Corporate responsibility, strategic management and the stakeholder view of the firm

Citation

(2007), "Corporate responsibility, strategic management and the stakeholder view of the firm", Corporate Governance, Vol. 7 No. 4. https://doi.org/10.1108/cg.2007.26807daa.001

Corporate responsibility, strategic management and the stakeholder view of the firm

A special issue of Corporate Governance: The International Journal of Business in Society, produced by the European Academy of Business in Society (EABIS) in close partnership with SDA Bocconi School of Management, Bocconi University, Milan, Italy.

This publication is a part of “The European Platform for Excellence in CSR Research (CSR Platform)” Project, funded by the European Commission under its 6th Framework Programme for Research (FP6).

The European Academy of Business in Society (EABIS) is Europe’s reference network on corporate responsibility knowledge development and learning issues. Launched in 2002 at INSEAD in France with the support of the European Commission, it is a unique and growing alliance of 80 companies, business schools, universities and affiliate networks covering more than 2000 organisations committed to understanding and integrating business in society issues into business theory and practice.

This special issue of this journal follows from the EABIS 5th Annual Colloquium on “Corporate sustainability, strategic management and the stakeholder view of the firm”. The conference was hosted and organized by EABIS Founding Partner SDA Bocconi School of Management, Bocconi University, Milan, Italy, from 11 to 12 September 2006. The purpose of the colloquium was to investigate ways to link corporate responsibility to strategic management by exploring “a strategic approach to stakeholder management”.

The conference attracted a multi-stakeholder audience of over 360 senior representatives from business, academia, policy-making and civil society, including CEOs of Fortune 500 companies and some of the world’s leading strategy scholars and practitioners. Following a competitive peer review and selection process, all of the papers featured in this special issue were presented and discussed at this high-level forum.

Introduction

The debate on corporate responsibility is ongoing and refuses to fade away as a short-lived fashion. Although the term “CSR” has gained currency with some academics, managers, civil society actors and policy-makers, it remains a largely contested term. The Economist (Crook, 2005), for example, has regularly voiced its skepticism and opposition to CSR, perhaps most notably in a 2005 special report on the “Good corporation”, which provided a strong critique of the theory and practice of CSR.

Nevertheless, The Economist (Davis, 2005) also invited the global managing partner of McKinsey & Co., Ian Davis, to respond to the “Good corporation” feature with a thought piece on “Business and society”. In his article, entitled “The biggest contract”, Davis stressed the strategic importance of a pro-active corporate response to rising expectations and developments in society. He also suggested that CSR programs and policies were often merely tactical and defensive corporate reactions to challenges by activists, and that in order to better manage risk and take advantage of value creation opportunities, top managers needed to re-take the initiative and develop a more profound strategic approach on business and society, based on a new social contract.

Renowned commentators such as Elkington (1998), Zadek (2001, 2004), Willard (2002), and Grayson and Hodges (2004) – and more recently Michael Porter and Mark Kramer – have been advising top managers for some time to make corporate responsibility and sustainability a top management and board issue and to integrate it into companies’ corporate strategy, business models and functional competencies. From our collective experiences and emerging research, this shift of corporate responsibility from a tactical to a strategic level of management is beginning to be demonstrated in a growing number of companies.

Strategy is after all what links a company with its market (economic, financial and technological) and non-market (social, political, cultural and environmental) environment; and a company is inextricably linked by a dynamic process of interaction with a diverse set of stakeholders in this environment, where the boundaries between market and non-market become increasingly blurred. Therefore, corporate responsibility is based on the capability of the firm to generate long-term value through mutually beneficial relationships with its entire network of stakeholders, including both business and socio-political stakeholders.

The evolution of strategic management theory from the 1970s until today

Management studies do not generally attribute much importance to history. This contributes to the impoverishment of the discipline, a failing widely recognized by insiders and outsiders. To help remedy this deficiency it is worth taking a look back at the history of strategic management theory.

Some 30 years ago, Igor Ansoff (1918-2002), one of the founding fathers of strategic management alongside Alfred Chandler and Kenneth Andrews, published his famous From Strategic Planning to Strategic Management (Ansoff, 1976), outlining the proceedings of the first international conference on the subject, which he organized in 1973 as the founding Dean of the Business School at Vanderbilt University.

In his presentation on the “Evolution of the strategic problem”, Ansoff identified four dimensions of strategic thinking, two of which emphasized the links between strategy and society, together with some bold predictions about the future (perhaps too bold as it eventually turned out) (Table I).

Table I

Four dimensions of strategic thinking

Ansoff comments as follows:

… The last two lines of this table show the emerging importance of psychological- sociological-political variables, aspects which by the mid 1980s bid fair to become the dominant aspect of the strategic problem, both internally and externally to the firm. The fundamental cause of this trend is the “crisis of identity” caused by the loss of the social centrality historically enjoyed by the firm. As a result, new patterns of power and influence are emerging within the firm, basic norms and values are being challenged … and ultimately the basic concept of the firm’s legitimacy and social utility will have to be redefined (p. 3).

It would be interesting to speculate why his predictions did not materialize in the 1980s and why, instead, neo-liberal economics and agency theory evolved as the dominant ideas in economics and business. However, that would go beyond the scope and intention of this editorial.

What is essential is to illustrate how obvious it was for strategic management scholars in Ansoff’s day to link an uncertain external environment with the development of internal capabilities, responsiveness to stakeholders and positioning the purpose of the firm within a societal context.

In later publications Ansoff (1979) defined enterprise strategy as a fourth and separate dimension of strategy. This dimension was, according to Ansoff, needed in order to enhance societal legitimacy and to address the increasing importance of socio-political variables in the life of the firm. Included in such variables are “new consumer attitudes, new dimensions of social control and above all, a questioning of the firm’s role in society” (p. 36).

Ansoff argued that the strategic management paradigm would be incomplete without this fourth dimension. He wanted to integrate the firm’s responses to expectations of various constituencies which have demands on the firm, into a coherent strategic framework. In fact, he advocated a stakeholder approach to strategic management, in all but these exact words, at a fourth strategic management level that would cut across the corporate, business and functional strategies. He insisted that this level was not about the “social” responsibilities of the firm, which he considered as tactical. He saw it, instead, as a more comprehensive strategic approach to managing the firm’s constituents’ expectations of the firm’s constituents and the role of the firm in society.

In 1984, James Higgins reinforced Ansoff’s view and identified four levels of strategy (Higgins, 1984):

1. 1.

   Societal response strategy.

2. 2.

   Mission determination strategy.

3. 3.

   Primary mission strategy.

4. 4.

   Mission supportive strategies.

He warned that “social responsibility policies and programs are merely tactical parts of mission supportive strategies” (p. 34) and that “a societal response strategy is a much more encompassing stakeholder approach at a higher level of strategic analysis.” As such, it should be concerned about the purpose of the firm and its role in society, according to Higgins.

A controversy arose around the need to have a separate level of strategic management to address societal responses and stakeholder issues, instead of integrating concerns for societal legitimacy into the fabric of goals and action plans at the corporate, business and functional levels. This latter of the two positions won the argument of the day and from the middle of the 1980s onwards the societal and stakeholder dimensions of strategy disappeared from view in the strategic management literature.

Ed Freeman’s (1984) Stakeholder Approach to Strategic Management effectively established the business and society field, which at first was dominated by business ethics, but has been focused more recently on issues such as the links between social/environmental performance and financial performance, instrumental stakeholder management and corporate governance. Lately, however, there has also been an emerging interest around the link between CSR and corporate strategy.

Michael Porter’s (1980) seminal work on competitive strategy appeared in 1980 and Jay Barney’s (1986) first resource based contribution to strategy theory appeared in 1986 (following Wernerfelt’s (1984) resource base theory published in 1984). The two schools of strategic management, the industry structure perspective or market based view by Porter and the resource (and knowledge) based view by Barney, have been dominating the field of strategic management ever since and to this day.

From within the field, there are attempts to escape the ongoing controversy between the two schools. These provide interesting angles for corporate responsibility. For example, the relational view contests that strategy is not always synonymous with competitive strategy, where competitive strategy is seen to be the measures taken by a single firm acting alone. The relational view holds that co-operative strategies among business partners can create inter-organizational and inter-firm sources of co-operative advantage (Dyer and Singh, 1998).

Equally interesting are developments amongst the leading exponents and founders of each of the two dominant schools of thought on strategic management.

On the one hand, Porter and Kramer (2006) recently attempted, at the level of theory, to link social issues to strategy by integrating the interests and expectations of stakeholders into a market-oriented strategy to create competitive advantage for a firm within its industry sector. This is a significant shift from the position Porter took on corporate responsibility during the 2003 EABIS Colloquium in Copenhagen, where he equated it with strategic philanthropy.

On the other hand, during the 2006 EABIS Colloquium in Milan, Barney recognized that by engaging in CSR, firms may develop resources and capabilities that can create competitive advantage. Barney’s latest work is on the long term value creation potential of CSR (even when cash flow negative) as a result of investing in intangible assets such as trust and reputation with key stakeholders.

But the fact that both Porter and Barney refer to “CSR” as a source of strategic advantage would not sit well with the founding fathers of strategic management (Ansoff) and corporate responsibility (Freeman) alike. Ansoff considered social responsibility programmes not as strategic but as tactical, a point echoed by Ian Davis in his Economist article, where his emphasis on corporate purpose and legitimacy within changing social contracts could have been directly borrowed from Ansoff. Ed Freeman, on the other hand, has always been critical about the term “CSR” as potentially misleading and a cover-up for corporate propaganda.

Both Porter and Barney and their respective schools of strategic management nowadays use corporate strategy and competitive strategy interchangebly: as if strategy were always about improving the single firm’s competitive advantage. Firms are ultimately destined to compete in a market economy. Building on Dyer and Singh’s relational view of the firm, however, one can argue that firms sometimes need co-operative strategies, even if this is only for a limited period. The single firm often has only a limited space to improve social and environmental performance by internalising cost externalities without damaging its competitiveness in an industry sector. The often unsustainable dynamics of global market systems of industries can be altered by co-operative strategies between firms, governments and NGOs. This point was strongly emphased by Peter Senge and Simon Zadek during the 2005 EABIS Colloquium in Warsaw, and is backed up by evidence from sectors such as the extractive, food and footwear industries, where only global co-operative agreements between competitors have created breakthroughs in fighting corruption, child labour, and unsustainable agriculture practices, amongst other issues.

Nevertheless, companies are pushing the boundaries of individual action by exploiting the innovative potential of corporate responsibility and sustainability, thereby enhancing competitive advantage and creating “win-win” strategies for business and society. There is ample proof of this presented in the papers of this special edition. Single daring companies can change the industry structure and the competitive rules through innovation driven by corporate responsibility and sustainability.

Connecting strategic management and corporate responsibility through strategic stakeholder management

Stakeholder theory is well established in the core of the business and society field and although Freeman originally placed stakeholder management within a strategic management context; this has only recently been recognized again, notably in the work of Donaldson, Post, Preston & Sachs (Donaldson and Preston, 1995; Post et al., 2002) and a handful of others. To reiterate an earlier point, strategy is the link between the company and its entire market and non-market (social, political, cultural and environmental) environment, in which the firm is in dynamic interaction with a diverse set of stakeholders.

The stakeholder view of the firm states that the capacity of a firm to generate sustainable wealth over time, and hence its long-term value, is determined by its relationships with critical stakeholders (Post et al., 2002, p. 9). Any stakeholder linkage may be the most critical one at a particular time or on a particular topic, but a company can only last successfully over time if it is able to build and maintain sustainable and durable relations with an entire stakeholder network where all players mutually influence each other. These linkages are the essential assets that managers must manage, and they are the ultimate sources of the firm’s success.

Publications released by firms – such as the growing number of corporate responsibility reports and coverage of social, environmental and governance issues in annual reports and other outputs, confirm how much firms realize that stakeholder relations management can substantially contribute to their strategic success. This is also confirmed by empirical academic research. Within the strategic management literature and practice, it is recognized that the main determinants of a firm’s successful performance are its access to tangible and intangible resources and knowledge (the resource and knowledge perspective of the firm) as well as its position within its industry structure (the industry structure perspective of the firm) and that these perspectives need to be integrated to recognize that resources, capabilities and also relationships are the real sources of strategic fit.

In line with the findings of Post, Preston and Sachs, it can be argued that, in addition to the firm’s access to resources and knowledge and its position within the industry sector, a third strategic perspective that needs to be considered is the firm’s legitimacy in the socio-political environment as a determinant for success (which we call the social-institutional perspective of the firm). This third perspective of the firm is not yet a consistent theory, but it is underpinned by approaches like legitimacy theory, social contract theory, corporate social performance and others. It also borrows concepts from institutional economics and considers the cultural, historical and political origins and contexts of the firm.

This strategic perspective views the firm as a socio-political institution that needs to enhance the societal legitimacy required for it to maintain its license to operate with its stakeholders, to capitalize on collaborative relationships with socio-political actors, and to gain from public goodwill and trust. Post, Preston and Sachs call this perspective “the stakeholder view of the firm”, but we argue that stakeholders play an important role in all three perspectives. Thus, it is possible to propose a broader relational view of the firm that goes beyond business relations and encompasses the entire set of stakeholder linkages from the three perspectives.

Therefore, the traditional classification of stakeholders according to the three perspectives is misleading:

1. 1.

   Industry structure: suppliers, customers, competitors, regulators.

2. 2.

   Resource base: employees, investors, partners.

3. 3.

   Social-institutional: NGOs, governments, unions, communities.

All stakeholders can contribute to the firm’s unique resources and capabilities and can affect the firm’s competitive position in the industry, and any stakeholder can behave as a socio-political actor affecting the societal legitimacy of the firm. As such, stakeholder management cuts across the three different perspectives on strategy – market based strategy, resource based strategy and society based strategy – and across corporate, business and functional levels of strategy within firms. It is seeking the long-term survival and strategic success of the firm through resources, capabilities, knowledge, relationships, social capital and reputation.

Strategic stakeholder management is therefore the first of the two main linking platforms between corporate responsibility and strategic management (Figure 1)[1].

Figure 1

Linking corporate responsibility and strategic management by strategic stakeholder management

Strategic stakeholder management is not only an instrumental approach, but it is also implicitly normative through its emphasis on the relational (as opposed to contractual) character of the firm’s stakeholder network. Mutually beneficial and trusting relationships can only be built with integrity and respect.

Strategic management and corporate responsibility in practice

Although it may be surprising to executives and those involved in strategy practice, strategic management theory still struggles to fully incorporate the societal perspective. As the management of social, environmental and governance issues rises up the strategic management agenda for executives and other stakeholders alike, as is currently the case, we may be witnessing an ever greater gap between theory and practice on these issues. This could be indicative of the level of complexity involved in stakeholder management in an era of powerful global forces such as major advances in technology and communications and the impact on trust and accountability as a result of greater transparency. However, it may also point to the inability of traditional strategic management theory to keep up with the real concerns of senior executives “at the coalface” and the pace of change in the business environment (on business in society issues specifically, but perhaps also more broadly).

Whilst the landscape is highly fragmented, when we consider the corporate responsibility concerns of CEOs, particularly those in large multinational companies, and what management teams are doing to manage risk and to turn societal expectation and natural resource challenges into value creation, we see that they are blending market based, resource-based and society based views of the firm. In practice, they are applying all three in different parts of the business model, at different times, to manage different challenges and opportunities.

First, we see an emerging trend towards companies using traditional strategies and acting alone to exploit new markets in the developed, emerging and developing world for environmental, ethical or socially useful products. Second, we see companies working either alone or, more commonly, in “alliances of convenience” with rivals and a complex array of stakeholders to manage competition, costs and effective sustainability solutions, often in the form of self-regulation and voluntary standards and commonly at industry level. Last but not least, we see companies working with governments, supranational and multinational institutions and stakeholders to reshape the rules of the game in the form of regulation, often to shape future markets (Oppenheim et al., 2007).

What this entire space really misses, therefore, is an appreciation of the increasing complexity of the business context, especially for global companies, in, on the one hand, trying to match an ever-more competitive business environment (e.g. changing capital structures such as the rise of private equity and hedge funds, the disaggregation of value chains in industries, etc., the growing influence of China and India in terms of both supply and demand), with, on the other hand, growing stakeholder concerns and natural and human resource realities. Faced with these challenges, it is perhaps unsurprising that companies are trying to align commercial objectives with effective stewardship on social and environmental issues, that may in turn shape current and future markets and market rewards.

Contents of this special issue

The papers selected for this special issue present fascinating, often challenging perspectives and insights in this debate on the value and importance of strategic stakeholder management. To mirror the theoretical-conceptual framework used at the Milan Colloquium, they are organized here into five main sections and a closing last paper:

1. 1.

   Strategic management, corporate responsibility and stakeholder management.

2. 2.

   Corporate responsibility from a resource and knowledge perspective.

3. 3.

   Corporate responsibility from an industry structure perspective.

4. 4.

   Corporate responsibility from a social-institutional perspective.

5. 5.

   Corporate responsibility and strategic management in small and medium-sized enterprises.

6. 6.

   Closing paper: drawbacks to pursuing corporate responsibility without a strategic framework.

The papers in the 5th section could have been spread over the previous sections but we decided to attribute particular significance to corporate responsibility and strategic management in small and medium-sized enterprises (SMEs). Research on SMEs needs to be enhanced as they represent a large proportion of the economy and employment. The European Commission (EC) attributes special importance to SMEs, a position that was again endorsed by the March 2007 European Parliament Report on CSR, authored by MEP Richard Howitt. This standpoint has been echoed elsewhere around the world, for example in the Chair’s conclusions from the May 2007 G8 Labor and Employment Ministers Conference held in Dresden, Germany. It is also a topic of growing interest amongst EABIS members, which demonstrates EABIS’ commitment to develop better knowledge on this area and highlights in particular the deep engagement of SDA Bocconi School of Management as the EABIS founding partner tasked with leading knowledge development on SME issues.

Last but not least, we would like to extend our special thanks to Tom Donaldson for providing an excellent closing paper, which serves as a reflection on the drawbacks of firms’ endeavors to enforce corporate responsibility without a strategic management context. This paper is based on his keynote speech delivered at the 2006 EABIS Colloquium in Milan.

Strategic management, corporate responsibility and stakeholder management

Selected papers.

• •

  “Integrating corporate responsibility principles and stakeholder approaches into mainstream strategy: a stakeholder-oriented and integrative strategic management framework”, Takis Katsoulakos and Yannis Katsoulacos.

• •

  “Towards strategic stakeholder management? Integrating perspectives on sustainability challenges such as corporate responses to climate change”, Ans Kolk and Jonatan Pinkse.

• •

  “Stakeholder engagement in emerging economies: considering the strategic benefits of stakeholder management in a cross cultural and geopolitical context”, Loke Min Foo.

• •

  “Measuring the business case by linking stakeholder and shareholder value: how managers need to make strategic trade-offs between conflicting requirements of shareholders and the broader set of stakeholders”, Lance Moir, Mike Kennerley and David Ferguson.

Areas for further research. It seems imperative that market and resource based theories should pay greater attention to corporate responsibility through empirical research. According to the relational view of the firm within the strategic management field, new strategy development processes are needed. They should take into account not only the expectations of traditional stakeholder categories (shareholders, investors, unions, etc.), but also a broader set of constituencies. Furthermore, innovative and shared engagement processes to attract resources capable of supporting the strategy definition should be implemented. Therefore, in this field, several experiences have to be mapped and studied and new methodologies have to be built. The final perspective is to go beyond the traditional triple bottom line (TBL) Agenda to foster a more comprehensive approach to long-term value creation for the benefit of shareholders, a broad range of other stakeholders and society in general.

Corporate responsibility from a resource and knowledge perspective

Selected papers.

• •

  “Are corporate responsibility and innovation compatible or contradictory? Towards a dynamic reinterpretation of C(S)R demonstrating how corporate responsibility can be a resource for innovation if it is interpreted as a liberating, not constraining, framework for new ideas and approaches”, Atle Midttun.

• •

  “Identifying corporate innovations through engagement with non-profit stakeholders: how collaborative relationships with nonprofit organisations can constitute a resource for innovation”, Sara Holmes and Lance Moir.

• •

  “Using capital transaction due diligence to demonstrate CR assessment in practice: environmental and social due diligence processes highlight intangible risks and opportunities in mergers and acquisitions and other capital transfers”, Franz Knecht and Vera Calenbuhr.

• •

  “Incorporating CR and stakeholder management into corporate strategy: a case study of the CAN experience 2002-2006 showing how corporate responsibility can create strong stakeholder identification and strategic differentiation”, Iñaki Vélaz, Alejo José G. Sison and Joan Fontrodona.

Areas for further research. If the strategic success of a firm depends on its relationships with stakeholders, the main value-drivers of a business are the intangible assets directly affecting the quality of these linkages. These types of intangibles comprise knowledge and trust resources, so it follows that they could have a huge impact on customer/consumer behavior. Therefore, it is crucial to explore the potential of CR as a source for building intangible assets and thereby enhancing corporate performance. This could allow the construction of a consistent business case for corporate responsibility by developing new frameworks capable of overcoming the traditional and elusive studies on the linkages between corporate social performance (CSP) and corporate financial performance (CFP).

Corporate responsibility from an industry structure perspective

Selected papers.

• •

  “Stakeholder relations pay-off by maintaining the license to operate: a comparative case study of the Swiss telecommunications industry”, Isabelle Kern, Sybille Sachs and Edwin Rühli.

• •

  “The eras and participants of fair trade: an industry structure/stakeholder perspective on the growth of the fair trade industry”, Iain A. Davies.

• •

  “Corporate responsibility in the Italian banking industry: creating value through stakeholder management (as an integral part of corporate strategy)”, Gianna Zappi.

Areas for further research. Strategic stakeholder management calls for greater attention to the specificities of different industry structures and contexts. Therefore, it is necessary to go further with in-depth analyses of the contingent factors that influence corporate behavior and choices in CR not only at industry level, but also at cluster level. This could also help to clarify what conditions could support the implementation of strategic partnerships between companies, governments and civil society to enhance social and environmental performance in specific industry sectors.

Corporate responsibility from a socio-institutional perspective

Selected papers.

• •

  “The impact of national culture on corporate social performance: as some dimensions of national culture do influence corporate social performance, and others apparently do not, MNCs should proceed with global CR strategies combined with sensitivity to local idiosyncracies”, Dimo Ringov and Maurizio Zollo.

• •

  “The Johnson & Johnson bridge to employment initiative: building sustainable community education partnerships. A case study on community stakeholder management to support young people to prepare for and take up careers in the health care sector”, Michael Bzdak.

• •

  “Entrepreneurship for social impact: encouraging market access in rural Bangladesh and addressing institutional voids that inhibit the poor from participating in markets”, Johanna Mair and Ignasi Marti.

Areas for further research. The social institutional view of the firm needs more empirical underpinning from comparative research on social contracts and the role of business (and government) in society, and also how globalization affects these social contracts. This research needs to be linked to the research into the varieties of (competing) forms of capitalism within a geopolitical context. Obviously, the role of firms in global governance is a further key area, on which the next EABIS Colloquium in Barcelona will focus. Furthermore, a broader debate on the nature of corporate governance (CG) from a societal perspective needs to be underpinned by further research on the future of CG.

Corporate responsibility in small and medium-sized enterprises

Selected papers.

• •

  “SME social performance: a four cell typology of key drivers and barriers on social issues and their implications for stakeholder theory”, Sophia Maria Kusyk and Josep M. Lozano.

• •

  “Corporate responsibility in Ireland: barriers and opportunities experienced by SMEs when undertaking CR”, Lorraine Sweeney.

• •

  “The collaborative creation of a CR business model in a Spanish small enterprise: a case study of managing relevant intangible assets in order to improve stakeholder and strategic management in a small firm”, José Luis Fernández Fernández, Juan Benavides Delgado and Nuria Villagra García.

Areas for further research. If SMEs are characterized by what some authors have called sunk CSR (Perrini et al., 2006), it could be important to examine how these kind of emergent strategies are influenced by relationships, especially with local stakeholders (e.g. community, employees, municipalities, etc.). Furthermore, new studies are necessary to clarify the linkages between stakeholder relationships, social capital and the competitiveness of SMEs. Consulting research recently undertaken by Ernst & Young in Germany highlights that a majority of the most successful Medium-Sized Enterprises are strategically engaged in CR. This insight could form the basis for further academic research.

Closing reflection

• •

  “‘Ethical blowback’: the missing piece in the corporate governance puzzle – the risks to companies that fail to understand and respect their social contract”, Thomas Donaldson.

Ethical blowback occurs when business actors are perceived to have broken the rules of the implicit social contract between business and society, and those perceptions spawn ongoing negative reactions that similarly break rules of the social contract. Current approaches to corporate governance reform can provoke ethical blowback, namely Sarbanes-Oxley type regulations and ethical compliance programs in companies.

Areas for further research. One can conclude from this closing reflection that the debate and research on the future of corporate governance needs to be broadened by adopting a more holistic and strategic stakeholder view. Furthermore, the case can be made for a strategic approach to Corporate Responsibility, of which corporate governance is an influential element. Firms which ignore a corporate and business strategic approach to CR and pursue instead a compliance approach of business ethics not only risk blowbacks, but also competitive disadvantage, since they tend not to strategize around CR. Current ethical codes of conduct seem unable to address the emerging societal expectations of broader transparency, accountability and engagement by companies. The key question is how firms can strengthen and maintain their license to operate in different communities and with different constituencies. This in turn calls for empirical research and theory building in strategic stakeholder management.

Notes1. The other main linking platform between strategic management and corporate responsibility is the global governance platform. Firms are increasingly expected to provide for global leadership to address global and local challenges on poverty, health, illiteracy, unemployment, climate change, corruption, etc. The 2007 EABIS Colloquium in Barcelona (20-21 September) will address the governance challenge for companies as a strategic challenge – visit www.eabis.org for more information.

AcknowledgementsThe authors would like to particularly thank Simon Pickard, Deputy Director of EABIS for his support, patience and insight throughout the editorial process.

About the Guest EditorsGilbert Lenssen is President of EABIS, Professor at Leiden University and Visiting Professor at Henley Management College, former Professor of International Management at the College of Europe (Bruges/Warsaw) and Visiting Fellow at Templeton College, University of Oxford. He is a member of the board of the European Foundation for Management Development (EFMD), the academic advisory boards of several business schools, and the editorial boards of a number of academic journals. Before moving into academia, Gilbert Lenssen enjoyed an international corporate career over 25 years in Belgium, the UK, USA, Germany, Spain and India, culminating in his position as Vice President for BP’s Solar International Division. He is a lifelong fellow of the Royal Society of Arts. Gilbert Lenssen is the corresponding author and can be contacted at: gilbert.lenssen@eabis.org

Francesco Perrini is Full Professor of Management and CSR and holds the Chair of Social Entrepreneurship in the “Giorgio Pivato” Management Department of Bocconi University in Milan. He is also a Senior Professor of Corporate Finance and Real Estate and Director of the CSR Group at the SDA Bocconi School of Management. He sits on various advisory/management boards, including the Academic Network Board of EABIS, the Board of FINETICA and I-CSR, and the Membership Committee of SIM Division at the Academy of Management. His primary research interests include Corporate Responsibility and Social Entrepreneurship.

Antonio Tencati is Assistant Professor of Management and CSR in the “Giorgio Pivato” Management Department at Bocconi University. He is a Senior Researcher at SPACE Bocconi, the European Research Centre on Risk, Security, Occupational Health and Safety, Environment and Crisis Management. He is also a member of the Business Ethics Faculty Group of the Community of European Management Schools (CEMS). His primary research interests include Corporate Social Responsibility and Management of Sustainability.

Peter Lacy is Executive Director of EABIS. He is also a Senior Advisor to McKinsey & Co. A management consultant by background, he directs EABIS activities, manages its knowledge development and learning portfolios and leads its team in Brussels. Peter has written and spoken on corporate responsibility across Europe and sits on boards and advisory committees for the EU Commission, national governments, Fortune 500 companies, AccountAbility, AIESEC and the journals of Corporate Governance and Corporate Citizenship. Peter worked previously in the strategy divisions of Accenture and Andersen Consulting. He graduated from the University of Nottingham with first class honors in politics.