A Rawlsian View of CSR and the Game Theory of its Implementation (III): Conformism, Equilibrium Refinement and Selection

This is the third part of a comprehensive essay on the Rawlsian view of corporate social responsibility (CSR), seen as an extended model of corporate governance, and the corresponding firm’s objective function.1 In the first part of this essay (Sacconi, 2010a), I provided the following definition of CSR as a multi-stakeholder governance model (see also Sacconi 2006a, 2006b, 2007a, 2009): CSR is a model of extended corporate governance whereby those who run a firm (entrepreneurs, directors, managers) have responsibilities that range from fulfillment of fiduciary duties toward the owners to fulfillment of analogous — even if not identical — fiduciary duties toward all the firm’s stakeholders. This definition has been articulated and defended as an institutional model of corporate governance implementable through explicitly expressed norms of self-regulation based on company/stakeholders social dialog — which means that CSR is neither a matter of managerial discretion nor one of external regulation enforced though statutory laws. The basic idea is that such a model of self-regulation, provided it is not obstructed by statutory company law, which imposes a single-stakeholder fiduciary model and objective function on companies, is self sustaining. Hence the relevant perspective from which to understand the normative nature of CSR is that of an institution in Aoki’s sense (see Aoki 2001, Aoki 2007a, Aoki 2007b and Sacconi 2010a).