.

    Director of the UN Global Compact. 24th August 2010.

  6. 6.

    Senior Researcher at SOMO, the Netherland-based NGO, coordinator of the OECD Watch. 6th October 2009.

  7. 7.

    Policy Advisor, International Trade Union Confederation (ITUC) a member organization of the UN Global Compact. 20th July 2009.

  8. 8.

    Coordinator Corporate Campaign Friend of the Earth International and Economic Justice. Friends of the Earth Europe. 6th October 2009.

  9. 9.

    Board President of the Bill of Rights Defense Committee and former Chairman of Amnesty International USA. 29th October 2009.

  10. 10.

    Former Director of FAO–Civil Society Relations. 10th December 2010.

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Mele, V., Schepers, D.H. E Pluribus Unum? Legitimacy Issues and Multi-stakeholder Codes of Conduct. J Bus Ethics 118, 561–576 (2013). https://doi.org/10.1007/s10551-012-1605-y

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  • DOI: https://doi.org/10.1007/s10551-012-1605-y

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