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Adding public value: the limits of corporate responsibility |
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This series explored the proposition that corporations exploiting natural resources might have increasing interest in promoting host countries' governance and public sector competencies. If so, this represents a development in the corporate social responsibility agenda. The five workshops in the series brought together academics, corporate managers, resource-rich country policy managers and other interest groups to review the nature and extent of this change, to explore the incentives that have driven it and to assess its potential and challenges. Topics covered by the discussion included the boundaries between state, citizen and corporate responsibility, the nature and causes of economic and political forms of the 'resource curse', problems in measuring government performance, the incentives that might drive corporate investments in public sector competencies and the incentives governments might have to use or misuse natural resource revenues. |
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This research seminar series was supported by the Economic and Social Research Council and organised in association with The National Centre for Business Sustainability and The Centre for Energy, Petroleum & Mineral Law & Policy, University of Dundee | ||
Most of the PowerPoint presentations used at the seminars are now available on request. For more information email admin@opi.org.uk. Meeting notes can be found below (ISSN 1748-832X). |
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| Corporate investments in good governance: where are we now? | (PDF) | ||
Edward Bickham, Anglo American, UK Prof George Frynas, Middlesex University Business School, UK Mark Henstridge, BP, UK Rob Lake, Henderson Global Investors, UK Hilary Sutcliffe, Shared View, UK |
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The boundaries between corporate and public responsibilities vary in different circumstances as do the incentives that companies have to invest in public sector competencies. The instruments they have available to contribute are still being developed. Key questions emerging from the discussion included: What circumstances determine the boundaries between corporate, state and citizen responsibilities in ensuring that public revenues from natural resource extraction are well spent? What are the potential and limits of published financial and performance information in influencing public sector performance? The central importance of public revenue and expenditure management to ensure an efficient and equitable use of revenues generated from the exploitation of natural resources. Taxonomies classifying companies by sector, ownership and incentive structure and states by institutional features might be a useful first step in unpacking the interlocking incentives that either promote or detract from the use of natural resource revenues for economic and social development. |
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| Challenging metrics: measuring governance and public sector performance | (PDF) | |
John Bray, Control Risks Group, Tokyo Fredrik Galtung, Tiri Vanessa Herringshaw, Revenue Watch UK Jana Malinska, OECD, Paris Alex Matheson, Institute of Policy Studies, NZ Steven Van de Walle, University of Birmingham, UK |
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| It is widely believed that well developed institutions and governance arrangements are essential for countries to harness natural resource exploitation for economic and social development. The relationships between the quality of governance and institutions and economic and social development are not straightforward. However, they need to be understood for governments to avoid the “resource curse” and for corporations to be able to interpret better their operating environment. The problem of measuring these relationships challenges the assessment of progress in improving government performance. This workshop explored the reasons for, and challenges in, measuring the quality of governance. | ||
| Drivers of corporate investment in public sector capabilities | (PDF) | ||
Andrew Bone, De Beers, UK Nicolas di Boscio, Rio Tinto, UK Barry Newton, formerly Booker Tate Ltd, UK Malcolm McPherson, Kennedy School of Government, Harvard University Richard Murphy, Tax Research LLP, UK Raj Thamotheram, formerly USS, UK |
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The idea that 'good governance' matters for successful business operations and thus economic development has taken centre stage in the development rhetoric since the 1990s. In recent years, a number of academics and policy makers have called for greater efforts on part of the business community to help improve public governance. However, as yet there is no clear picture of exactly what the private sector might contribute, what incentives corporations might have to invest in public sector competencies and what might be the boundaries of business responsibility in different settings. This workshop discussed the concept of corporate investment in public sector capabilities and its links with other forms of corporate social responsibility. Four factors were identified that appear to be necessary conditions for companies to invest in government competencies. Finally, the workshop investigated the role of NGOs, international organisations and donor agencies, governments and individuals within companies as potential facilitators of such investment. |
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| Drivers of change in government behaviour | (PDF) | |
Richard Auty, University of Lancaster, UK Evelyn Dietsche, University of Dundee, UK Thandika Mkandawire, UNRISD, Geneva Willi Olson, Chatham House, UK Paul Stevens, University of Dundee, UK |
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| Contrary to most economic growth theory, some, but not all, natural resource abundant countries grow more slowly than countries less well endowed with natural resources. A theoretical construct based on the effects of rents on political behaviour is summarised here which may help to explain some of these differences. Additionally, the popular hypothesis that ‘good institutions’ explain differences in outcomes across NR abundant countries is discussed and challenged with a case study on Chile. Finally, oscillating international ideological shifts between an emphasis on market failure and state failure, together with the influence of economic and political conditions, are identified as important variables in explaining recent shifts in policy stance. | ||
| The scope for corporate investments in public value | (PDF) | |
Tony Paul, CEED, Trinidad & Tobago Halina Ward, IIED, UK |
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Corporate investments in public sector capabilities vary widely in nature, ranging from the transfer of specific skills and knowledge to the promotion of ideas about `good governance.' The incentives for corporations to invest in any particular case appear to be shaped by the company's perceived need to protect its reputation or investment and modified by the stances adopted by the host government, by institutional investors, by IFIs and international donors and by NGO activitists. The relative importance of each requires further investigation. A particularly important factor shaping corporate behaviour appears to be the leadership provided by individuals, especially senior management. Finally, there is some evidence that incentives for investment in public sector capabilities differ between private and state-owned companies. The 'boundaries of corporate responsibility' are the outcome of complex negotiations host country governments and companies, influenced by other factors such as civil society and international organisations and the ideological and political ambience. However, quite fundamental conceptual and analytical problems remain to be resolved. The normative (what companies should do) and the analytical (what they actually do) requires careful distinction. |
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