Voluntary “multi-stakeholder” programs have been a prominent feature of the corporate responsibility landscape for more than a decade. Launched by companies, industry groups, NGOs, governments and international organizations, programs like the UN Global Compact, the Voluntary Principles on Security and Human Rights, and the Fair Labor Association, bring together diverse actors to tackle common problems on the corporate responsibility agenda: human rights, labor standards, environmental standards, and transparency. Many of these pioneering efforts established best practices for subsequent multi-stakeholder collaborations.
But as the corporate responsibility field matures, many of these multi-stakeholder programs are struggling to remain relevant. Initial successes have been followed by substantial challenges. Stakeholders are questioning programs over the scope of their mandates, participation levels, and accountability and governance mechanisms. Some multi-stakeholder efforts face credibility and sustainability concerns with the potential to scuttle the programs altogether.
In a brief article in the current issue of the Stanford Social Innovation Review, I describe the challenges facing one of the pioneering programs, the Soccer Ball Project, a multi-stakeholder effort that has substantially eliminated child labor in one industry in one location, but is struggling to expand its mandate beyond child labor to address all core labor rights. I had the opportunity to see the Project up close last year as an independent corporate responsibility expert invited by the ILO to engage Project stakeholders on ways to strengthen the effort. Concerns over the Project’s credibility and sustainability led Project stakeholders to forge the Sialkot Initiative, a set of priorities for expanding the scope of the project beyond child labor; promoting dialogue among employers, workers and government; strengthening government labor inspections; increasing economic opportunities for women; and strengthening the Program’s governance and monitoring. It remains to be seen whether Project stakeholders can successfully implement the Initiative and expand the Project.
A few simple, hopefully common-sensical, lessons emerge for professionals seeking to strengthen voluntary multi-stakeholder programs as they mature, or for stakeholders considering new partnerships.
Like investments for which past performance is no guarantee of future returns, corporate responsibility efforts cannot rely on initial successes to sustain themselves. To keep a program relevant, stakeholders should periodically ask themselves, and each other, three questions:
1. How have stakeholder expectations changed?
Meeting stakeholder expectations is the essence of corporate responsibility.
Most of the concerns surrounding the Soccer Ball Project can be traced to stakeholder expectations that have changed in the decade since the Program launched.
Multi-stakeholder initiatives can address changing expectations by raising performance standards and by adopting emerging best practices. Two prominent efforts – the United Nations Global Compact and the Voluntary Principles on Security and Human Rights – for example, responded to calls for greater accountability by strengthening program governance. In 2007, the Voluntary Principles adopted formal participation criteria. This year, the Global Compact began to delist companies that have failed to submit a “communication on progress.” Both of these changes seek to meet stakeholder expectations for greater accountability.
2. How have roles/responsibilities shifted?
And does the program account for new roles and responsibilities? As stakeholders needs shift over time, their roles and responsibilities may need to change accordingly. Stakeholders with the greatest incentives for participation typically assume leadership roles in multi-stakeholder programs early on, but often do not view themselves in the same role for the long-term. A common issue for many voluntary corporate responsibility programs today, for example, is the expectation that governments begin to reassert themselves with the capacity and responsibility to enforce minimum standards, a trend highlighted by Professor John Ruggie’s business and human rights recommendations to the United Nations.
3. What is the business and social impact?
Perhaps the best way to sustain a voluntary multi-stakeholder initiative is to demonstrate, over time, a measurable business and social impact for everyone involved.
First generation corporate responsibility efforts focused almost exclusively on standard-setting and compliance. Meeting minimum standards and eliminating abuses satisfied most stakeholders. Today, the bar for measurable improvements is rising. Stakeholders increasingly expect corporate responsibility efforts to drive meaningful social change and address the root causes of inadequate compliance. Companies are seeking to make corporate responsibility efforts a competitive advantage closely linked to core business strategy.
Members of the Fair Labor Association, for example, are developing and testing a new integrated approach to supply chain management that seeks to move beyond monitoring and deliver a more sustainable social and business impact.
The multi-stakeholder programs that ask these questions, find the right answers, and adapt accordingly, will survive and continue to move the corporate responsibility field forward. Their efforts will shape the corporate responsibility agenda for the next decade.