Governmentality and the politics of CSR

Abstract

In this article we argue that an analytics of governmentality has an important contribution to make to the study of governmental approaches to corporate social responsibility (CSR). Looking at developments within the EU, we see government emerging as an enabling and empowering facilitator that a) promotes a strategic understanding of CSR as a lever for economic competitiveness and growth and b) disregards regulatory measures in favour of liberal and indirect means of steering. We argue that the analytical vocabulary of governmentality makes it possible to address and problematize the indirect modes of power and governing that are prevalent in governmental approaches to CSR in general and in neoliberal modes of CSR governance in particular. Using EU and member states policy developments as an empirical backdrop, we provide a conceptual exploration of the prospects of applying governmentality to the study of the changing roles of government in CSR. We position our contribution within the critical literature on CSR as a political phenomenon.

The universe of corporate social responsibility (CSR) is expanding, not only in terms of the mass, scope and diversity of corporate activity but also in terms of scholarly endeavour. Recent years have seen a surge of research contributions exploring CSR as a social and political phenomenon in the broadest sense. As a result, CSR can no longer be pigeonholed as a moral-philosophical discourse providing an ethical counterpoint to neo-classical economic theory and profit-driven forms of business economics. The meaning, significance and practical impact of CSR in areas such as environmental management and sustainability reporting, worker’s rights and welfare, human rights and anti-corruption, is dissected by researchers covering a wide array of academic disciplines, including organization studies (Crouch, 2006), management studies (Lockett et al., 2006), communication studies (Morsing and Schultz, 2006), political science (Steurer, 2010), law (McBarnett et al., 2009), sociology (Matten and Moon, 2008), anthropology (Sharp, 2006), development studies (Utting, 2007), international relations (Blowfield, 2005) and post-colonialism (Banerjee 2007)—along with, increasingly, subfields within mainstream business economics (Smith and Lenssen, 2009). As a result, CSR is emerging not only as a lofty ideal, but as a socially embedded and diverse organizational practice that engages a variety of corporate stakeholders and is affected by a variety of societal forces. In this article we are concerned with one of the most significant of these social forces as we focus on the role of government in the ongoing social creation of the ‘CSR’ phenomenon. We contribute to a politically enlarged conceptualization of CSR (Matten and Crane, 2005; Scherer and Palazzo, 2007, 2011) by exploring how CSR is, indeed, becoming the business of government.

Government is often considered as ‘the regulatory other’ of CSR, a powerful force that establishes ‘the rules of the game’ and, if only in the most general sense, determines what can be located inside and what falls outside the domain of CSR. Although CSR, in this particular sense, cannot be viewed in isolation from government (Moon andVogel, 2008), the two are often considered as separate and distinct affairs. Government operates in the realm of public policy, whereas CSR is most often defined from the corporate point of view and used to designate a field of voluntary corporate activity (Carroll, 1999). However, recent developments in governmental approaches to CSR blur the boundary between the public and the private and the voluntary and the mandatory. Looking at developments within the EU, we find government promoting and providing templates for development in CSR while simultaneously upholding and even praising its voluntary nature. As a result, the role of government in regard to CSR can no longer be adequately captured by a language of rules and regulations and their necessary corporate and semantic counterpart: compliance. Even when government, and thus the state, is actively involved, the governing of CSR is to a large extent taking place in networks that transcend the confines of regulatory or legislative command and control. The term New Governance has been used to capture this development (Lepoutre et al., 2007). Indeed, Conley and Williams (2007) consider the CSR movement an experiment in New Governance that is closely related to the coming of the post-regulatory state (see also Scott, 2004).

Governmental concerns with and the eagerness to address CSR has, over the last decade, been reflected in a stream of notable EU policy documents (European Commission, 2001, 2002, 2006) and in a plethora of national, regional and local policies and programs aiming to promote CSR to businesses big and small (Habisch et al., 2005; Lozano et al., 2007). We propose that one of the most important drivers (if not the most important driver) of this activity is the emergence of a new and seductive ‘truth’ about CSR, namely that it is good for business and good for the economy. CSR is increasingly considered a strategic advantage and therefore a lever for economic growth and competitiveness (Porter and Kramer, 2006, 2011). The preferred language is one of economic policy (which is distinct from the social policy language that was dominant throughout the 1990s), and the message from government is that businesses should engage in CSR to do well rather than good (Vogel, 2005). Prior to the emergence of the competitiveness agenda, government intervention in CSR would routinely be associated with undue and potentially harmful interference imposing additional costs on business. But now government increasingly works to help private companies identify/create and act upon strategic opportunities in their environment—not to put social or environmental restraints on them, and this is, we argue, indicative of emerging neoliberal tendencies in governmental approaches to CSR (Shamir, 2008).

Keeping in mind the voluntary nature of CSR, we are, paradoxically, seeing government operate inside the sphere of corporate self-determination, and this can be accomplished only through liberal and indirect means of steering. Government assumes the role of an enabling and empowering facilitator of CSR, not a regulatory enforcer. Up to now, the CSR-literature has certainly considered government to be a significant stakeholder, but mostly in the negative sense of representing an outside threat of regulation. Now, we also have to take account of government as a positive force seeking to push developments further—without the use or threat of regulation as its primary modus operandi. We will explore what happens to government—and to CSR—in the process of a language of restraint and social obligation being replaced or supplemented by one of opportunity and business strategy with enabling government becoming a preferred mode of action. The questions we ask are as follows: how can we address and problematize the liberal and indirect modes of steering that characterize modern CSR governance? And how can we provide an understanding of the governmentalization of CSR and competitiveness that is at the same time critical and constructive? By constructive critique we mean an approach that is concerned about the implications of neoliberalism in governmental approaches to CSR, but not radically opposed to this event in the sense that it is open to the possibility that it may have positive effects in terms of making CSR more widespread.

Answers are, we propose, to be found in an analytics of governmentality (Foucault, 1978a, 2008; see also Burchell et al., 1991; Dean, 1999, 2010; Rose, 1999). Governmentality studies build on Michel Foucault’s groundbreaking work on power and rule in modern society (Foucault, 1977, 1978b; Rabinow, 1994) and specialize in exploring the often subtle and intricate mechanisms of liberal and indirect means of steering. That is, modes of governing which aim to shape the economic and social conduct of, in this case, business without shattering its formally distinct and autonomous character (Miller and Rose, 1990), and thus ‘acts on the governed as a locus of action and freedom’ (Dean, 1999: 15). With Foucault and governmentality we will be able to provide a fresh perspective on notions of freedom, power and subjectivity in the realm of CSR. In a Foucauldian perspective enabling government signifies an absence of force (regulation), but not an absence of power. It not only constitutes a form of self-limitation, but also a form of self-extension as government engages in a variety of disciplinary efforts to affect and direct corporate mindsets and provide guidance about CSR. We will show how the study of modern governmental approaches to CSR calls for a differentiated understanding of the politics of CSR and alertness to the different political rationalities that CSR is subjected to by government. On terminology: we will use the term ‘government’ to designate the institution of government as opposed to the broader and more inclusive meaning suggested by Foucault (2008) and governmentality studies (Burchell et al., 1991)—our analytical focus being the role of government(al bodies) in the governing of CSR. We will use the term ‘governance’ to designate the broader field of networked governing practices, where power is diffused and boundaries between public, private and voluntary sectors are shifting and becoming opaque (Rhodes, 2007). We are thus making a distinction between governance as (empirical) practice and governance as (theoretical) discourse. We are using the concepts and vocabulary of governmentality to better understand the former and provide a critical corrective to the latter.

First, we discuss the general prospects of our contribution and position it within the emerging critical and political discourse on CSR—using it as an occasion to reflect on the very notion of critique in CSR and discuss localizing and globalizing tendencies in political approaches to CSR. Second, we turn to the Foucauldian notions of power and government that sustain governmentality studies and argue for their relevance and value in illuminating CSR as a political phenomenon. Third, we propose a multi-level framework for analysing the governmentalities of CSR. Here, we emphasize the usefulness of the distinction provided by Rose and Miller (1992) between government as it is expressed in political rationalities and governmental programmes and technologies. We use examples from EU policy documents and programmes as well as member state policies and programs as an empirical backdrop for our argument. We do not, however, provide a full-blown empirical analysis of governmental developments in the field. As Dean (2010) argues, the study of governmentality not only indicates an empirical terrain ‘because studying governmentality is also about the production of new concepts in the course of that study, or in the course of using other scholars’ study’ (p. 13). In all, our ambition is to present an explorative conceptual outline and reflection that can provide input for future empirical studies.

An expanding critical discourse of CSR

Blowfield (2005) has suggested that CSR as a discipline ‘has yet to develop the means for internal critique, and as a result is unable to recognize its own assumptions, prejudices and limitations’ (p. 173). We argue, however, that recent years have seen the discourse of CSR expanding. It is increasingly becoming self-critical and self-reflective (see Banerjee 2007). Criticism in CSR is no longer primarily a matter of engaging with external opponents—Milton Friedman and others—that are refuting the very idea of CSR. It is also a matter of challenging, internally, the notion of CSR itself, exposing the shortcomings of the knowledge that has been amassed in the field and coming up with new ways of construing and analysing corporate responsibilities. Part of the expansion has been the inclusion of continental ethical and social thought in the analytical palette, as exemplified by contributions drawing on the thinking of Levinas (Roberts, 2003), Derrida (Jones, 2003), Habermas (Scherer and Palazzo, 2007) and Foucault (Shamir, 2008). And one way to perform a critical expansion of the discourse is to consider CSR as a political phenomenon (Matten and Crane, 2005; Scherer and Palazzo, 2007, 2011; Vallentin, 2009, 2010).

Importantly, this is, in our view, not a matter of rendering CSR as such politically suspect, although ideologically tinged critical commentary on CSR is legion both from the political left and right (May et al., 2007). A recurring theme—of the left—is the failure of advocates and scholars to reflect more thoroughly on the political (as opposed to ethical) nature and implications of CSR and the ideology (as opposed to science) of economic reasoning (Ghoshal, 2005). Hanlon (2008) has suggested that the field of CSR is characterized by a denial of politics. He challenges the notion that CSR is in conflict with ‘traditional’ business practice and is somehow reflective of leftist ideology. In contrast, he argues, ‘CSR does not represent a challenge to business’ but rather ‘a further embedding of capitalist social relations and a deeper opening up of social life to the dictates of the market place’ (p. 157). Banerjee (2007) considers CSR as part of an ideological movement that is intended to legitimize the power of large corporations, and Shamir (2008) proposes that the discourse and practice of business and morality is, across the board, grounded in a neoliberal epistemology that dissolves the distinction between economy and society with ‘the social’ being encoded as a specific instance of ‘the economy’.

However, we want to approach the politics of CSR as an empirical rather than a principled ideological matter (which is to say that we will approach neoliberalism as a concrete empirical event, not as the a priori given rationality of the governmental CSR discourse in total). To provide a political understanding of CSR is, in our view, a matter of producing politically embedded accounts. Two research directions are, in particular, supporting this aim. One is concerned with the institutional underpinnings of CSR and represents a localizing (or nationalizing) tendency, whereas the other is concerned with the political constitution of CSR and represents a globalizing tendency.

Matten and Moon (2008) have provided a pivotal contribution to the first stream. They provide a comparative analysis of CSR that emphasizes institutional differences between the United States and Europe. Using insights from national business systems (Whitley, 1999) and varieties of capitalism (Hall and Soskice, 2001) literature along with new institutional theory (Greenwood et al., 2008; Powell and DiMaggio, 1991), their critical contribution consists in challenging generic conceptions of CSR and broadening the scope of how we may speak of CSR as a socially embedded phenomenon (Matten and Moon, 2008—see also Aguilera et al., 2007; Campbell, 2007; Jackson and Apostolakou, 2010; Wry, 2009). Matten and Moon distinguish between ‘explicit CSR’ and ‘implicit CSR’ and associate these forms with, respectively, an American and a European approach to CSR. Explicit CSR refers to ‘corporate policies that assume and articulate responsibility for some societal interest’ (2008: 409) and is seen as a reflection of a liberal market economy and national institutions encouraging individualism and discretionary agency. Whereas implicit CSR refers to the role of companies ‘within the wider formal and informal institutions for society’s interests and concerns’ (Matten and Moon, 2008: 409) and is considered a reflection of a coordinated market economy and national institutions favouring collectivism and obligatory agency. The important step of Matten and Moon is to show that the nature of CSR is, among other factors, contingent upon the historical development of different political systems and practices (see also Detomasi, 2008, who argues for the need to search for the political roots of CSR in domestic institutional and political structures). Particularly in Europe we have to understand CSR as an embedded, relational and collaborative accomplishment that involves a blurring of boundaries between private, public and civil spheres. Among other factors, this makes it imperative to take account of government and how it is emerging as an active promoter of explicit CSR (Steurer, 2010). According to Williams and Aguilera (2008), governmental efforts to encourage CSR can be uniquely powerful not because they are immediately translated into action but because they affect social expectations about what is considered appropriate corporate behaviour and can serve as focal points around which firms can structure their policies and actions:

the laws and policies that governments enact send a strong signal about the importance of a subject—a signal that, as regards CSR, is amplified by the business culture in the country, consumers’ interests, institutional investors’ actions, the corporate governance regime, NGOs’ effectiveness, and the individualistic versus collectivist nature of the country’s underlying political and social philosophy. (2008: 454)

While institutional theory and comparative studies are providing politically embedded accounts of CSR, a simultaneous political re-embedding is taking place in research that emphasizes the global aspects of corporate responsibility and accountability (Detomasi, 2007; Matten and Crane, 2005). Scherer and Palazzo (2007) have made a significant normative contribution to this stream that makes use of the democratic theory of critical social thinker Jürgen Habermas (1996). As Kuhn and Deetz (2008) argue, critical approaches need not be engulfed in a ‘discourse of suspicion’. They can look for places of hope instead of engaging in the almost inevitable cynicism of ideology critique. Scherer and Palazzo place their hope in Habermas’ theory of deliberative democracy on which they build a political conception of CSR. Their aim is to embed ‘corporate decision making in processes of democratic will formation. These processes, driven by civil society actors and spanning a broad field of public arenas, establish a democratic control on the public use of corporate power’ (Scherer and Palazzo, 2007: 1109). In a later article, they argue that the Westphalian system of nation-states is losing regulatory power as economic relations and transactions are expanding beyond the reaches of territorially bound jurisdictions (Scherer and Palazzo, 2011). Globalization involves a process of deterritorialization (Scholte, 2005), and therefore we must now speak of an emerging post-Westphalian world order (Falk, 2002) or post-national constellation (Habermas, 2001). As a consequence, it is no longer adequate to theorize CSR within the confines of the nation-state and to consider the nation-state as a proper legal and moral point of reference. Thus, Scherer and Palazzo argue that we must redirect our concerns from national to global governance, from hard law to soft law, from liability to social connectedness, from cognitive or pragmatic legitimacy to moral legitimacy, and from liberal to deliberative democracy (2011).

In this article, we seek a middle-ground between localizing and globalizing perspectives on the politics of CSR. On the one hand, we emphasize the continued significance of nation-state and Pan-European (as opposed to global) politics. Although CSR is undeniably a global concern involving a variety of issues that transcend geo-political boundaries, and although we can speak of an emerging global governance in the field (with the proliferation of UN Global Compact, Global Reporting Initiative, ISO 26000 and other standardized guidelines and tools), we will argue that the EU trajectory must be considered an instance of global problems finding, i.e. being translated into, local solutions and strategies. We can speak here of a glocalization (Robertson, 1995) of CSR at the public policy level. On the other hand, our focus on public policy does not lead to a preoccupation with formal rules and hard law and thus government regulation in a conventional, hierarchical sense (Scherer and Palazzo, 2011). Our point being that the post-regulatory state makes use of many of the same, ‘softer’ modes of governing that are usually associated with global governance and civil regulation (Vogel, 2010; Zadek, 2007). Next, we will explore ‘the art of government’ (Foucault, 1978a) as it relates to CSR more in-depth.

CSR, governmentality and governance

As Lepoutre et al. (2007) argue, most studies addressing the role of government have focused on the policy instruments that national or supranational governments can use in the context of CSR, while neglecting or even rejecting its conception as a voluntary effort—thus considering business as a subject of regulation rather than a mode of governance in its own right (Blowfield, 2005). Gond et al. (2011) has pointed out that ‘the government-CSR relationship is counter-intuitive to many, and therefore remains largely overlooked, particularly in theoretical and conceptual terms’ (p. 4). In recent years we have, however, seen an increasing amount of research addressing the role of government in CSR (Habisch et al., 2005; Lozano et al., 2007) and how it involves governing through self- or co-regulation (Gond et al., 2011; Steurer, 2010—see also Teubner, 2011, on linkages between public and private corporate codes).

Whereas most prior studies have failed to address the inherent paradox and the tensions, intricacies and subtleties involved when government operates inside the sphere of corporate self-determination, we strongly emphasize the mechanics of indirect means of steering. This follows from the Foucauldian notions of power and government that define the field of governmentality and sustain governmentality studies. Hence, Foucault understands power as a productive force that transcends the repressive function of law. Power is technical and positive, not juridical and negative (Foucault, 1980b). It is ‘exercised rather than possessed’ (Foucault, 1977: 26), and we must therefore speak of it in terms of power relations (Foucault, 1982). Importantly, such relations are constituted by an element of freedom. Power is different from physical force or violence, it can only be exercised over free individual or collective subjects that have some means of escape or possible flight at their disposal. Power is thus ‘a mode of action that does not act directly and immediately on others’ (Foucault, 1982: 340). It designates ‘a field of possibilities in which several kinds of conduct, several ways of reacting and modes of behavior are available’ (Foucault, 1982: 342). It is ‘a way of acting upon one or more acting subjects by virtue of their acting or being capable of action. A set of actions upon other actions’ (Foucault, 1982: 341).

Governing thus has to be understood as a conduct of conduct: a form of conduct that relates to how others conduct themselves (Foucault, 1978a, 2008). It consists not in determining how others should act, but in structuring the possible field of action of others (Foucault, 1982). Such structuring efforts are by no means monopolized by government in lieu of the state. Indeed, ‘[g]overnmentality is not about the institutional power of states, rather it is a relational and discursive power that permeates society and directs social arrangements and informs juridical, legislative and democratic institutions’ (Banerjee, 2007: 140). Governmentality points to an open field of governing practices, a ‘loose assemblage of agents, calculations, techniques, images and commodities’ (Rose and Miller, 1992: 201), that involves a host of non-state actors and intermediaries, including non-governmental organizations (NGOs), industry and trade, businesses, experts and citizens (Barry, 2004). Within this assemblage it is, however, still possible to discern the roles of government(al bodies) and how they operate, often through the use of networked, liberal and indirect modes of governing that transcend instruments of command and control.

Putting aside conventional notions of political authority and control, governmentality studies have a keen eye for the intricacies of liberal modes of steering that are driven by a desire to ‘govern at a distance’ (cf. Latour, 1986), and which are concerned with creating subjects ‘who do not need to be governed by others, but will govern themselves, master themselves, care for themselves’ (Rose, 1996: 45). Power in the Foucauldian sense can result in ‘empowerment’, ‘individuation’ or ‘responsibilization’ of subjects (Shamir, 2008; Swyngedouw, 2005)—as autonomous agents that are encouraged to self-govern and set targets and standards for their social performance through ‘an unforced application of certain values rooted in the motivation for action’ (Thompson, 2007: 2).

We must then understand the governance of CSR—as it is reflected in public codes and policies (Teubner, 2011)—as actions on the actions of private companies to behave responsibly. It is, to iterate, a form of conduct—or conducting—that relates to how others conduct themselves. This is reflected in communications from the European Commission acknowledging that ‘enterprises are the primary actors in CSR’ (2006: 2), and that

[i]n principle, adopting CSR is clearly a matter for enterprises themselves, which is dynamically shaped in interaction between them and their stakeholders. Nevertheless, as there is evidence suggesting that CSR creates value for society by contributing to a more sustainable development, there is a role for public authorities in promoting socially and environmentally responsible practices by enterprises. (2002: 7–8).

It is characteristic of EU policy formulations on CSR that they define an active, yet indirect and, indeed, de-centred and restricted role for public authorities. This is exemplified in the final report from the now defunct CSR European Multi-Stakeholder Forum (which was established by the European Commission and operated from 2002–2004), according to which:

public authorities at different levels (EU, national, regional and local) [should] recognize their contribution to driving CSR, alongside others, and in cooperation with stakeholders, assess and strengthen their role in raising awareness of, providing information on, promoting and supporting the take-up, development and innovation of effective CSR, and the development of environmentally and socially responsible products and services. (quoted in de Schutter, 2008: 215)

The role of public authorities is considered on a par with other corporate stakeholders and relevant conduct is defined in terms of communicating and supporting activities only. What emerges—theoretically as well as programmatically—is a networked and polycentric view of CSR governance as a self-organizing form of governing without clear, sovereign authority (Rose, 1999). In methodological terms this means that we, instead of a state-centred a priori, have to ask questions as to how different modes of governance are actually carried out, how they work in multiple ways, and how this or that locale is able to act as a centre (Rose and Miller, 1992), i.e. ‘how different locales are constituted as authoritative and powerful, how different agents are assembled with specific powers, and how different domains are constituted as governable and administrable’ (Dean, 1999: 29).

With Foucault we choose not to emphasize ‘the positive effects of consensus and shared interests’ (Blowfield, 2005) and look instead for political difference. Thus, we aim to provide a critical corrective to the widespread governance discourse on CSR. This has focused on the changing roles of government in enabling and promoting social and environmental practices (Albareda et al., 2007), including public-private partnerships (Nelson and Zadek, 2000), soft policy approaches (Joseph, 2003) and multi-stakeholder dialogue (Fransen and Kolk, 2007). So far, the literature on CSR and governance has generally been guided by normative and/or instrumental concerns. It has made use of a language of best practices and good governance expressing an underlying ethical or democratic rationale. What has been absent, however, is a more elaborate critical reflection on the mindsets and views of CSR that direct and organize activities, their implications in terms of priorities (inclusions and exclusions) and scope of action, and the conflictual aspects of these developments in general.

As Walters (2004) argues, the focus on governance (as opposed to a state-centred fixation on government) nudges political science towards a more relational and associational understanding of power, and effects a shift in analytical focus from structures and institutions to processes and practices of rule. It is, however, mistaken to use governance as a generic category that subsumes the study of politics. The governance discourse does not offer a neutral depiction of politics (Walters, 2004) as it stresses the value of political consensus, mutual accommodation and collective problem solving (Lemke, 2007). It foregrounds considerations of representation, transparency, and accountability while displacing ‘talk of politics as struggle or conflict’ (Walters, 2004: 36). We may therefore speak of the anti-politics of governance—as it (re)defines the political field as ‘a game of assimilation and integration’ and imagines ‘a politics without enemies’, bereft of fundamental antagonisms and domination (Walters, 2004).

Unlike Scherer and Palazzo (2007) who, with Habermas, are arguing for the need to moderate or limit corporate power in order to realize ideals of communicative rationality (offering inclusive democratic procedures as the means to accomplish this), we are, with Foucault, considering power to be omnipresent in social relations (Foucault, 1978b). We are not looking for ways to limit it, but for ways to understand its positive mode of being, and, reflecting the experience of European real politics often being more intent on marketizing than democratizing CSR, we are focusing not on prospects of deliberative democracy but on the role of government in bringing forth and promoting more or less democratic-minded modes of governance. With Foucault we must consider ‘rationality’ not as a reflection of universal or consensual reason but in instrumental and relative terms, ‘examining how forms of rationality inscribe themselves in practices or systems of practices, and what role they play within them’ (Foucault, 1991: 230). ‘Truth’ must be considered as a mode of production that refers not to true utterances (again, in a universal or widely agreed-upon scientific sense), but to the establishment of domains, truth regimes, in which the practice of true and false and the inscription of meaning and value to statements are ordered in particular ways (Foucault, 1980b). And ‘knowledge’ must be considered as a strategic resource (Rabinow, 1994) that is inseparable from power (Foucault, 1980a).

In the literature on CSR and sustainable development the work of Foucault has most often been used to emphasize the discursive nature and interrelatedness of power and knowledge (Livesey, 2002; Luke, 2005; Raman, 2007; Springett, 2003). Apart from applications of governmentality-thinking in regard to CSR as such (Banerjee, 2007; Barry, 2004; Shamir, 2008; Teke, 2011), our approach finds guidance and inspiration in similar analytical efforts unfolding in other, related fields of inquiry. Higgins and Hallström (2007) show how the work of national and international standards bodies must be understood in governmentality terms: apart from their rule-setting institutional function they are discursive modes of governing that operate via networks as carriers of political rationality. Hughes (2001) applies governmentality to ethical trade arguing that this is a way to expand a discourse preoccupied with drivers and best practices in order to come up with more critical ways of evaluating ethical trading initiatives. Traub-Werner (2007) provides an analysis of how the spaces of free trade are produced through neoliberal spatial and political imaging and material practices. Higgins et al. (2008) explore certification in agri-food networks as a mode of, indeed, networked governance that involves a critical interplay between public policy and market forces. Power (2003) shows how accounting, far from being reducible to a set of neutral technical devices, is a self-validating and self-reproducing mode of governing that ‘shapes preferences, organizational routines and the forms of visibility, which support and give meaning to decision making’ (p. 379). Miller (2001) uses the notion of calculative practices in his depiction of management accounting as a technology of governing. This notion is, in particular, applicable to neoliberal modes of governance, which often define their ends and means in calculated and instrumental terms. Focusing on neoliberalizing tendencies in university reform, Larner and Le Heron (2005) argue that we must look for the constitutive political power of calculative practices such as benchmarking. Rather than being neutral measuring tools, such practices are emerging as governmental techniques that are creating new spaces and subjectivities. These contributions provide additional cues as to what we need to look for in exploring CSR governance: political rationalities and their discursive and material embodiments, along with subjectivities and how they are networked through the use of calculative devices and other techniques.

In our reading, a governmentality perspective does not imply an analytical preoccupation only with the (programmatic) texts on CSR that are produced by governments and other bodies but also a strong focus on the dynamic and polycentric networks through which the governance of CSR actually works and have an effect (Barry et al., 1993; O’Malley et al., 1997). Thus, with governmentality we are arguing for a multi-level analytical design operating interactively on the level of political rationalities and the level of governmental programmes and technologies (Rose, 1999; Rose and Miller, 1992). It is outside the scope of this article to provide an elaborate account of the political process behind EU policy developments on CSR and all the different documents and institutional bodies it has produced and involved (see de Schutter, 2008). Also, space does not allow for a comprehensive survey of all relevant activities (see Lozano et al., 2007) and their associated mindsets. With no ambition of conveying the full range and complexity of policy developments we provide a brief critical exposé of general developments and selected statements and initiatives with a particular emphasis on the emergence of the competitiveness agenda and its implications.

Political rationalization of CSR

We can specify and differentiate political rationalities in terms of the particular languages within which its objects and objectives are construed, and the grammar of analyses and prescriptions they make use of (Miller and Rose, 1990; Rose and Miller, 1992). Although CSR, as Steurer (2010) argues, has emerged as a distinct and coherent policy field in the sense that most initiatives are characterized by (soft law) principles of voluntariness and collaboration and ‘share the purpose of fostering CSR and sustainable development complementary to hard-law regulations’ (p. 51), it is a cross-sectoral field that is marked by divergence as well as convergence. It constitutes ‘a composite reality’ (Foucault, 2008: 109) in which two political rationalities in particular can be discerned.

The first EU level initiatives aimed at promoting CSR date back to 1993 where an appeal was made for the business community to address Europe’s structural problems of unemployment, restructuring and social exclusion (EU, 2009). This set the precedent for the remainder of the decade where social cohesion and inclusive labour markets were top of the agenda. The aim was—and is (in this realm of CSR)—to engage business in solving or alleviating social problems—via public-private partnerships and other employment-related vehicles (Nelson and Zadek, 2000). The language used is one of societal obligations (albeit on a voluntary basis), and the focus on CSR is in large measure reflecting a perceived government deficit (Moon and Vogel, 2008). In 2000, however, CSR was implicitly put at the heart of the Lisbon strategy for 2010, which had as its main goal ‘to make Europe the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion by 2010’ (European Commission, 2009). The EU commitment was made explicit with the publication of the European Commission green paper on CSR in 2001 (European Commission, 2001) and two further communications in 2002 and 2006 (European Commission, 2002, 2006) that all, along with the European Competitiveness report from 2008 (European Commission, 2008), stress the economic and strategic benefits of CSR. The 2002 communication states that the distinguishing feature of ‘today’s understanding of CSR’ compared to ‘the initiatives of the past is the attempt to manage it strategically and to develop instruments for this. It means a business approach, which puts stakeholder expectations and the principle of continuous improvement and innovation at the heart of business strategies (European Commission, 2002: 5.). Although the three pillars of the Lisbon strategy—economic growth, social cohesion and sustainable development—have officially been maintained, the emphasis has shifted towards the former (de Schutter, 2008). The momentum has shifted from social policy to economic policy priorities (Steurer, 2010), and this is reflected in the overall distribution of resources and attention.

Consequently, government is increasingly defining relevant conduct (of conduct) in terms of communicating and supporting activities only or primarily (European Commission, 2006). This is reflected not only in EU policy, but also in national action plans such as the ones presented by the Danish Government (2008) and the German Federal Government (2010) (see below), and in the approach adopted by the Finnish Ministry for Foreign Affairs, according to which ‘the authorities’ role [with regard to corporate responsibility] is limited to encouragement and dissemination of information’ (www.formind.fi). Government emerges as a promoter of explicit CSR that encourages individualism and discretionary agency and relies on the freedom, ingenuity and economic self-interest of businesses as the most important resources for development (as opposed to the collectivist mindset and focus on obligatory agency that characterizes the social policy agenda). CSR thus becomes a means to an economic end both at the corporate (micro) and societal (macro) level. As concluded in the European Competitiveness Report from 2008: ‘There are strong reasons for believing that CSR can have a positive impact on competitiveness at European, national, regional and sector level’ (European Commission, 2008: 119). Such efforts are, however, not just passive reflections of already existing knowledge, but constitute active and creative efforts to produce knowledge and justify and promote a particular ‘truth’ or presumption about CSR, namely that it creates value for business as well as society. This is reflected in the constant search for ‘the business case for CSR’ (European Commission, 2002), i.e. empirical facts that are able to support the fundamental assumption, indeed the constitutive ‘truth’, upon which this discourse rests. Importantly, this ‘truth’ has been exposed to severe criticism in the research literature, where the validity and importance of the business case has been cast in doubt (Gond and Crane, 2010; Margolis and Walsh, 2003; Vogel, 2005). A closer reading of the European Competitiveness Report reveals that it does not lend strong support to the conclusion quoted above, and rather confirms that the effect of CSR on economic performance is highly uncertain. According to Vogel (2010) it is true for virtually all firms that ‘their CSR performance and reputations remain largely irrelevant to their financial performance: They neither improve it nor detract from it’ (p. 82). Even so, there is a political will to promote CSR via the business case as a calculative practice and to engage in efforts to document it (and thus make it true).

Although EU and nation state policies on CSR are making references to transnational guidelines and codes of conduct such as UN Global Compact, the OECD Guidelines for Multinational Enterprises and the ILO Declaration of Fundamental Principles and Rights at Work, they must also be considered as manifestations of glocal strategies seeking to gain competitive advantage. Both the economic rationalization and the translation of global problems and challenges into local solutions and strategies are reflected in the Danish government Action Plan for Corporate Social Responsibility of May 2008 (Danish Government, 2008), which subscribes to ‘business-driven social responsibility’ (p. 5). It applies a Scandinavian blend of neo-corporatism and neoliberalism and presents CSR as a tool that can enable Danish businesses to win advantages on global markets and ‘reap more benefits from being at the global vanguard of corporate social responsibility’ (p. 3). It promotes CSR in order to ‘underpin the goal of making Denmark and Danish businesses internationally renowned for responsible growth’ (Danish Government, 2008). A similar objective is voiced in the National Strategy for Corporate Social Responsibility presented by the German government in October 2010 (German Federal Government, 2010). According to the German action plan, the national strategy ‘has the task of developing a framework that focuses on allowing market forces to develop and, at the same time, seeks to square freedom of action with the active assumption of responsibility’ (p. 2). It states that ‘[t]he development of a separate CSR strategy will enhance the high regard that Germany enjoys internationally in social and environmental matters—and benefit both society and business’ (p. 5). A recent communication from the European Commission similarly suggests that ‘Corporate social responsibility can position European companies as leaders in markets that are putting an increasing premium on social and environmental issues’ (European Commission, 2010: 23).

What emerges is a positive discourse that defines CSR in terms of business opportunities and value surplus as opposed to social problems and government deficits. Performance, value creation and the wants and needs of the business community gain prominence compared to democratic deliberation and civil society interests. This is not, fundamentally, a democratic conception of CSR. Apart from its potential value as a tool for governmental self-promotion, its strength supposedly lies elsewhere: in its pragmatic ability to connect with and be able to bring the message of CSR across to business in a credible and effective manner—because it is well attuned to their circumstances and ways of thinking. It is certainly open to both critical and constructive readings. On a critical note, it does lend itself to ‘colonization’ (Deetz, 1992) or ‘hollowing out of the state’ (Rhodes, 1994) narratives and to accusations of being too exclusive occupied with the narrow if not single-minded definition of CSR as a mode of value creation—to the detriment of other motivations and values. However, it can also be considered as a form of governmental self-extension that defines and structures a new field of governmental action (Steurer, 2010), which we, again, can refer to as explicit or strategic CSR. A mode of governing that reflexively considers the business case—as a calculative practice—as the most effective means to make CSR more widespread (European Commission, 2002). As a productive mode of power, government is providing templates for development, networking and funding activities, and thus engaging in disciplinary efforts to affect and direct corporate mindsets. It is partaking in structuring the possible field of action that CSR constitutes and in this sense it is operating within the realm of corporate self-determination.

We have indicated the boundaries of competitiveness as a neoliberal truth regime in CSR. A regime that defines what relevant knowledge is or might be, which includes certain interest and excludes others and potentially have wide-reaching implications in terms of research funding, knowledge creation and networking. Questions of how material and significant its actual accomplishments are can, however, not be properly addressed at the programmatic level of political rationalization. For this we have to turn to the level of programs and technologies.

Governmental programs and technologies

It is in governmental programs that political rationalities are made specific, articulated and organized in regard to particular ends and means. Programs are the realm of designs (Miller and Rose, 1990) and become manifest in strategies, action plans, projects and the like, whereas technologies designate the point of realization for governmental programs. In order to make an impact and achieve it ends government must make use of technical means (Dean, 1999). Taken together they represent the translation of political rationality into social practice. The political power of enabling governmental programs and the technologies they apply is relational and performative. The ability of government to achieve results is dependent on its capacity to enrol and mobilize independent agents/ intermediary organizations relevant to the cause, which is to say that the success of programs depends on the ability of government—or other centres of activity—to influence, ally with or co-opt resources that they do not directly control (Rose and Miller, 1992).

Disclosure has emerged as one of the most significant programs utilized to enable CSR. The European Commission communication of 2006 states that ‘[b]ecause CSR is fundamentally about voluntary business behaviour, an approach involving additional obligations and administrative requirements for business risks being counter-productive and would be contrary to the principles of better regulation’ (European Commission, 2006: 2). In spite of this principled exclusion of regulation as a viable governmental strategy we do find examples of mandatory CSR regulation within the EU, that is, we find disclosure programs making use of the technology of soft law. They are not very demanding, however, and they do leave a considerable space open for companies to make decisions and self-govern. In France, Les Nouvelles Régulations Economiques (NRE) of 2002 makes it mandatory for the largest listed companies to disclose their financial, social and environmental performance in the annual report. However, the NRE does not stipulate whether a company must report on its international as well as its domestic operations, and it fails to provide specific indicators, auditing requirements or sanctions for non-compliance. In the UK, the Companies Act 2006 includes a requirement for listed companies to present a business review in their annual report, which, ‘to the extent necessary for an understanding of the development, performance or position of the company’s business, [must] include the main trends and factors likely to affect the future development, performance and position of the company’s business’, including, specifically, information about environmental matters, the company’s employees, and social and community issues (www.legislation.gov.uk). The requirement is, however, for narrative reporting only. According to the Department for Business Innovation and Skills, this ‘will add value to the quality of reporting without imposing unnecessary costs on business’ (www.bis.gov.uk). In Sweden, the government in 2007 made it mandatory for state-owned companies to report according to the Global Reporting Initiative (GRI) guidelines (www.regeringen.se). This is a more demanding disclosure scheme, but it only encompasses 55 companies.

The Danish case provides a vivid illustration of how disclosure requirements can be considered a reinforcement rather than a weakening of a strategic mindset in CSR. In 2008 the Danish government adopted a law making it mandatory for the largest (approximately 1.400) private and state-owned companies and institutional investors to include CSR information in their annual financial reports. More specifically, companies are required to disclose their policies on CSR, an account of how these policies are translated into action, and an opinion about the results that have been achieved through the work on CSR (www.csrgov.dk). The statutory requirement is not, however, meant to address problems of corporate irresponsibility (lack of transparency and/or accountability) or government deficits. ‘The aim is to inspire businesses to take an active position on social responsibility and communicate this (…) [it] is intended to help improve the international competitiveness of Danish trade and industry’ (www.CSRgov.dk). As in France and the UK, the requirements are not very specific or demanding, and besides, Danish companies are still ‘free to choose whether or not they wish to work on CSR’ (www.CSRgov.dk). They have to comply or explain, i.e. disclose that they are not engaged in CSR-related activities.

Apart from disclosure schemes that are mainly targeting big business, competitiveness-driven governance efforts have strongly emphasized the need to accomplish a widespread mainstreaming of CSR. The focus has been on small and medium-sized enterprises (SMEs) as an untapped resource for value creation that due to resource limitations and lack of public exposure and pressure needs a government push and government assistance to engage in CSR and become acquainted with the relevant issues on their own terms (see special issue edited by Moore and Spence, 2006). On a positive note, this can be seen as an important effort to make a ‘next wave’ in the diffusion of CSR happen—to the benefit of business and society at large. On a negative note, it can be considered an instance of government letting big business off the hook and depoliticizing the CSR effort. Either way, Grayson and Dodd (2007) have argued that politicians and government agencies are not generally the most credible messengers when it comes to reaching SMEs: ‘if CSR is seen as being primarily part of a political agenda imposed from above there is unlikely to be much progress and it may even provoke resentment and negative reactions’ (p. 19). Therefore, as they argue, most initiatives seeking to support CSR have rightly assumed that it is necessary to work with and through intermediary organizations that are already known and trusted by SMEs. CSR can be mediated by chambers of commerce, small business advisors, industry and trade associations, research institutions and other knowledge centres or other businesses including SMEs.

‘Mainstreaming CSR among SMEs’ (European Commission, 2006–2008) and ‘People and Profit’ (Denmark, 2005–2007) are probably the two most notable initiatives that have been targeting SMEs while strongly emphasizing strategic CSR and the business case (for analyses of like-minded multi-stakeholder initiatives see Diez et al., 2008; Murillo and Lozano, 2009). They have both produced and made use of technologies such as baseline data and research about CSR (surveys and case studies), practical tools, best practice models, strategies and innovation models, sets of indicators and models of performance measurement (relating to the business case), teaching materials, handbooks, guides and manuals. Other means of getting the message across have included training, seminars, workshops and events as well as various forms of mass communication.

These projects are symptomatic of government making CSR available—to business in general and SMEs in particular—as a possible field of action structured by instrumental considerations and calculative devices. The space of CSR becomes crowded with calculative practices that enable performance measurement, best practice comparisons, benchmarking and other modes of economic appropriation. In the teaching material produced for the ‘People and Profit’ project, which is widely considered to be the most ambitious and important effort of its kind in Europe so far (Grayson and Dodd, 2007), CSR is laid out as a veritable smorgasbord of business opportunities, a ‘choice architecture’ of sorts (Thaler and Sunstein, 2009) that covers every conceivable angle and relevant activity within a strategic framework.

Instead of asking the usual instrumental questions of measurement and effect, we see a need to penetrate the polished surface of programmatic statements and official self-evaluations (reflecting vested interests) and look into the networked and ‘messy’ micro-processes of programs and their technological setups to find out how the New Governance of CSR as a social practice actually works—as an simultaneous opening and closing of CSR. Apart from matters of effect and effectiveness, we must be attentive to presuppositions, assumptions, blind spots and exclusions, along with possible inconsistencies and contradictions, conflicts and tensions (Rose, 1999) that come to the fore in such efforts to provide direction for corporate responsibility. Thus, it is important that we find ways to question and problematize discourses and practices that are often self-validating and -appraising and shrouded in win-win rhetoric and promises of value creation.

Discussion and conclusion

In this article we have provided an explorative outline of how a governmentality perspective and Foucauldian notions of power and rule can be useful in illuminating political aspects of CSR. Based on the European experience, we have shown how governmentality can be used to address and problematize current developments in the government of CSR in general and neoliberal tendencies in particular. We have argued that critical reflection on the roles of government forms an integral and imperative part of a critical literature that seeks to provide embedded accounts of the social and institutional conditioning of CSR and to elucidate its political implications. We have argued for an approach that is both critical and constructive and have tried to define a middle ground where CSR is neither overpowered by radical critique calling for regulation nor de-politicized by democratic means—in order to approach the politics of CSR as an empirical phenomenon and a practical concern.

In regard to the limitations of the analysis, we have not addressed the event of the financial crisis and the changing discourse and interplay between government and government that has followed in its wake. The crisis has prompted renewed reflection on the content and direction of EU policy on CSR (EurActiv, 2010), but it is still too early to say what implications this is going to have. Paradoxically, the neoliberal competitiveness-driven approach to CSR has good prospects of escaping unharmed from the legitimacy crisis that corporate capitalism and neoliberalism as ideology is currently going through. This is because it insists on defining CSR in positive terms and refuses to address CSR as a problem of corporate irresponsibility. It presents itself as a discourse of opportunities and solutions, not problems and limitations, and it is now being called upon to deliver what the crisis calls for: ‘to build and (rebuild) trust in business, which is vital for the health of Europe’s social market economy’ (EC Directorate-General for Enterprise and Industry homepage, May 2010). CSR is now presented as ‘part of the Europe 2020 strategy for smart, sustainable and inclusive growth’ that ‘can help to shape the kind of competitiveness model that Europe wants’ (European Commission Directorate-General for Enterprise and Industry homepage, May 2010).

Another limitation is endemic to governmentality studies and the Foucauldian notions of power and government that sustain our analysis. They lead to a preoccupation with liberal and indirect means of steering which may be considered inconsequential compared to the authoritative force of regulation (Reich, 2007). Also, the application of this perspective (or rather, our reading of it) effectively means that we accept the definition of CSR as being voluntary as a constitutive blind spot for our analysis, a premise that ideology critical literature on CSR and capitalism is bound to find highly contestable, problematic and limiting. However, the real politics of CSR that have emerged over the last decade warrant this preoccupation as governments tend to consider corporate freedom more as a resource than a risk in efforts to further the cause of sustainable development. Networked CSR governance is not the whole story, but it is an important part of the story of how government conducts itself in regard to CSR. However, it is important that we consider it not only in terms of programmatic statements and overall rationalizations, but also in terms of how these rationalizations are put into practice. Analyses of the discourses of CSR and the institutionalization of structures need to be supplemented by analyses of governance as social practices, networks, techniques and the materiality this implies. Of course, it is a field that calls for much deeper and more comprehensive empirical analysis than we have provided in this article.