Responsible? Did you say responsible?
By parodying Jacques Prévert's famous line in the film "Drôle de drame" (1937), we want to draw attention to the sudden popularity of this adjective, which is popping up everywhere to describe the desirable evolution of our society but which is rather poorly defined.
Najoua TAHRI, University of Montpellier and Jacques Igalens, University of Toulouse 1 Capitole
A responsible state?
Firstly, at the highest level of government. It was common for the government to include a Secretary of State for Social and Solidarity Economy (SSE), but since July 2020, the Castex government has included a Secretary of State for Social, Solidarity and Responsible Economy, Ms. Olivia Grégoire.
However, while the social and solidarity economy is well defined, encompassing associations, mutual societies, cooperatives, and foundations, the "responsible" economy is not.
What is well known is CSR, or "corporate social responsibility," which requires or sometimes suggests that companies limit their environmental impact and avoid causing social or societal harm. But CSR applies to all companies and even all organizations, regardless of their status. It is very different from the SSE. We will therefore have to wait and see what "responsible economy" and its new Secretary of State will entail.
Responsible capitalism
While responsible economics has not been defined, responsible capitalism has just been defined in a report by the Institut Montaigne entitled "Responsible capitalism, an opportunity for Europe."
As Yves Perrier (CEO of Amundi) and Jean-Dominique Sénard (Chairman of the Board of Directors of Renault) point out, it is not simply a matter of discussing CSR, but of thinking about capitalism as a whole. We currently live under the domination of financial capitalism, which is short-termist by nature and focused primarily on shareholder interests. The authors propose considering another type of capitalism that would focus on long-term economic prosperity and take society as a whole into account. They see the notion of "raison d'être" as the beginning of responsible capitalism.
Jean-Dominique Sénard was one of the two authors of the "Sénard/Notat" report submitted to the government in March 2018, which aimed to "restore substance to the company and encourage it to reflect on its raison d'être." The recommendations in this report were partially incorporated into the Pacte law, which led to significant legislative changes, particularly with regard to the very definition of a company. However, the concept of "raison d'être" was already a key pillar of the "Sénard/Notat" report, and since the Pacte law came into force, more than half of the CAC 40 companies have adopted it.
Responsible capitalism would therefore be capitalism with a purpose, but for the authors, it is not enough for companies to transform themselves by adopting a "purpose"; investors must also support them or even lead the way, and most of the 17 recommendations contained in the report relate to corporate financing. The first recommendation sets the tone: European financial resources must be made available for long-term investment.
These recommendations come as no surprise, since corporate financing conditions are indeed a central issue in capitalism: without capital, there is no capitalism...
On the other hand, what is more surprising is limiting capitalism to corporate financing, because capitalism is also linked to a mode of representation and exercise of power that the report does not address.
The concept of "stakeholders" is mentioned in the report, but their place and role in responsible corporate governance are not addressed. However, this point is currently the subject of debate between those who favor integrating stakeholders into boards of directors and those who believe that, alongside the board of directors and the supervisory board, a stakeholder council (or committee) should be created, with clearly defined functions and powers, as expressed by Jacques Igalens and Sébastien Point in their book Vers une nouvelle gouvernance des entreprises. L’entreprise face à ses parties prenantes(Towards a new form of corporate governance: companies and their stakeholders). Each of these two solutions has advantages and disadvantages. Including stakeholders on the board of directors runs the risk of reducing the effectiveness of an essential body of capitalism, as the board is a management body whose mission is to define strategy. If it represents divergent interests, it may fail to reach consensus and sink into fruitless debate.
Setting up a stakeholder committee is often a waste of time, as such committees quickly become mere rubber-stamp bodies. Responsible capitalism therefore remains to be defined, particularly in terms of its governance.
Individual responsibility
After economics and capitalism, the adjective "responsible" is also appearing strongly in current research to describe the individual behavior of employees, customers, job seekers, and citizens in general.
The concept underpinning this research is that of "micro CSR." In a recent analysis, David Jones, Chelsea Wilness, and Ante Glavas even refer to it as "an explosion of research into micro CSR." The results provide a better understanding of the reasons behind behaviors such as volunteering, responsible consumption, and eco-friendly practices. They highlight the altruistic dimension and the alignment between individual values and those of organizations.
Thus, by applying Peter Blau's theory of social exchange in his study Exchange and Power in Social Life, it has been shown that employees of companies that behave responsibly feel indebted and in turn commit themselves to environmental or social causes.
The term "responsible" has therefore become a new horizon for the economy and capitalism, but this horizon is not yet very clear. However, if responsible economics and capitalism were to be based in the future on responsible behavior by individuals, research would be able to provide us with some food for thought.
Najoua TAHRI, Senior Lecturer in Management Sciences, IAE Montpellier and MRM., University of Montpellier and Jacques Igalens, Professor of Management Sciences, IAE Toulouse and CRM-CNRS, University of Toulouse 1 Capitole
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