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Centre of expertise iGOR

Faculty of Economics and Business
Corporate Responsibility

Corporate Responsibility

Businesses sometimes struggle with the question where their responsibilities begin and end. In the private sector, a profit motive may initially legitimise the company's existence. Its business operations, though, cause a multitude of side effects which are not immediately recognised on the balance sheet. Environmental and social side effects can take on all kinds of shapes and yield a multitude of (strategic) questions which vary per company. What do we recognise and what don't we recognise? How do we integrate this in our business operations? Will short-term investments in environmental and social issues be profitable in the long term? Should we be proactive and take more action than our competitors or is it better to wait for legislation? Should we be open about what we are doing or shouldn't we, as a matter of fact? And how do we integrate this in our governance systems?

In addition to these internal discussions, this topic also relates to the changing perceptions in society about the responsibilities which organisations have. All kinds of stakeholders have different ideas and expectations. An appropriate approach towards stakeholders' relations is vital for the long-term `license to operate’ which organisations have. Will an explicitly responsible approach generate additional resources from financial markets? How do we develop reliable arrangements with local communities which can create shared value?

These questions are even more urgent at an international level. In the Netherlands, many such problems have already been solved through national legislation or tradition. New questions are emerging in a cross-border context, though. For instance, what meaning does a trade union have in China? How can you provide Ugandan employees with a pension? How do you process chemical waste when there is no suitable infrastructure? Do local employees meet our integrity standards? How can we ensure that our suppliers meet our standards? And the suppliers of our suppliers? What changing role do NGOs play in this story?

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