Signalling responsibility? Applying signalling theory to the ISO 26000 standard for social responsibility

Research output: Contribution to journalArticleScientificpeer-review

1 Citation (Scopus)
38 Downloads (Pure)

Abstract

Many global challenges cannot be addressed by one single actor alone. Achieving sustainability requires governance by state and non-state market actors to jointly realise public values and corporate goals. As a form of public-private governance, voluntary standards involving governments, non-governmental organisations and companies have gained much traction in recent years and have been in the limelight of public authorities and policymakers. From a firm perspective, sustainability standards can be a way to demonstrate that they engage in corporate social responsibility (CSR) in a credible way. To capitalise on their CSR activities, firms need to ensure their stakeholders are able to recognise and assess their CSR quality. However, because the relative observability of CSR is low and since CSR is a contested concept, information asymmetries in firm-stakeholder relationships arise. Adopting CSR standards and using these as signalling devices is a strategy for firms to reduce these information asymmetries, by revealing their true CSR quality. Against this background, this article investigates the voluntary ISO 26000 standard for social responsibility as a form of public-private governance and contends that, despite its objectives, this standard suffers from severe signalling problems. Applying signalling theory to the ISO 26000 standard, this article takes a critical stance towards this standard and argues that firms adhering to this standard may actually emit signals that compromise rather than enhance stakeholders' ability to identify and interpret firms' underlying CSR quality. Consequently, the article discusses the findings in the context of public-private governance, suggests a specification of signalling theory and identifies avenues for future research.

Original languageEnglish
JournalSustainability
Volume10
Issue number11
DOIs
Publication statusPublished - 2018

Keywords

  • Corporate social responsibility
  • ISO 26000
  • Information asymmetry
  • Private governance
  • Public-private governance
  • Signalling theory
  • Sustainability standards

Cite this

@article{8f0827bba4734b45aa18ecd2fe6e45f0,
title = "Signalling responsibility? Applying signalling theory to the ISO 26000 standard for social responsibility",
abstract = "Many global challenges cannot be addressed by one single actor alone. Achieving sustainability requires governance by state and non-state market actors to jointly realise public values and corporate goals. As a form of public-private governance, voluntary standards involving governments, non-governmental organisations and companies have gained much traction in recent years and have been in the limelight of public authorities and policymakers. From a firm perspective, sustainability standards can be a way to demonstrate that they engage in corporate social responsibility (CSR) in a credible way. To capitalise on their CSR activities, firms need to ensure their stakeholders are able to recognise and assess their CSR quality. However, because the relative observability of CSR is low and since CSR is a contested concept, information asymmetries in firm-stakeholder relationships arise. Adopting CSR standards and using these as signalling devices is a strategy for firms to reduce these information asymmetries, by revealing their true CSR quality. Against this background, this article investigates the voluntary ISO 26000 standard for social responsibility as a form of public-private governance and contends that, despite its objectives, this standard suffers from severe signalling problems. Applying signalling theory to the ISO 26000 standard, this article takes a critical stance towards this standard and argues that firms adhering to this standard may actually emit signals that compromise rather than enhance stakeholders' ability to identify and interpret firms' underlying CSR quality. Consequently, the article discusses the findings in the context of public-private governance, suggests a specification of signalling theory and identifies avenues for future research.",
keywords = "Corporate social responsibility, ISO 26000, Information asymmetry, Private governance, Public-private governance, Signalling theory, Sustainability standards",
author = "L Moratis",
year = "2018",
doi = "10.3390/su10114172",
language = "English",
volume = "10",
journal = "Sustainability",
issn = "2071-1050",
publisher = "MDPI",
number = "11",

}

Signalling responsibility? Applying signalling theory to the ISO 26000 standard for social responsibility. / Moratis, L.

In: Sustainability, Vol. 10, No. 11, 2018.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Signalling responsibility? Applying signalling theory to the ISO 26000 standard for social responsibility

AU - Moratis, L

PY - 2018

Y1 - 2018

N2 - Many global challenges cannot be addressed by one single actor alone. Achieving sustainability requires governance by state and non-state market actors to jointly realise public values and corporate goals. As a form of public-private governance, voluntary standards involving governments, non-governmental organisations and companies have gained much traction in recent years and have been in the limelight of public authorities and policymakers. From a firm perspective, sustainability standards can be a way to demonstrate that they engage in corporate social responsibility (CSR) in a credible way. To capitalise on their CSR activities, firms need to ensure their stakeholders are able to recognise and assess their CSR quality. However, because the relative observability of CSR is low and since CSR is a contested concept, information asymmetries in firm-stakeholder relationships arise. Adopting CSR standards and using these as signalling devices is a strategy for firms to reduce these information asymmetries, by revealing their true CSR quality. Against this background, this article investigates the voluntary ISO 26000 standard for social responsibility as a form of public-private governance and contends that, despite its objectives, this standard suffers from severe signalling problems. Applying signalling theory to the ISO 26000 standard, this article takes a critical stance towards this standard and argues that firms adhering to this standard may actually emit signals that compromise rather than enhance stakeholders' ability to identify and interpret firms' underlying CSR quality. Consequently, the article discusses the findings in the context of public-private governance, suggests a specification of signalling theory and identifies avenues for future research.

AB - Many global challenges cannot be addressed by one single actor alone. Achieving sustainability requires governance by state and non-state market actors to jointly realise public values and corporate goals. As a form of public-private governance, voluntary standards involving governments, non-governmental organisations and companies have gained much traction in recent years and have been in the limelight of public authorities and policymakers. From a firm perspective, sustainability standards can be a way to demonstrate that they engage in corporate social responsibility (CSR) in a credible way. To capitalise on their CSR activities, firms need to ensure their stakeholders are able to recognise and assess their CSR quality. However, because the relative observability of CSR is low and since CSR is a contested concept, information asymmetries in firm-stakeholder relationships arise. Adopting CSR standards and using these as signalling devices is a strategy for firms to reduce these information asymmetries, by revealing their true CSR quality. Against this background, this article investigates the voluntary ISO 26000 standard for social responsibility as a form of public-private governance and contends that, despite its objectives, this standard suffers from severe signalling problems. Applying signalling theory to the ISO 26000 standard, this article takes a critical stance towards this standard and argues that firms adhering to this standard may actually emit signals that compromise rather than enhance stakeholders' ability to identify and interpret firms' underlying CSR quality. Consequently, the article discusses the findings in the context of public-private governance, suggests a specification of signalling theory and identifies avenues for future research.

KW - Corporate social responsibility

KW - ISO 26000

KW - Information asymmetry

KW - Private governance

KW - Public-private governance

KW - Signalling theory

KW - Sustainability standards

U2 - 10.3390/su10114172

DO - 10.3390/su10114172

M3 - Article

VL - 10

JO - Sustainability

JF - Sustainability

SN - 2071-1050

IS - 11

ER -