Economic ethics and corporate social responsibility

PART I. INTRODUCTION: WHAT DO WE MEAN BY CSR , WHY IS IT SO DISCUSSED? A FIRST EXPLANATION OF THE REASONS FOR THE CSR MOVEMENT

a. A very brief introduction to the main international and national initiatives on CSR from the beginning of the new century:
i. The corporate voice
ii. The early national Multi-stakeholder projects: UK, Italy, Spain, Germany;
iii. International initiatives : the ONU social Compact, EU commission and EU Parliament initiatives, self-regulatory standards: SA8000, GRI , ISO guidelines.

b. An explanation of why CSR got so much attention in the last two decades, even if it wasn't completely successful

i. Recurring corporate scandals
ii. Globalization and its discontents
iii. The global financial crisis and the failure of the shareholder value model
iv. An explanation of CSR based on the economic theory of transaction costs: CSR as battle- ground between two tendencies: privatization and responsibility of corporate actors
v. Multiple models of CG and the role of social norms
vi. A new framework: sustainability, social responsibility and CSR .

PART 2. THE ECONOMIST'S THEORIES OF CG AND THE FIRM MAINLY IN NEO-INSTITUTIONAL PERSPECTIVE.
a. The economists' debate on the nature of corporation

i. New institutional economics, transaction cost economics and the theory of the firm as hierarchy (Williamson)
ii. The GHM model of incomplete contract and the theory of the firm
iii. the problem of multiple specific investments abuse of authority and the need of an wider explanation base of the stakeholders agreement.

b. From the principal agent model of CG to alternative theories of the firm: team production and the mediating hierarchy, the cooperative game theory of the firm and alternative models of capitalism (USA managerialism, Germany and Japan), the relevance of social norm for CG and the definition of economic institution .

PART 3: ECONOMICS IS NOT ENOUGH: A BRIEF INTRODUCTION TO ECONOMIC ETHICS AND BUSINESS ETHICS.
a. Meta-ethics, normative ethics and applied ethics.

b. Moral sentences: prescriptive , universalizable and overriding,

c. Alternative criteria of classification of moral arguments and theories.

d. Alternative ethical theories applied to business: Utilitarianism, libertarianism, contractarianism and contractually, justice as fairness, conventionalism, communitarianism, the capability approach .

e. reckoning ethical theories: an experiment.

f. From economic ethics to business ethics .
i. Moral responsibility.
ii. Is the corporation morally responsible? Who is morally responsible?

PART 4. THE SOCIAL CONTRACT THEORY OF CSR AND GC
A) Back to CSR: An alternative to the shareholder model of the firm, the socially responsible enterprise.

a. general definition; CSR as extended model of corporate governance and the multi-stakeholder model of CG
i. stakeholders (definition) and fiduciary duties
ii. Is it more efficient? a critical reading of the new institutional theory of the firm and the problem of abuse of authority .

b. Going more in depth into the problems and virtues of the socially responsible corporation
i. the problem of conflicting stakeholders and the unique objective function, the corporate actor as artificial agent and its justification
ii. the social contract of the firm, and the Nash bargaining solution as the objective function of the firm (again Aoki)
iii. the veil of ignorance applied to management (again Blair and Stout)
iv. endogenous emergence of the socially responsible corporation through impartial agreements : pactum unionis and pactum subjectionis
v. A list of fiduciary duties toward multiple stakeholders

B) A wider social contract foundation of CSR, from the social contract of the firm to the constitutional contract on CG principles.

a. The constitutional and post constitutional contracts approach to the choice of corporate governance structures.
i. Proportionality to need and proportionality to contribution;
ii. Correspondence to cooperative / bargaining game solutions (Nash and Shapley) , The problem of institutional feasibility .

b. What happens if the firm emerges form a stare of nature:?
i. the Binmore-Rawls theory of the veil of ignorance as equilibrium selection device
ii. Egalitarianism is the only solution consistent with stability and impartiality
iii. The egalitarian theory of corporate governance
iv. Against received views: A libertarian cannot be but egalitarian; first equality then efficiency.

c. General Justice and CSR
i. Corporate governance takes a place in the Rawls' theory of justice and in constitutional regulation
ii. Sen's capability approach applied to the firm
iii. Other way .no welfare state may work: the paradox of Penelope canvass

C) Implementing the socially responsible model of corporation. Ex post compliance with the social contract of the firm.

C.1. The first model of implementation based on reputation mechanism. The apparently voluntary nature of CSR and the possibility of sophisticated opportunism, Self-interest and reputation models

a. Reputation effects and the fragility of reputation.

b. A proper model of reputation effect under unforeseen contingencies and the design of ethical standards under limited knowledge .

c. The everlasting problem of multiple reputations, the cognitive use of the veil of ignorance to select a unique fair equilibrium point; framing and limited reasoning again at work.

C.2 Again on implementing the socially responsible corporation and ex post compliance with the social contract of the firm: non egoistic motivations based on deliberation, agreement and the emergence of a preference for reciprocity. The contribution of behavioral and experimental economics .

a. Rawlsian sense of justice and two kind of preferences;

b. Conformity preferences and utility functions in behavioral and psychological games with ex ante agreements as cheap talk.

c. Conformity preferences in simple and repeated games:
i. conformist preferences in the trust game and prevention of abuse of authority.
ii. strong and weak stakeholders -network of games and the punishment of the irresponsible corporation.

d. Experiments and empirical evidence in favor of conformity preferences:
i. the experimental exclusion game
ii. distributive justice with production and the selection of liberal egalitarianism
iii. Why do we believe in reciprocal conformity? Explanation based on cognitive views of limited reasoning .

e. Alternative forms of economic organization:
i. the emergence and stability of the nonprofit organization;
ii. the commons and its cooperative governance
f. A new repartition of social responsibility among the State, private actors and non- profit organizations as a system: shared social responsibility

C.3 A management standard for the socially responsible company: the Q-RES model and tools- set

a. Vision
b. Codes of ethics
c. Ethical corporate culture
d. Implementation and Quality standard for different processes
e. Ethical audit
f. Social reporting
g. Independent third party verification