the public role of private enterprise summary 2004-2006 abstracts from reports and working papers of...

Research Summary 2004 - 2006

Abstracts from Reports and Working Papers of the Corporate Social Responsibility Initiative

John F. Kennedy School of Government, Harvard University

A Cooperative Project among: The Mossavar-Rahmani Center for Business and Government The Center for Public Leadership The Hauser Center for Nonprofit Organizations The Joan Shorenstein Center on the Press, Politics and Public Policy

Citation

This report may be cited as: Corporate Social Responsibility Initiative. 2006. “Research Summary 2004-2006: Abstracts from Reports and Working Papers of the Corporate Social Responsibility Initiative.” Compiled by Jennifer Nash. Cambridge, MA: John F. Kennedy School of Government, Harvard University.

Corporate Social Responsibility Initiative

The Corporate Social Responsibility Initiative at the Kennedy School of Government is a multi-disciplinary and multi-stakeholder program that seeks to study and enhance the public role of the private enterprise. It explores the intersection of corporate responsibility, corporate governance and strategy, public policy, and the media. It bridges theory and practice, builds leadership skills, and supports constructive dialogue and collaboration among different sectors. It was founded in 2004 with the support of Walter H. Shorenstein, Chevron Corporation, the Coca-Cola Company, and General Motors. The views expressed in this research summary are those of the contributing authors and do not imply endorsement by the Corporate Social Responsibility Initiative, the John F. Kennedy School of Government, or Harvard University.

For Further Information

Further information on the Corporate Social Responsibility Initiative can be obtained from the Program Coordinator, Mossavar-Rahmani Center for Business and Government, John F. Kennedy School of Government, 79 JKF Street, Cambridge, MA 02138, telephone (617) 495-1446, telefax (617) 496-0063, email [email protected]. The homepage for the Corporate Social Responsibility Initiative can be found at: http://www.ksg.harvard.edu/cbg/csri/home.htm

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RESEARCH SUMMARY

2004-2006

ABSTRACTS FROM REPORTS AND WORKING PAPERS OF THE CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

CONTENTS

I. Corporate Social Responsibility Initiative Reports

3 Our reports represent original research on the most promising approaches to solving complex public problems. They are written by CSRI faculty, senior fellows, and staff members, often in collaboration with other organizations.

II. Working Papers

15 Our Working Papers offer a variety of perspectives on defining, categorizing, and evaluating corporate social responsibility. The Working Paper series includes the work of CSRI faculty, senior fellows, and staff members, as well as affiliated scholars from other institutions. Many Working Papers are subsequently published in trade or peer-reviewed journals or as book chapters.

III. Selected Works of Interest by Harvard University Faculty

41 Research on corporate social responsibility at Harvard University extends beyond CSRI. We include summaries of a new book, a journal article, and a forthcoming book by Harvard University faculty on the subject of corporate social responsibility.

To download complete copies of reports and working papers, please visit the CSRI website at: http://www.ksg.harvard.edu/cbg/CSRI/home.htm


Reports

3

Leadership, Accountability, and Partnership: Critical Trends and Issues in Corporate Social Responsibility

Report of the CSR Initiative Launch Event

Jane Nelson

Director Corporate Social Responsibility Initiative John F. Kennedy School of Government

Harvard University

2004, CSRI Report No. 1

This report summarizes key messages and challenges raised by participants in the “Launch Event” for the Corporate Social Responsibility Initiative held on March 4, 2004. The purpose of the event was to help set an agenda for research and action for the new Initiative. More than 100 leaders from academia, policy think-tanks, government bodies, the investment community, foundations, and business participated. The report elaborates eleven themes that emerged through conference panels and discussions and in response to a survey organizers distributed to participants prior to the event: 1. “Corporate responsibility” is not just about what companies do at the level of the

firm. It must be understood within the broader systemic context and governance frameworks within which business operates.

2. Government plays a crucial role in setting the context for corporate social responsibility (CSR).

3. Government-directed approaches to influence CSR include a wide spectrum of interventions from purely voluntary to mandatory. More research is needed on the efficacy and effectiveness of alternative approaches.

4. The relationship between a company’s actions in the areas of CSR, corporate governance, and public policy needs to be better understood

5. Many factors may be driving companies’ CSR activities, including managers’ concern for intangible assets such as reputation, plans to enter new markets, or the perception that social risks should be managed in an integrated manner.

6. CEOs and boards of directors play a crucial and growing role in defining and shaping a firm’s CSR activities.

7. CEO leadership networks—groups of CEOs that come together to address specific social, ethical, or environmental challenges—merit closer attention.

8. Some segments of the financial sector are redefining risk, opportunity, and fiduciary responsibility to include aspects of CSR.

9. The media is playing a variety of roles in influencing CSR practices, including “watchdog,” “endorser,” and “multiplier.”

10. Evaluating CSR performance is important, but few objective measures exist. 11. “Scaling-up” multistakeholder partnerships remains a major challenge. These themes offer a rich menu for further research and dialogue.

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HIV/AIDS and Business in Africa and Asia:

A Guide to Partnerships

Mossavar-Rahmani Center for Business and Government Social Enterprise Initiative World Economic Forum

UNAIDS

2004, CSRI Report No. 2 Businesses possess expertise and skills that, if applied to the HIV/AIDS pandemic, could assist in developing innovative approaches and deploying resources in ways that could greatly assist the fight against HIV/AIDS. Businesses possess intellectual property, marketing expertise, public relations skills, distribution channels, expertise in pharmaceutical development, and project management skills. Businesses also have experience in product launches, supply chain management and manufacturing. They have the ability to access and understand important subsets of the population, their employees, major business partners, and customers. In short, many are well-positioned to make important contributions in the fight against HIV/AIDS.

Yet, businesses do not know how best to respond to a problem of such global proportions. There are a number of questions that need to be considered including: • Should the company act? • What possible roles might it play? • How might the company most effectively approach the problem? • Should it act alone or in partnership? • How does a company begin to analyze the risks, resources and management skills

needed to manage such partnerships over time? This report presents a framework to assist businesses as they decide how to confront HIV/AIDS. The authors pay particular attention to the initiation and management of cross-sector partnerships because, they maintain, those partnerships offer the most promising approach to combating HIV/AIDS. The goal is to delineate a process by which partnerships can be cultivated and managed over time. The authors have drawn on the experiences of a variety of businesses that have chosen to engage in partnerships to address HIV/AIDS to illustrate the steps of these guidelines and have given particular attention to two partnerships: Compagnie Ivoirienne d’Electricite (CIE) and the Ministry of Health (MOH) in the government of Côte d’Ivoire; and Old Mutual South Africa and Soul City. These partnerships were selected because they offer the opportunity to examine the unique challenges of multisectoral partnering on the issue of HIV/AIDS.

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Sustainability and Risk:

Climate Change and Fiduciary Duty for the Twenty-First Century Trustee

Coalition for Environmentally Responsible Economies (CERES) Corporate Social Responsibility Initiative

Energy Technology Innovation Project, Belfer Center, Kennedy School of Government


For many investors, especially those with fiduciary duties, climate change and its risk to investment portfolios present a new, complex, and rapidly changing challenge. On September 23, 2004, 43 participants convened at the Kennedy School of Government for a unique workshop for pension fund trustees to explore the connections between fiduciary responsibility and the risks to investments posed by global climate change. Working with Harvard faculty, attorneys, pension fund leaders, and other experts, the trustees explored what they can do—consistent with their fiduciary duties—to address the financial risks and investment opportunities of climate change. To explore the connection between climate change and the fiduciary’s role, the meeting focused on answering five key questions: • Is climate change a serious risk? • Does climate change create economic and investment risks? • If so, what steps can fiduciaries take to address that financial risk? • Does a fiduciary have a legal right or responsibility to consider climate risk, or more

importantly, to act based on knowledge of the risks? • Are some pension funds acting, and if so, how? After hearing from experts, workshop participants concluded that climate is a serious concern that presents risks and opportunities to investors. Fiduciaries have legal authority and may well have an obligation to address climate risk. Many pension funds are already acting to analyze the issue, raise awareness, encourage corporate disclosure, and press for improved corporate strategies to address climate risk. Much must be done to educate investors and others in the financial community about these risks and to mobilize concern and action among investors and companies.

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Partnering for Success: Business Perspectives on Multistakeholder Partnerships


International Business Leaders Forum World Economic Forum


One of the key leadership challenges of our time is to find new ways to harness the innovation, technology, networks, and problem-solving skills of the private sector, in partnership with others, to support international development goals and to do so in a manner that makes sound business sense and does not replace or undermine the role of government. Business leaders have a growing interest, both in terms of risk management and harnessing new opportunities, to become engaged. There are already pioneers. Some of the world’s most successful companies are recognizing the potential to turn innovative solutions to development challenges into profit-making ventures and new forms of social investment. They are also acknowledging the growing risks of inaction. Developing economies represent important future markets. Yet, in many cases there are market failures or failures in governance and weak public administration or infrastructure in these economies. This report looks at some of these innovative approaches. Based on a survey of participants in the World Economic Forum’s Global Corporate Citizenship Initiative (GCCI), the report profiles over 40 diverse partnerships in the following areas: • Building framework conditions for good governance • Expanding economic opportunities • Investing in physical infrastructure – water, energy, transportation • Improving access to and the quality of education • Providing better healthcare and affordable treatments These partnerships range from global coalitions to nationwide initiatives and local community projects. They include mainstream business alliances, strategic philanthropy activities, and public policy dialogues. They have engaged thousands of different partners around the world and have leveraged millions of dollars in cash and in-kind resources. The most effective initiatives have mobilized core corporate competencies and are focused on addressing the development challenges that create the greatest risks and opportunities for the participating companies. Multistakeholder partnerships are neither easy nor a panacea. They often have high transaction costs and are difficult to establish and sustain. Many are new and untested. Yet, they offer an important new approach that has the potential to drive innovation, improve governance, raise living standards, and provide opportunity to millions of people. They deserve continued support, engagement, and evaluation from business leaders.

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Business and International Development: Opportunities, Responsibilities, and Expectations


International Business Leaders Forum Edelman


This report presents findings from a survey on the role of business and international development undertaken by the John F. Kennedy School of Government’s Corporate Social Responsibility Initiative, Prince of Wales International Business Leaders Forum, and Edelman. The sample for the study included 25 executives from randomly selected global Fortune 500 companies, 10 randomly selected senior executives from global non-governmental organizations, six journalists, and four analysts from major investment firms. The following points summarize results from the survey: • Multinational corporations, NGOs, and others involved in international development

lack a common and coherent understanding of this concept because it invokes such a wide range of terminology and approaches and often has not been translated into the language of the marketplace.

• Despite differences in definitions, all respondents agreed that the private sector is central to development in emerging markets—for both good and bad.

• Business, NGOs, and the media all agree that business can be most effective by creating jobs and building local businesses.

• Companies recognize that business’ most successful contributions to development are those that harness the unique assets and competencies of a particular company.

• Obstacles, such as corruption and weak infrastructure in developing countries, and some trade and other policies of developed countries, limit the role that business chooses to play in international development.

• Business people, NGOs, and journalists each provided fresh insight into how sectors other than their own play a role in international development, what they are doing well to date, and how they can be more effective.

• Business and NGOs agree that partnerships can yield excellent development results, but have not yet lived up to their potential. They succeed most when all parties provide core assets, management attention, and relevant expertise and when NGOs are willing to collaborate on market-based solutions, as well as address broader policy issues.

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The Global Road Safety Partnership and Lessons in Multisectoral Collaboration

Tamara Bekefi

Research Fellow, Corporate Social Responsibility Initiative Manager, Business and International Development Research John F. Kennedy School of Government, Harvard University


This report focuses on road safety and its relevance to economic growth and public health in a developing country context. It examines some of the challenges of increased mobility and vehicle penetration, why these challenges are important to business and, in turn, what the private sector is doing, or could do, to address the growing economic and health burden of road injuries and fatalities. It describes the structure, function, and activities of the Global Road Safety Partnership, a collaborative organization founded by the World Bank in 1999 to engage business, civil society, and governmental organizations in efforts to address and improve road safety conditions worldwide. It poses the question of whether a multisectoral partnership is a useful framework for addressing the road safety issue and what some of the challenges and lessons have been thus far. Finally, key policy recommendations are provided, as are questions for students and for further research. A bibliography is appended for teaching and research purposes.

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Business as a Partner in Tackling Micronutrient Deficiency: Lessons in Multisector Partnership

Tamara Bekefi

Research Fellow, Corporate Social Responsibility Initiative Manager, Business and International Development Research John F. Kennedy School of Government, Harvard University


Micronutrient deficiency, also known as “hidden hunger,” occurs when people consume foods that are filling but lack critical vitamins and minerals. This report examines the relevance of micronutrient deficiency to economic growth in a developing country context. It explores the importance of this issue to business, and what the private sector is doing, and could do, to address the tremendous burden of vitamin and mineral deficiencies in the developing world. It focuses on Global Alliance for Improved Nutrition (GAIN), an alliance between the public and private sectors, describing its structure, function, activities, and plans to partner further with corporations and multilateral agencies. The report addresses the question of whether a multisectoral partnership is a useful framework for addressing micronutrient deficiencies and what some of the challenges and lessons have been thus far. Finally, key policy recommendations are provided, as are questions for students and for further research. A bibliography is appended for teaching and research purposes.

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Building Linkages for Competitive and Responsible Entrepreneurship: Innovative Partnerships to Foster Small Enterprise, Promote Economic Growth,

and Reduce Poverty in Developing Countries

Jane Nelson Corporate Social Responsibility Initiative and

United Nations Industrial Development Organization (UNIDO) 2006, CSRI Report No. 8

Increasing economic opportunity, productivity and growth is essential for reducing poverty. A crucial element of this is creating jobs, income-generating opportunities and livelihoods for the poor. In particular, improving the access of small enterprises to finance, skills, technology, information, sound business practices, legal rights, and markets. In many developing countries achieving this goal requires effective partnerships and intermediaries that are able to address the market failures, governance gaps and institutional constraints that currently exclude or disadvantage most small entrepreneurs from accessing these public goods and business opportunities. Such partnerships are also essential in helping small enterprises to upgrade and integrate into broader production networks and value chains, which in turn is crucial for raising productivity and employment levels.

This report reviews some key trends in international development, corporate responsibility, and small enterprise development. It offers a conceptual framework and brief examples of six different types of multisector partnership and collective business models aimed at supporting more competitive and responsible small enterprise development:

1. Individual company value chains and “hybrid” business models 2. Collective business linkage initiatives 3. Enhanced trade and industry associations 4. “Blended value” financing mechanisms 5. Institutionalized enterprise support services 6. Multistakeholder public policy structures All six models are positioned on a spectrum between purely commercial business-to-business linkages and fully government-funded services. They are not mutually exclusive. Indeed, they should be viewed as inter-related components of a vibrant enterprise ecosystem, all of them essential for building more sustained and equitable patterns of economic growth. All share two common characteristics: they harness a combination of private and public resources and capacities, and they pursue a combination of direct economic self-interest and broader development objectives. The report is supplemented by country case studies on Tanzania and Viet Nam, and concludes with a set of recommendations for developing country governments, donors, and business leaders on how to increase the scale, scope and effectiveness of these multisector partnerships and collective action models.

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Tanzania: Lessons in Building Linkages for Competitive and Responsible Entrepreneurship

Tamara Bekefi

Corporate Social Responsibility Initiative and United Nations Industrial Development Organization (UNIDO)

2006, CSRI Report No. 9 This report on Tanzania is the first in a series of country case studies that focuses specific partnership models aimed at promoting more competitive and responsible entrepreneurship, with an emphasis on small enterprises. Part I looks briefly at Tanzania’s political economy, the growing importance of the private sector, and the enabling environment for small enterprise development and corporate social responsibility. Two examples of government and donor-led partnership are highlighted as models that other countries may wish to consider: The Tanzania National Business Council, established by President Mkapa in 2001, and the donor-led Private Sector Support Programme, established jointly by the United Nations Development Program (UNDP), UNIDO, and the International Labor Organization. Part II focuses on three multisector partnerships that illustrate important—albeit still largely experimental—new models of doing business, while at the same time achieving broader development goals. The first model, the Private Sector Initiative (PSI), is a partnership between 17 Tanzania-based companies and the Small Business Project, a South African business development and research organization. PSI’s market-focused and market-driven goal is to create a more “joined up” economy by encouraging large companies to source from local small- and medium-sized enterprises (SMEs). PSI holds training programs to help local SME’s improve their businesses and their end products and secure commitments from Tanzania’s largest companies to source from small, local companies. The second model, Growing Sustainable Business (GSB), fosters partnerships among companies in different sectors, the Norwegian Ministry of Foreign Affairs, the Tanzanian government, non-governmental organizations, and UNDP. GSB addresses the challenge of creating market-based solutions to poverty with projects ranging from creation of new supply chains to improved access to telecommunications. The third model, Tanzania’s Cleaner Production Centre, is a partnership primarily among UNIDO, the United Nations Environment Program, the Tanzania Industrial Research Organisation, and the Tanzanian Ministries of Finance and Environment. Its strategy is focused largely on working with local enterprises, and its advisory structure encompasses a range of other institutions. Its overriding goal is to help Tanzanian industry and government implement cleaner production methods in a manner that is economically viable and beneficial.

13

Viet Nam: Lessons in Building Linkages For Competitive and Responsible Entrepreneurship

Tamara Bekefi

Corporate Social Responsibility Initiative and United Nations Industrial Development Organization (UNIDO)

2006, CSRI Report No. 10 This report on Viet Nam is the second in a series of country case studies that focuses on specific partnership models aimed at promoting more competitive and responsible entrepreneurship, with an emphasis on small enterprises. Part I looks briefly at Viet Nam’s political economy, the growing importance of the country’s private sector, and the enabling environment for small enterprise development and corporate social responsibility. Two examples of government and donor partnership are highlighted as models that other countries may wish to consider: the Viet Nam Government’s Agency for Small and Medium Enterprise Development and the Partnership Group for Small and Medium Enterprise Development. Both of these examples illustrate new models of governance that engage the public sector with donors, the private sector, and civil society organizations to achieve common goals. Part II focuses on two multisector partnerships that illustrate important—albeit still largely experimental—new models of doing business, while at the same time achieving broader development goals. The first model, the Viet Nam Business Links Initiative, is a partnership between the Viet Nam Chamber of Commerce and Industry, the International Business Leaders Forum, global footwear companies, local footwear companies, trade associations, the Vietnamese government, bi-lateral and multi-lateral donor agencies, and a number of other non-governmental organizations. It addresses the challenge of improving worker safety and labor conditions along global supply chains. The second model, the Viet Nam National Cleaner Production Centre is a partnership primarily between UNIDO, the United Nations Environment Program, the Hanoi University of Technology, and the Swiss State Secretariat for Economic Affairs. Its strategy is focused largely on working with local enterprises, and its advisory structure encompasses a range of other institutions. Its overriding goal is to promote and help Vietnamese industry and government implement cleaner production methods in a manner that is economically viable and beneficial. For each model, the report looks at the background context and drivers, as well as the model’s core operations, governance structures, strategy, and deliverables. The report then provides a brief evaluation of the model’s impact and effectiveness and its potential for replication or scale-up before offering some lessons and recommendations, both for each specific partnership and more generally.

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Working Papers

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The Public Role of Private Enterprise: Risks, Opportunities, and New Models of Engagement

Jane Nelson


Harvard University

February 2004, CSRI Working Paper No. 1 The concepts of corporate social responsibility (CSR) and corporate citizenship have been part of the business lexicon and the focus of academic study for many years. Over the past decade, however, they have grown to encompass a more complex, multi-dimensional, and global set of issues, with strategic implications for both business leaders and policy makers. This paper outlines some of the key leadership challenges that business faces in this new operating environment, reviews three key trends in corporate social responsibility, provides a summary of different strategies for managing CSR, and points to some of the risks and opportunities associated with the evolving “CSR movement.” It illustrates some of the multistakeholder governance and partnership models that are emerging to (1) address demands for greater corporate accountability and transparency and improve governance more generally, and (2) mobilize the private sector to engage in community and international development efforts aimed at tackling intractable social, economic, and environmental challenges that neither government nor business can solve acting alone.

17

On Collaborative Governance

John Donahue Raymond Vernon Lecturer in Public Policy

Director, Weil Program on Collaborative Governance John F. Kennedy School of Government

Harvard University

March 2004, CSRI Working Paper No. 2

A large and growing fraction of the capacity required to create public value exists outside government narrowly defined. This “distributed” capacity can include financial resources, skilled personnel, physical assets, managerial capabilities, information, and even trust and legitimacy. The outside reservoirs of such capacity include both profit-seeking firms and non-profit organizations. The engagement of non-governmental actors in the pursuit of public missions is by no means new. But it is becoming more important because (1) a large part of the world’s population lives in areas where the formal state is weak, (2) there is a widespread loss of confidence in the mid-20th-century version of the centralized state, and (3) a growing fraction of collective tasks in a complex, interconnected, information-dense world—knit together and energized by powerful market forces—simply cannot be accomplished (well, or at all) by government acting alone. When government is responsible for a mission that depends upon external capacity, there are several ways to engage that capacity. One way is to require entities outside government to play their parts, through mandates, regulations, or other means of imposing obligations. Another is to induce them to participate through contracts, grants, tax incentives, or other means. This paper is concerned with a third approach—collaboration. It offers a taxonomy of collaborative governance and an agenda for its study.

18

On Creating Public Value:

What Business Might Learn from Government about Strategic Management

Mark Moore Daniel and Florence Guggenheim Professor of Criminal Justice Policy and Management

Director, Hauser Center for Nonprofit Organizations

Sanjeev Khagram Assistant Professor of Public Policy



Over the past twenty years, scholars from both the Kennedy School of Government and Harvard Business School have worked with public sector executives to develop a concept of “strategy in the public sector.” The symbol of this idea became a “strategic triangle,” the purpose of which was to focus the attention of government managers on three complex issues they had to consider before committing themselves and their organizations to a particular course of action: • First, what was the important “public value” the organization sought to produce? • Second, what “sources of legitimacy and support” would be relied upon to authorize

the organization to take action and provide the resources necessary to sustain the effort to create that value?

• Third, what “operational capabilities” (including new investments, innovations, and alliances) would the organization rely on (or have to develop) to deliver the desired results?

In this paper, the authors apply this “strategic triangle” to corporate strategy, focusing on the question, “what would it mean for our conceptions of corporate strategy if we started thinking that corporations, too, had to be more systematically concerned about their wider legitimacy and support?” In recent years there has been a sharp escalation in the social roles corporations are expected to play. Companies are facing new demands to be accountable not only to shareholders, but also to other stakeholders such as customers, employees, suppliers, local communities, and policy makers. As a result of this changing business environment, the authors argue that the concept of organizational strategy developed for government agencies may work as well or even better than traditional business models when applied to business organizations. At a minimum, this is probably true for private sector organizations that operate in intensely politicized environments or that depend on maintaining a certain kind of social credibility and legitimacy in order to be successful in consumer and investor markets.

19

Turning Ethical Values into Business Value

Jane Nelson Director

Corporate Social Responsibility Initiative John F. Kennedy School of Government

Harvard University


Corporate citizenship is no longer a philanthropic luxury. It is the heart of what a company stands for and how it is perceived and valued. As investors and financial markets wake up to the impact of global issues on individual business sectors and companies, corporate leaders must realize that failure to engage with issues of social responsibility—and to manage long-term and well as short-term risks to their businesses —could cost their companies dearly. This paper offers steps that leaders in both the corporate and financial sectors can take to integrate social considerations into financial decisions, thereby managing risk and promoting prosperity. A subsequent version of this paper has been published in Global Agenda, the magazine of the World Economic Forum. The citation is: Nelson, Jane. 2004. “Turning Ethical Values into Business Value,” Global Agenda, January: 103-105.

20

American Exceptionalism and Global Governance: A Tale of Two Worlds?

John Gerard Ruggie

Faculty Chair, Corporate Social Responsibility Initaitive Kirkpatrick Professor of International Affairs

Weil Director, Mossavar-Rahmani Center for Business and Government John F. Kennedy School of Government, Harvard University

April 2004, CSRI Working Paper No. 5

The subject of this paper is American unilateralism and its relation to the world of global governance. The author is not interested in routine unilateral acts, which are a universal practice of states. By “unilateralism,” the author refers to the currently held doctrinal belief that the use of American power abroad is self-legitimating: requiring no recourse to the views or interests of others and permitting no external constraints on its self-ascribed aims. By “global governance,” the author means the shared norms, institutions, and practices by which the international community seeks to manage common challenges. This paper poses the questions: Are the United States and global governance on a collision course? If so, how did that come to be, and what are its consequences for the U.S. and for the international community?

21

Reconstituting the Global Public Domain: Issues, Actors, and Practices

John Gerard Ruggie



December 2004, CSRI Working Paper No. 6

This paper draws attention to a fundamental reconstitution of the global public domain: away from one that for more than three centuries equated the “public” in international politics with sovereign states and the interstate realm, to one in which the very system of states is becoming embedded in a broader and deepening transnational arena concerned with the production of global public goods. One concrete instance of this transformation is the growing significance of global corporate social responsibility initiatives triggered by the dynamic interplay between civil society actors and multinational corporations. The UN Global Compact and corporate involvement in HIV/AIDS treatment programs are discussed as examples. The analytical parameters of the emerging global public domain are defined, and some of its consequences are illustrated by the chain of responses to the Bush administration’s rejection of the Kyoto Protocol by a variety of domestic and transnational social actors.

A subsequent version of this paper has been published by the European Journal of International Relations. The citation is: Ruggie, John Gerard. 2004. “Reconstituting the Global Public Domain – Issues, Actors and Practices.” European Journal of International Relations 10(4): 499-531.

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Values-Driven Performance: Seven Business Disciplines for Delivering Profits with Principles

Ira Jackson

Former Director, Mossavar-Rahmani Center for Business and Government



Harvard University


Companies today are under intense pressure to rebuild public trust and to be competitive in a global economy. To do this, they must act with greater accountability, transparency, and integrity, while remaining profitable and innovative. They must engage with activists as well as analysts, cooperate as well as compete, manage social and environmental risks as well as market risks, and leverage their intangible assets as well as their financial and physical assets. The authors have studied sixty multinational companies that are taking a lead in responding to these challenges. Drawing on their experiences, the authors present seven business disciplines that move the concept of corporate responsibility beyond the boundaries of compliance, public relations, and philanthropy, to become a more integral part of corporate governance, strategy, risk management, and reputation: 1. Harness innovation for the public good 2. Put people at the center 3. Spread economic opportunity 4. Engage in new alliances 5. Be performance-driven in everything 6. Practice superior governance 7. Pursue purpose beyond profit Applied broadly, this values-driven approach offers companies new opportunities for value-creation, benefiting not only shareholders, but employees, customers, communities, and society at large.

This paper is based on the book, Jackson, Ira and Jane Nelson. 2004. Profits with Principles: Seven Strategies for Delivering Value with Values. New York: Currency/Doubleday. A subsequent version of this paper has been published by the Ivey Business Journal. The citation is: Jackson, Ira and Jane Nelson. 2004. “Values-Based Performance: Seven Strategies for Delivering Profits with Principles.” Ivey Business Journal (November-December): 1-8.

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Building Public Sector Capacity to Address HIV/AIDS: The Role of the Private Sector

Jane Nelson


Harvard University

January 2005, CSRI Working Paper No. 8 Building public sector health capacity and overcoming systemic obstacles to address HIV/AIDS in affected and high-risk countries are two of the most important and complex leadership challenges faced by national governments and the international community. Depending on the country and situation, they require a combination of short-term crisis management with the often painstakingly slow and multidimensional process of building human, institutional, organizational, and communications capacities and infrastructure in order to strengthen national planning, budgeting, public awareness, and health systems over the longer-term. There is growing recognition that building such public sector capacity is a challenge that governments and intergovernmental bodies cannot tackle on their own. While the central responsibility must remain with government, the private sector— particularly large domestic and foreign corporations and business associations and coalitions—can play a valuable role to help build the necessary public sector capacity and commitment. A number of leading companies have started to implement HIV/AIDS policies and programs for prevention, treatment, and care in the workplace—the most essential place to start for any company with employees at risk. But what about the role of companies beyond their own workplaces? This paper attempts to define how companies can engage in partnerships beyond their own workplaces to help tackle the more systemic and complex obstacles that hinder the scale-up and sustainability of HIV/AIDS efforts in the communities and countries in which they operate. It identifies the following five different types of public health capacity gaps: • Financial capacity • Institutional and infrastructure capacity • Human resource capacity • Public communications and education capacity • National coordination, planning, and monitoring capacity. In each case, it illustrates ways that companies can help to address the gap and provides examples of 15 partnerships where companies are working with government agencies, nongovernmental organizations, and health practitioners.

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The Role of the Private Sector in Global Governance



Harvard University

January 2005, CSRI Working Paper No. 9

The world’s goals cannot be achieved without the private sector. Profitable and responsible businesses, from multinational companies to micro-enterprises, offer enormous potential to drive innovation, spread wealth creation, share technology, raise living standards, and improve the quality of life for millions of people around the world. Conversely, bad or corrupt business practices or the pursuit of illegal profit are the major factors underpinning conflict, poverty, human rights abuses, and environmental decline. While primary responsibility for achieving public goals rests with government, one of the leadership goals and opportunities of our time is to find new ways to engage private enterprises in the achievement of public goals and to do so in a manner that makes sound business sense. For business and society to prosper in the coming decade and beyond, leaders from governments, citizens’ groups, and the business community face five key challenges: 1. Promote greater awareness of how business benefits from the achievement of global

goals. 2. Understand and harness the most effective contribution of private enterprise. 3. Recognize and manage the negative impacts of privatization and market liberalization. 4. Create a better enabling environment for private investment. 5. Experiment with and scale up new business models and new types of partnership. This paper outlines emerging models of accountability, partnership, and leadership that address these challenges and support the achievement of international goals. This paper was written for the World Economic Forum's Global Governance Initiative and their 2005 Global Governance Report, which focused on the role of the private sector. An adapted version of the paper was included as a chapter in the report entitled 'The Role of the Private Sector" (pp 2-15). The author acknowledges the valuable feedback and input of Ann Florini, Senior Fellow, Brookings Institution, and Richard Samans, Managing Director, World Economic Forum.

25

Corporate Social Responsibility as Risk Management

Beth Kytle Senior Consultant, Booz Allen Hamilton

John Gerard Ruggie




This paper develops a conceptual framework for companies to manage the emerging social risks they encounter as they go global, and of the contribution of corporate social responsibility (CSR) programs to managing those risks. Globalization offers many opportunities to companies, but also poses novel sources of uncertainty and risks. Multiple business indicators show that the level of uncertainty for corporate leaders has increased, due in large part to: • Large extended enterprises made up of independent organizations but with

tremendous pressures to grow and perform as a unit; • Rapid rates of change in technology, connections, and information flows as a result of

globalization; and • Problems in managing scale using methods rooted in controlling all decisions across

the entire extended enterprise. To appreciate the importance of CSR to social risk management requires understanding three premises. First, CSR is a natural extension of going global, analogous to other adjustments of “scaling up” (e.g., forming strategic alliances, finding skilled staff in foreign countries). Second, CSR activities are not discretionary expenditures or the target of cost-cutting activities. Third, CSR must be linked strategically to core business functions to reap the full benefits. CSR programs are a necessary element of risk management for global companies because they provide the framework and principles for stakeholder engagement, can supply a wealth of intelligence on emerging and current social issues/groups to support the corporate risk agenda, and ultimately serve as a countermeasure for social risk.

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Legitimacy and Corporate Governance

Cary Coglianese Faculty Chair, Regulatory Policy Program

Mossavar-Rahmani Center for Business and Government John F. Kennedy School of Government, Harvard University


In this paper, the author draws attention to growing parallels between corporate governance and state governance, specifically between institutional features that are now becoming considered for corporate America and institutional features that have long been a mainstay of governmental institutions in the United States. Corporate governance, the author suggests, is becoming structured much more like public government. This structure may well be critical for enhancing trust in corporations and capital markets, but it may come at some cost to other important values. Reforms enacted in a post-Enron environment may limit managers’ discretion to innovate and respond quickly to changing economic circumstances. This paper casts in stark relief a key policy question for corporate governance reform: How far should society go in imposing on corporations the rules and democratic principles of government?

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Public Sector Capacity, Corporate Responsibility,

and Corporate Profitability in Africa

Malcolm F. McPherson Mossavar-Rahmani Center for Business and Government


April 2005, CSRI Working Paper No. 12 Business activities that boost public sector capacity are profitable and socially responsible. They are profitable because a competent, well-managed public sector creates and sustains rapid economic growth. They are socially responsible because improved public sector capacity enhances governance that is essential if private businesses are to expand and prosper. Public sector support for private enterprise and industry has a long history. Contract enforcement, the maintenance of law and order, tax incentives to stimulate particular activities, grants for employee training, support for study tours, and financing of infrastructure are just a few examples. Yet, across most of Sub-Saharan Africa, the boot is on the other foot. Public sector capacities (human, organizational, institutional, and financial) are limited, the result of too little reform, over-stretched agendas, and decades of slow economic growth. In high HIV prevalence countries, these capacities are declining. Private businesses have two options—continued detachment or constructive engagement. Remaining detached will result in the further erosion of public sector capacities compromising all possibility of robust economic growth. Constructive engagement provides an opportunity for boosting public sector capacities in ways that accelerate growth. This paper argues that continued detachment is a dead-end whereas private business engagement with the public sector will produce large mutual benefits.

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Corporate Citizenship in a Global Context



Harvard University

May 2005, CSRI Working Paper No. 13

From Asia to the Americas, business leaders are under intense pressure to rebuild public trust, manage new and unfamiliar risks, respond to rising societal expectations, and remain profitable and competitive in a global economy. As a result, the subject of corporate citizenship is in the spotlight as never before. In a growing number of multinational corporations, the practice of corporate citizenship is moving beyond the boundaries of legal compliance, public relations, and philanthropy to become a more integral part of corporate governance, strategy, risk management, and reputation. Values-driven performance, aimed at protecting existing corporate value and creating new corporate value, and backed by rigorously evaluated and publicly reported targets and metrics for the company’s broader economic, social, and environmental performance, in addition to its financial performance, is becoming a defining feature of the world’s best-led companies.

A version of this paper appeared in Think On, the corporate magazine of ALTANA AG, Issue 6, May 2005.

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Signaling Social Responsibility

Jason Scott Johnston

Robert G. Fuller, Jr. Professor of Law Director, Program on Law and the Environment

University of Pennsylvania Law School

November 2005, CSRI Working Paper No. 14

In this paper, the author provides an economic analysis of how legal rules shape market incentives for corporate social responsibility. This analysis reveals not just the centrality of information to the existence and strength of market incentives, but provides insight into how and when mandatory disclosure and legal liability for false communications is necessary to supplement the incentives for voluntary disclosure that the existence of socially responsible markets provides alone. “Social responsibility” is, of course, hardly a self-defining term. Here, the author simplifies analysis by equating a firm’s performance on some general social responsibility scale with its environmental performance as measured against both existing regulatory and legal standards and a general sense of what constitutes “best practice” within an industry or sector. The author’s analysis reveals that market transactions – both private and public sales of corporate assets as well as transactions in publicly traded securities – are an important avenue through which firms realize comparative advantages in regulatory compliance, and that such transactions have the potential to significantly enhance corporate environmental and social performance. The analysis suggests that from the point of view of enhancing, rather than supplanting, market incentives, the most important thing that laws and regulations do may be to help firms commit to credible communication about their environmental performance. The legal rules that are most crucial in improving corporate social responsibility are not regulations that try to mandate social responsibility corporate behavior, but rather those determining if and when companies are liable for either failing to disclose or falsely communicating about their social and environmental performance.

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The Strategic Use of Decentralized Institutions: Exploring Certification with the ISO 14001 Management Standard

Andrew A. King, Michael J. Lenox, and Ann Terlaak


In this paper the authors respond to calls by previous researchers to clarify the function of decentralized institutions by analyzing the strategic motives of individual actors. They investigate an important type of decentralized institution, certified management standards, and theorize that firms use these institutions to reduce problems that might arise with exchange partners that lack information or fear opportunism. The authors test this theory using the pattern of certification with the ISO 14001 management standard.

A subsequent version of this paper has been published by the Academy of Management Journal. The citation is: King, Andrew A., Michael J. Lenox, and Ann Terlaak. 2005. “The Strategic Use of Decentralized Institutions: Exploring Certification with the ISO 14001 Management Standard.” Academy of Management Journal 48(6): 1091–106.

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Doctrinal Unilateralism and its Limits: America and Global Governance in the New Century

John Gerard Ruggie

Faculty Chair, Corporate Social Responsibility Initiative Kirkpatrick Professor of International Affairs



This paper assesses the shift toward American unilateralism during the first administration of President George W. Bush and what it means for global governance. Building on the work he presents in CSRI Working Paper No. 5, the author is not interested in routine unilateral acts, which are a standard practice of states, especially when taken in self-defense. The particular form of unilateralism of concern here is the doctrinal belief that the use of American power abroad is entirely self-legitimating, requiring no recourse to the views or interests of others, and permitting no external constraints on its self-ascribed aims. By global governance, in turn, the author means the constellation of treaty-based and customary international law, shared norms, institutions, and practices by which the international community as a whole seeks to manage its common affairs.

Are America and global governance on a collision course? If so, how did that come to be? And what are the consequences—for the U.S. and for the rest of the world?

The author has two aims in this paper. First is to place the resurgence of American doctrinal unilateralism into its historical and conceptual contexts, in the hope that doing so will help us to understand it better. Second is to argue that, despite the vast power asymmetries that exist between the United States and the rest of the world, especially in the military realm, it is not as easy as it may seem at first blush for the U.S. to sustain such a unilateralist posture today. One major reason, ironically, is the success of America’s own post-World War II strategy of creating an integrated global order, inhabited by a diversity of state and non-state actors, and based on the animating principles, if not always the practice, of democracy, the rule of law, and multilateralism. Thus, the United States is locked in a struggle today not only with its allies and other states, but also with the results of its own creation—and, thus, with its own sense of self as a nation. This paper is forthcoming in Forsythe, David P., Patrice C. McMahon, and Andrew Wedeman, Eds. American Foreign Policy in a Globalized World. New York: Routledge.

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The Logic of Collaborative Governance:

Corporate Responsibility, Accountability, and the Social Contract

Simon Zadek Senior Fellow, Corporate Social Responsibility Initiative


January 2006, CSRI Working Paper No. 17 Emerging collaborative arrangements between public and private institutions provide the potential for novel ways for enhancing the provision of public goods. This potential is framed by organizations’ willingness and ability to participate in such arrangements. Business engagement is a particular challenge given business’ distinct societal mandate to create private economic gain. The basis of business accountability establishes the logic of business’ terms and interests, and therefore its participation in such collaboration. This basis of accountability is, however, in constant flux. “Corporate responsibility” is proposed here as the ongoing negotiation and realignment of this basis, which in turn is driven by the micro-dynamics of business competition, risk management, and reputation. This dynamic is described in terms of the interaction between micro, business-level learning and macro, societal learning. The potential for “collaborative governance”—the process by which multiple actors, including public and private institutions, come together and develop, implement, and oversee rules, providing long-term solutions to pervasive challenges—depends on the pace and direction of such learning.

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Game Changing CSR

Mark Kramer Senior Fellow, Corporate Social Responsibility Initiative

John F. Kennedy School of Government, Harvard University Managing Director, Foundation Strategy Group

John Kania

Managing Director, Foundation Strategy Group

February 2006, CSRI Working Paper No. 18

At the nexus between corporations and the nonprofit sector lies a Faustian bargain: Corporations provide money without demanding that social problems be solved, and nonprofits honor corporations for their generosity, without interfering in their business. What if the rules of this game could be changed, so that corporations engaged their enormous capacity to lead social progress directly? In this paper we propose the idea of “game changing CSR” which would establish new roles for business and nonprofits. Game changing CSR would require business to abandon its defensive and cosmetic approach to social issues, exploiting its full capabilities to find and implement solutions to social problems, even problems it had nothing to do with creating. And nonprofits would have to be willing to share their “halo” by accepting business as an ally rather than an opponent and welcoming its enormous capacity to solve social problems. It will not be easy for nonprofits or businesses to adopt these new roles, but the benefits that will accrue to society if they can do this will be immense. This single shift could stimulate greater progress than has ever before been seen in overcoming the world’s most intractable problems. A subsequent version of this paper has been published by the Stanford Social Innovation Review. The citation is: Kramer, Mark and John Kania. 2006. “Changing the Game: Leading Corporation Switch from Defense to Offense in Solving Global Problems.” Stanford Social Innovation Review. Spring: 22-29.

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Business Ethics: The Law of Rules

Michael L. Michael

Senior Fellow Mossavar-Rahmani Center for Business and Government


Despite the recent rash of corporate scandals and the resulting rush to address the problem by adding more laws and regulations, seemingly little attention has been paid to how the nature (not the substance) of rules may or may not affect ethical decision-making. Drawing on work in the law, ethics, management, psychology, and other social sciences, this paper explores how several characteristics of rules may interfere with the process of reaching and implementing ethical decisions. Such a relationship would have practical implications for regulatory policy and managers of organizations, and the paper concludes by suggesting how regulations and corporate ethics programs should be able to improve the ethical culture of business and enhance the ethical decision-making skills of employees. A version of this paper is forthcoming in 16-4 Business Ethics Quarterly (Oct. 2006).

35

Investing in Social Innovation: Harnessing the Potential of Partnerships Between Corporations and Social Entrepreneurs

Jane Nelson


Harvard University

Beth Jenkins Senior Consultant, Booz Allen Hamilton


The growth in corporate responsibility and social entrepreneurship represents two of the most interesting social trends of the past decade. Around the world there is increased awareness of the potential to harness the core competencies, assets, and resources of corporations in helping to find new solutions to complex social and environmental problems. At the same time, there has been a dramatic growth in awareness of, and support for, the crucial leadership role played by social entrepreneurs: individuals who apply innovative, entrepreneurial, performance-driven, and scalable approaches to solving societal problems and who often act as bridge-builders between different sectors, communities, institutions, and cultures. Yet, with a few notable exceptions, relatively little analysis has been done on the linkages between these two trends and between the corporate leaders and social entrepreneurs that drive them. This is particularly the case in developing countries where there are both enormous development needs and great opportunities for increasing engagement between corporations and social entrepreneurs. This paper looks at some of the innovative alliances that already exist between large corporations and social enterprises in both developed and developing countries. It suggests a conceptual framework for thinking about the different ways companies can support social entrepreneurship focusing on: a company’s core business operations in the workplace, marketplace, and along the value chain; its social investment and strategic philanthropy activities; and its engagement in public policy dialogue, advocacy, and institution building. The paper outlines the business case for how such alliances can help companies meet their business goals and support their corporate values. And it offers a set of recommendations for business leaders, social entrepreneurs, foundations, and governments on how they can work together to increase the scale and effectiveness of these alliances for mutual benefit.

36

Uncommon Partners:

The Power of Foundation and Corporation Collaboration

Mark Kramer Senior Fellow, Corporation Social Responsibility Initiative

John F. Kennedy School of Government, Harvard University Managing Director, FSG

Marc Pfitzer

Managing Director and Head, FSG European Practice

Karin Jestin Senior Consultant, FSG


In this paper, the authors argue that deliberately leveraging the combined capabilities of foundations and corporations will enable far more powerful solutions to social problems than either sector could achieve independently. They identify three basic approaches to corporation-foundation partnerships that create significant social impact. First, foundations can use their financial resources to overcome market failures through smart subsidies that facilitate corporate investments in new business models that fulfill social and environmental goals but would not otherwise be financially attractive for the company. Second, corporations can contribute their specialized expertise, assets, and geographic reach to social initiatives in ways that complement the expertise and financial support provided by foundations. Third, foundations and corporations can use their separate spheres of influence and credibility to bring disparate groups together, influence public policy, or stimulate greater transparency and accountability. The authors discuss these three approaches in detail and offer examples. They also consider the numerous barriers stand in the way of more frequent collaboration between foundations and corporations, including adversarial attitudes, organizational culture, institutional goals and priorities, diversity of players, organizational lack of transparency and bureaucracy, and changes in leadership and market conditions. At times, the interests of corporations and foundations may be opposed, but, in situations where they are aligned, the ability to bring constituencies together is a uniquely powerful aspect of cross-sector partnerships. Together, corporations and foundations have the knowledge, research capacity, independence, resources, networks, and communication channels to influence governments and break through established norms or ingrained behaviors. This paper represents the work of three organizations: the World Economic Forum, the Corporate Social Responsibility Initiative, and FSG. It was presented at the Meeting of Independent Foundation and Corporate Executives, World Economic Forum, Geneva, Switzerland, September 29-30, 2005.

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Leveraging the Development Impact of Business in the Fight Against Global Poverty

Jane Nelson


Harvard University

April 2006, CSRI Working Paper No. 22

There is growing consensus among policy makers, development experts, and private sector leaders that efforts to spread economic opportunity and growth offer one of our best hopes for reducing poverty. The private sector—domestic and foreign, large-scale and small—has a vital role to play in this process and in ensuring that both the quantity and quality of economic growth benefits the poor. Efficient markets and good governance, at both the global and national level, are essential conditions for enabling the private sector to fulfill this potential. So, too, is profitable and responsible business leadership based on clear values and a commitment to delivering, or at a minimum protecting, both market value and social value. This paper illustrates some of the ways that companies are meeting the leadership challenge through implementing responsible business practices; creating innovative new business models, investment strategies, and partnerships; and working with governments to improve the conditions and institutions needed for good governance and private sector development.

This paper was written for the Brookings Blum Roundtable, “The Private Sector in the Fight Against Global Poverty,” held in Aspen, Colorado, in August 2005. An adapted version of this paper is forthcoming as a chapter in Transforming the Development Landscape: The Role of the Private Sector, edited by Lael Brainard. Washington, DC: Brookings Institution Press.

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Governing Collaborative Governance: Enhancing Development Outcomes by Improving Partnership Governance and Accountability

Simon Zadek

Senior Fellow, Corporate Social Responsibility Initiative John F. Kennedy School of Government, Harvard University

Sasha Radovich

Senior Advisor, AccountAbility


Partnerships involving public and private actors are becoming the single most important institutional pathway for international development and the delivery of public goods. Partnerships are important across three domains: in the direct delivery of public services and infrastructure; in effecting increasingly large, trans-border public resource transfers; and in developing and stewarding new rules for market and non-market actors. In practice, these historically distinct functional domains are converging, creating a generation of hybrid partnerships that blend delivery, transfer, and rule-setting functions. The basis of accountability of such partnerships, and the realization of accountability through governance design and practice, will determine the orientation and legitimacy of partnerships, and ultimately their performance. This is particularly true for partnerships that are pathways and increasingly arbiters of the allocation of public resources, but also the case where they are de facto stewards of public goods, whether through commercial contract or as standard setters. The governance and accountability of such partnerships raise specific challenges, as well as those more familiar to traditions and practices in the corporate community and the public sector. Notable is the need to shape relationships between organizations with highly diverse philosophies, rules, and practices governing their own governance and accountability. Furthermore, most partnerships are essentially transitory, requiring on-going negotiation between partners to secure their continuity. A framework is proposed to guide the governance and accountability of such partnerships, the first of its kind. The “PGA Framework” has been developed and tested over two years with numerous partnerships and experts, and provides a sound foundation for advancing a more systematized approach to the effective governance and accountability of multistakeholder partnerships in the future.

39

Selected Works of Interest

by Harvard University Faculty

41

Environmental Protection and the Social Responsibility of Firms: Perspectives from Law, Economics, and Business

Resources for the Future Press, 2005

Edited by: Bruce L. Hay

Professor of Law, Harvard Law School

Robert N. Stavins Albert Pratt Professor of Business and Government

John F. Kennedy School of Government

Richard H. K. Vietor Senator John Heinz Professor of Environmental Management

Harvard Graduate School of Business Management

Everyone agrees that firms should obey the law. But beyond bare compliance with regulations, do firms have additional social responsibilities to commit resources voluntarily to environmental protection? How should we think about firms sacrificing profits in the social interest? May they do so within the scope of their fiduciary responsibilities to their shareholders? Is the practice sustainable, or will the competitive marketplace render such efforts and their impacts transient at best? Furthermore, is the practice, however well intended, an efficient use of social and economic resources? And do some firms already behave this way? Faculty members Hay, Stavins, and Vietor have edited Environmental Protection and the Social Responsibility of Firms to answer these questions. In it some of the nation’s leading scholars in law, economics, and business examine commonly accepted assumptions at the heart of current debates on corporate social responsibility and provide a foundation for future research and policymaking.

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Up to Code: Does Your Company’s Conduct Meet World-Class Standards?

Harvard Business Review 83(12) December 2005

Lynn Paine John G. McLean Professor of Business Administration

Rohit Deshpandé

Sebastian S. Kresge Professor of Marketing

Joshua D. Margolis Associate Professor, Harvard Business School

Kim Eric Bettcher

Research Associate, Harvard Business School .

Codes of conduct have long been a feature of corporate life. Today, they are arguably a legal necessity. In this article, a team of researchers from Harvard Business School presents findings from an analysis of a selected set of widely recognized conduct guidelines for multinational companies. After drawing out important similarities and differences, they define eight underlying ethical principles common to each of these codes. The common principles address fiduciary responsibility, property rights, reliability, transparency, dignity, fairness, citizenship, and responsiveness. The authors combine these principles and their associated standards of conduct into “The Global Business Standards Codex,” a reference that companies can use to assess their current code or develop a new one.

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Leverage: Public Goals, Private Roles

A forthcoming book produced under the aegis

of the Weil Program on Collaborative Governance, MR-CBG

John D. Donahue Raymond Vernon Lecturer in Public Policy

Director, Weil Program

Richard J. Zeckhauser Frank Plumpton Ramsey Professor of Political Economy

John F. Kennedy School of Government Harvard University

Government is doing less of its work on its own, and more through collaboration. Governments have long sought to leverage their own capacity by working with people and organizations from beyond the public sector, of course. But the scale has changed. Half a century ago direct government action – through public employees, working public organizations, under the direction of public managers – was standard practice. Private players were often involved, but their roles were limited and subordinate. Today the accomplishment of many, and perhaps most, important public missions depends on private for-profit and non-profit organizations. The form and complexity of interaction has also changed. From a short and simple list of the roles a private organization could play in its dealings with government – constituent, contractor, taxpayer, grantee, advisor – the repertoire of potential roles has grown richer, more sophisticated, more confusing. These parallel increases in the importance and complexity of private roles mean that orchestrating collaboration, not managing agencies, is becoming the core job for many top officials in the public sector. Good government used to require running bureaucracies efficiently and accountably. Now, to a large and growing extent, it requires knowing how to capitalize on private capacity. The criteria of efficiency and accountability stay the same, but the skills required to attain them change with the shift from direct to indirect action. The point of this book is not to trumpet the discovery of some heretofore hidden trend; it's no secret that government is changing. Instead, the authors’ goals are, first, to lay out some general concepts that are useful for understanding leverage across a range of settings and, second, to suggest some ways (anchored in theory, but presented pragmatically) for harvesting the benefits and limiting the risks of private roles in public missions.

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