Responsible? Did you say responsible?

By parodying Jacques Prévert's famous line from the film "Drôle de drame" (1937), we'd like to draw attention to the sudden celebrity of this adjective, which is springing up everywhere to describe the desirable evolution of our society, but which is rather poorly defined.

Najoua TAHRI, University of Montpellier and Jacques Igalens, Toulouse 1 Capitole University

Anna Shvets/Pexels CC BY-NC-SA

A responsible state?

First of all, at the top of the State. It used to be the case that the government included a Secretary of State for the Social and Solidarity Economy (ESS), but since July 2020, the Castex government has included a Secretary of State for the Social, Solidarity and Responsible Economy, Ms Olivia Grégoire.

While the SSE is well defined as the world of associations, mutual societies, cooperatives and foundations, the "responsible" economy is not.

What is known is CSR, "corporate social responsibility", which requires or sometimes suggests that companies limit their environmental impact and avoid causing social or societal damage. But CSR concerns all companies and even all organizations, whatever their status. It's very different from SSE. So we'll have to wait and see what the "responsible economy" and its new Secretary of State actually entail.

Responsible capitalism

Responsible economy has not yet been defined, but responsible capitalism has just been, 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 Renault) point out, it's not just a question of talking about CSR, but of thinking about capitalism as a whole. We are currently living under the domination of financial capitalism, which is by nature short-termist, focused essentially on the interests of shareholders, and for the authors it is a question of envisaging another type of capitalism that would think in terms of long-term economic prosperity and take society as a whole into account. Through the notion of "raison d'être", they see the beginnings 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 lead it to reflect on its raison d'être". The recommendations of this report were partially taken up in the Pacte law, which gave rise to notable legislative changes, notably on the very definition of the company. Yet the notion of "raison d'être" was already the essential pillar of the "Sénard/Notat" report and, since the Pacte law, more than half of CAC 40 companies have adopted it.

Responsible capitalism would therefore be the capitalism of raison d'être, but for the authors, it's not enough for companies to transform themselves by adopting a "raison d'être", they also need investors to accompany them, or even precede them, and the bulk of the 17 recommendations contained in the report relate to company 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 the conditions under which companies are financed are indeed a central issue in capitalism: without capital, there can be no capitalism...

On the other hand, what is more surprising is to limit capitalism to the financing of companies, since capitalism is also linked to a mode of representation and the exercise of power that the report does not address.

The notion of "stakeholders" is present in the report, but their place and role in the governance of a responsible company is not addressed. This point is currently the subject of debate between those who opt for the integration of stakeholders within Boards of Directors (BoD) and those who believe that, alongside the BoD and the Supervisory Board, a Stakeholder Council (or Committee) should be created, whose functions and powers should be clearly specified, as expressed by Jacques Igalens and Sébastien Point in their book Vers une nouvelle gouvernance des entreprises. L'entreprise face à ses parties prenantes. Both solutions have their advantages and disadvantages. Putting stakeholders on the Board of Directors runs the risk of diminishing the effectiveness of a body that is essential to capitalism, since the Board is a management body whose mission is to define strategy. If it represents divergent interests, it runs the risk of failing to reach a consensus, and sinking into futile palaver.

Setting up a stakeholder committee is often a bit of a long shot, as it quickly becomes a recording chamber. Responsible capitalism has yet to be defined, particularly in terms of governance.

Individual responsibility

After the economy and capitalism, the adjective responsible is also appearing strongly in current research to qualify the individual behavior of the employee, customer, job seeker or citizen in general.

The concept behind this research is "micro-CSR". In a recent analysis, David Jones, Chelsea Wilness and Ante Glavas even describe "an explosion of micro-CSR research". The results provide a better understanding of the reasons behind behaviours such as volunteering, responsible consumption and ecological practices. They highlight the altruistic dimension and the alignment between individual and organizational values.

By applying Peter Blau's theory of social exchange in his study Exchange and Power in Social Life, we have been able to demonstrate that employees of companies who behave responsibly feel indebted and in turn become involved in environmental or social causes.

Responsible" has thus become a new horizon for the economy and capitalism, but this horizon is not yet very precise. On the other hand, if responsible economics and capitalism were to be based on responsible individual behavior in the future, research would be able to give us some food for thought.The Conversation

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, Toulouse 1 Capitole University

This article is republished from The Conversation under a Creative Commons license. Read theoriginal article.