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Democratizing corporate governance: Compensating for the democratic deficit of corporate political activity and corporate citizenship


Scherer, A G; Baumann, Dorothée; Schneider, Anselm (2013). Democratizing corporate governance: Compensating for the democratic deficit of corporate political activity and corporate citizenship. Business & Society, 52(3):473-514.

Abstract

This article addresses the democratic deficit that emerges when private corporations engage in public policy, either by providing citizenship rights and global public goods (corporate citizenship) or by influencing the political
system and lobbying for their economic interests (strategic corporate political activities). This democratic deficit is significant, especially when multinational corporations operate in locations where national governance
mechanisms are weak or even fail, where the rule of law is absent and there is a lack of democratic control. This deficit may lead to a decline in the social
acceptance of the business firm and its corporate political activities and, thus, to a loss of corporate legitimacy. Under these conditions corporations may compensate for the emerging democratic deficit and reestablish their
legitimacy by internalizing democratic mechanisms within their organizations, in particular in their corporate governance structures and procedures. Theauthors analyze the available corporate governance models with the help of
a typology and discuss the possible contributions of a new form of democratic corporate governance.

This article addresses the democratic deficit that emerges when private corporations engage in public policy, either by providing citizenship rights and global public goods (corporate citizenship) or by influencing the political
system and lobbying for their economic interests (strategic corporate political activities). This democratic deficit is significant, especially when multinational corporations operate in locations where national governance
mechanisms are weak or even fail, where the rule of law is absent and there is a lack of democratic control. This deficit may lead to a decline in the social
acceptance of the business firm and its corporate political activities and, thus, to a loss of corporate legitimacy. Under these conditions corporations may compensate for the emerging democratic deficit and reestablish their
legitimacy by internalizing democratic mechanisms within their organizations, in particular in their corporate governance structures and procedures. Theauthors analyze the available corporate governance models with the help of
a typology and discuss the possible contributions of a new form of democratic corporate governance.

Citations

21 citations in Web of Science®
22 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Center for Corporate Responsibility and Sustainability
Dewey Decimal Classification:330 Economics
Language:English
Date:2013
Deposited On:13 Mar 2013 16:40
Last Modified:05 Apr 2016 16:41
Publisher:Sage Publications, Inc.
ISSN:0007-6503
Publisher DOI:https://doi.org/10.1177/0007650312446931
Official URL:http://bas.sagepub.com/content/early/2012/06/04/0007650312446931.full.pdf+html

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