business associations, corporate, NGO andactivist groups, and consulting organizations thathave developed and are promulgating a widerange of relevant policy initiatives. These initia-tives include a mix of transparency and reportinginitiatives, codes of conduct, principles, and fair trade agreements.
Responses to these demandsare varied. Many companies, particularly thoseunder NGO and social activist pressures toreform labor and human rights abuses in their supply chains, have formulated their own codesof conduct. Notable among these companies areLevi Strauss, Nike, and Reebok, all significanttargets of activism.The proliferation of standards, principles,reporting initiatives, and codes threatens confu-sion and continued lack of implementation unlessthere is a common set of principles shared amongthem. Below we explore whether in theemerging proliferation of initiatives, there mightbe a common set of foundation principles or standards that could, if actually implemented,suggest standards of management practice. Thearray of emerging standards suggests that thereis a gap between growing public expectationsfrom a variety of stakeholders and actualcompany performance else this array of initiativeswould not occur. Pressures from a wide rangeof stakeholders appear to be pushing companiestoward a common set of guidelines of what
to be and away from the stark and not alwayspleasant realities of global competition (Frenkel,2001; O’Rourke, 1997, 2000; Greider, 1998).But this change is happening neither quickly nor systemically as of yet, nor is it entirely clear thatvoluntary standards alone will satisfy corporatecritics or develop what Goodpaster (2003) callscorporate conscience. As a starting point,however, one thing is clear: for standards to beeffective over the long term, agreement on fun-damental principles or foundational values mustbe found, and, as Sethi (2003) has argued, com-panies must be held accountable for their implementation.
The argument for foundation principles
Foundation principles, if they exist, wouldprovide a
below which it does not makeethical sense to go. As noted, however, suchprinciples or values make sense only if there issufficient global agreement about the standardsthat they create a level playing field for com-panies adhering to them. For example, corporatecritics ask whether a company that employed 180forced laborers yesterday and only 160 todaycould really be considered to be more respon-sible through this reduction. Yes, there is animprovement in practice, but most people wouldlikely agree that slavery is reprehensible under any circumstances. Fundamental or foundationprinciples would suggest where the “floor” butnot the “ceiling” of responsible practice lies.Such baseline level behaviors, practices, andvalues are foundation values.
Foundation values are generally agreed standards that provide a floor of accept-able practice
going below which is ethically andmanagerially problematic. Donaldson and Dunfee(1999) term such general principles or values‘hypernorms’ and suggest that relatively universalconsensus must exist for them to exist at all. Theydefine hypernorms to ‘entail principles so fun-damental to human existence that they serve asa guide in evaluating lower level moral norms’(1994, p. 265).General agreement (by businesses) on acommon set of foundational principles – abaseline or “moral minimum” (Donaldson andDunfee, 1999) for operating practice – would bean important development in providing a levelplaying field for companies. Schwartz (2002), for example, argues for a set of universal moralstandards, including trustworthiness, respect,responsibility, fairness, caring, and citizenship,which could underpin the development of codesand principles themselves. Agreement on foun-dation principles could help companies avoid theinformation overload and code mania that someare currently experiencing as the number andtypes of initiatives grow, as well as disparitiesbetween developed and developing nations (e.g.,Behrman, 2001).Donaldson and Dunfee (1999) provide aframework for core values, built upon the need
Creating Corporate Accountability