Adopting the Laws of Nature to Protect Nature?
16 Pages Posted: 29 Nov 2013
Date Written: November 17, 2013
The research question is how might firms obtain the incentive to minimize any negative environmental impact arising from their business? One way is for the constitutions of firms to be amended, with or without a tax incentive, to integrate environmental stewardship into their governance architecture. Alternatively, laws could be introduced to allow citizens to become environmental co-regulators. To protect the property rights of investors and allow a nuanced efficient resolution of any conflicts between them and environmentally concerned stakeholders the constitutions of firms could be amended to separate the power to manage a business from the power to govern the firm. This allows the introduction of a network form of governance that is universally found in nature to allow creatures to sustain their existence. Network governance allows other stakeholders like employees, suppliers, distributors and customers to also voice their concerns to protect and further their interests by also becoming co-regulators with environmentalists. In this way network governance furthers self-governance to reduce the need for corporate laws, regulations, regulators, legal actions, standards and codes of practice. Democracy is enriched at the firm level while reducing the role, size and cost of governments.
Keywords: Co-regulation, CSR, Governance architecture, Environmental stewardship, Network governance
JEL Classification: D71, D74, G38, K22, K32, L22, Q30
Suggested Citation: Suggested Citation