Are multi-stakeholder initiatives fit for addressing grand challenges?
Picture: Friends of Earth Netherlands
Multi-stakeholder initiatives (MSIs) are expected to address grand societal challenges such as poverty and hold its members accountable for their practices. However, we know relatively little about the actual processes of MSIs in terms of holding participating corporations accountable. And paradoxically, a forerunning company in corporate social responsibility has been facing numerous lawsuits in which affected communities try to hold the company to account for engaging in malpractices which fuel grand challenges (GC) in the Niger Delta.
This paradox raises a critical question: How can stakeholders organize effectively within MSIs to secure accountable processes?
In our article, we address this gap by focusing on the relationship between a company and an accountability forum of affected stakeholders and non-governmental organizations (NGOs) (collaborating and opposing) within the MSI. We examine the tensions, which the accountability forum perceives in MSI accountability relationships and the criteria that are necessary to meet the forum's accountability claims.
We chose to examine Shell in Nigeria due to the salience and gravity of GC, the widely observed positive and negative impact of Shell's MSI engagement, and the authors’ privileged access to NGOs in Nigeria. We focused on two MSIs that were created by Shell's subsidiary Shell Petroleum Development Company in Nigeria. We conducted an inductive study which explored the tensions the accountability forum perceives accountability relationships and the criteria and constitutive elements of each phase of the engagement process to effectively hold Shell accountable.
The ongoing tension between affected stakeholders and the corporation comprise the essence of accountability relationships in MSIs
We advance a model with a temporal, relational, and communicative dimension to MSIs in developing countries. Our theoretical claim is that taking into account the accountability criteria during facilitating, dialoguing, and evaluating allows affected stakeholders to validate and match legitimacy claims with their own expectations, and thus, manage MSIs more effectively. Through our focus on accountability, we offer a novel perspective on analysing the effectiveness of MSIs to address GC.
Our model extents current theorizing by adding a temporal dimension to our understanding of MSI management as an extended, interactive process. It goes beyond isolated and static input and output criteria and depicts how accountability challenges can be overcome in the process of facilitating, dialoguing, and evaluating. By looking at multi-stakeholder interaction in practice between the visible poles of inputs and outputs we offer a window into the process of symbolic implementation which provides insights into our core puzzle, how MNCs engage in MSIs but do not achieve desired social outcomes to address GC.
Our study provides a pragmatic and nuanced perspective of MSI engagement that integrates critical elements (power relationships, independence, and not achieving outcomes) with a more optimistic view (increasing adoption of CSR practices within MSIs) and points to limitations and possibilities of effective MSIs. We suggest that the ongoing tension between affected stakeholders and the corporation comprise the essence of accountability relationships in MSIs.
It is crucial to support the independence and critical capacity of NGOs and select authentic community leaders or representatives as MSI members
The relational dimension places emphasis on the importance of social relations and expectations. While our findings confirmed the need to collaborate with NGOs, our study questions the assumption that all NGOs act on behalf of the common good. We have shown that company-selected NGOs lack representativeness as the business relationship with the company compromises their autonomy and fosters co-optation. It is crucial to support the independence and critical capacity of NGOs and select authentic community leaders or representatives as MSI members.
Furthermore, our findings confirmed the vital role of engaging with low-power stakeholders such as affected communities as their expectations are central to the entire accountability process. We also highlighted the importance of informing and connecting accountability processes with communities' expectations of appropriate conduct and performance We showed that this is particularly crucial for companies from controversial industries as stakeholder expectations are more demanding.
A focus on stakeholder expectations allows to (re)align the process toward shared interests and goals and sustains the members’ trust and confidence in the process of MSIs even in the absence of external monitoring or sanctions. Additionally, it empowers low-power stakeholders and increases their ownership of outcomes. This involves a shared responsibility for outcomes which has been linked to increased accountability and can help to mitigate some of the political and power processes that often delegitimize MSIs and marginalize its members.
An important precondition is capacity building of affected communities and NGOs to guarantee technical knowledge and critical capacity
An important precondition is capacity building of affected communities and NGOs to guarantee technical knowledge and critical capacity. Also, addressing inclusion and procedural fairness in accountability relationships provides different stakeholders with a shared understanding of each other's goals which allows decision making to be based on the principle of “bounded self-interest”.
The communicative dimension places emphasis on the construction of a narrative which involves engaging in a particular discourse of accountability. This is important for accountability relationships as MSIs are “an interpretive and discursive schema through which participants in the accountability relationship make sense of their own and each other's roles, which is constitutive of their relationship and which is fundamentally shaped by it” (Black, 2008). Scholars with a positive perspective on MSIs assume that the company's narrative has organizational consequences in that responding to moral claims (e.g., address GC) can itself have transformative effects on an organization. Our findings show that affected stakeholders perceive the company's narrative as false when that narrative serves corporate interests and is not constitutive of organizational practices. Accountability relationships are perceived to be used as strategic devices to manipulate perceptions of the company's activities and performance.
In conclusion, our model introduces an “accountability turn” by advancing a temporal, relational, and communicative dimension to MSIs in developing countries. Beyond academic theorizing, this perspective may well hold value for NGOs, policymakers, and business managers as it advances a concept of responsibility based on a set of accountability criteria which have the potential to become a cornerstone for how MSI members can organize to effectively address GC in developing countries. It is important to address deep-rooted tensions in accountability relationships because––if unresolved––they create a culture of blame which drives attention away from the ultimate goal of addressing GC.