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Corporations and NGOs: When Accountability Leads to Co-optation

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Abstract

Interactions between corporations and nonprofits are on the rise, frequently driven by a corporate interest in establishing credentials for corporate social responsibility (CSR). In this article, we show how increasing demands for accountability directed at both businesses and NGOs can have the unintended effect of compromising the autonomy of nonprofits and fostering their co-optation. Greater scrutiny of NGO spending driven by self-appointed watchdogs of the nonprofit sector and a prevalence of strategic notions of CSR advanced by corporate actors weaken the ability of civil society actors to change the business practices of their partners in the commercial sector. To counter this trend, we argue that corporations should embrace a political notion of CSR and should actively encourage NGOs to strengthen “downward accountability” mechanisms, even if this creates more tensions in corporate–NGO partnerships. Rather than seeing NGOs as tools in a competition for a comparative advantage in the market place, corporations should actively support NGO independence and critical capacity.

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Notes

  1. A similar case is currently evolving around the Marine Stewardship Council’s (MSC) certification of the Norwegian company Aker BioMarine’s krill harvest as environmentally sustainable. Greenpeace criticizes that the MSC has given “an unofficial nod to the basic idea that vacuuming up the tiny life forms forming the foundations of the oceanic ecosystem is an acceptable practice” (Jolly 2010). Greenpeace’s criticism convinced the world’s leading organic food retailer Whole Foods Market to halt the sales of krill oil because of sustainability issues. This shows that certification does not guarantee a corporation the legitimacy and the hoped-for monetary gains, if a watchdog NGO at the same time chooses to put this corporation on a red list (Whole Foods Magazine Staff 2010).

  2. It is important to note that NGO watchdogs such as Charity Navigator have recently embarked on efforts to overhaul their rating systems and supplement financial measures with other criteria, including transparency and reputation among peers and beneficiaries (Ogden 2009).

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  1. Institute for Business Ethics, University of St. Gallen, Tannenstrasse 19, CH-9000, St. Gallen, Switzerland

    Dorothea Baur

  2. Moynihan Institute of Global Affairs, Maxwell School of Syracuse University, Syracuse, USA

    Hans Peter Schmitz

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  1. Dorothea Baur
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Correspondence to Dorothea Baur.

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Baur, D., Schmitz, H.P. Corporations and NGOs: When Accountability Leads to Co-optation. J Bus Ethics 106, 9–21 (2012). https://doi.org/10.1007/s10551-011-1057-9

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