McGill Law Journal ~ Revue de droit de McGill
BOOK NOTE
Michael Kerr, Richard Janda & Chip Pitts, Corporate Social
Responsibility: A Legal Analysis (Markham, Ont: LexisNexis, 2009).
This treatise on the ambiguous concept known as corporate social re-
sponsibility (CSR) is an essential primer for the legal practitioner. With
few substantial legal texts in the field to build upon, the authors under-
take not just to explain CSR but to define it for the legal practitioner. In
so doing, the authors give some much needed shape to the concept while
revealing the real lack of clarity there still remains as to what CSR truly
entails. While not conclusive, this text provides an immensely useful
starting point for what will likely be a highly interesting debate that will
challenge the way lawyers understand their role as advisor to corporate
clients.
The text provides both a theoretical and practical review of a number
of developing principles that coalesce into the concept of CSR, and that
create an imperative for corporate organizations to seek compliance with
societal expectations beyond those expressed by the edicts of legislatures
and courts. Structure for the discussion is provided by the authors eluci-
dation of seven CSR legal principles:1 (1) Integrated, Sustainable Deci-
sion-Making; (2) Stakeholder Engagement; (3) Transparency; (4) Consis-
tent Best Practices; (5) Precautionary Principle; (6) Accountability, and;
(7) Community Investment. These principles provide a categorical context
to the authors discussion of the many multilateral initiatives and private
regulatory frameworks, as well as legislative and regulatory interventions
and propositions that have been created in the name of CSR. In addition
to the useful assemblage of existing CSR-related hard and soft law fal-
ling under each of the seven principles, the authors also bring together a
diverse academic literature spanning business ethics, stakeholder man-
agement theory, corporate law, and regulatory theory.
The authors formulate a thesis (seemingly in two parts) of how CSR
ought to be viewed from a legal perspective: as a stakeholder-oriented
form of lex mercatoria (customary commercial law), and as a form of en-
forced self-regulation in the shadow of the law.2 As the duality of the the-
1 Michael Kerr, Richard Janda & Chip Pitts, Corporate Social Responsibility: A Legal
Analysis (Markham, Ont: LexisNexis, 2009) at 91.
2 Ibid at 420, citing Ian Ayres & John Braithwaite, Responsive Regulation: Transcending
the Deregulation Debate (New York: Oxford University Press, 1992) (enforced self-
regulation); ibid, citing Robert H Mnookin & Lewis Kornhauser, Bargaining in the
Shadow of the Law: The Case of Divorce (1978) 88:5 Yale LJ 950 (shadow of the law).
484 (2011) 56:2 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
sis suggests, the authors struggle at times to find definitive conceptual
anchors for their subject. Far from being evidence of a shortcoming in the
authors work, it is instead evidence of the uncharted legal territory into
which this book ventures.
Reflecting this novelty, a significant amount of consideration is given
to the existential question of CSR as a legitimate field of study for lawyers
and legal theorists. The text anticipates the criticism that CSR, by nature,
is voluntary and therefore lacks the quality of obligation necessary for
law. To tackle this question, and indeed to justify their endeavor to the
reading audience, the authors point to the empirical facts of corporate ad-
herence to normative frameworks generally referred to as CSR and to the
proliferation of CSR standards, multilateral frameworks, and conscious-
ness amongst corporate actors, non-governmental organizations, and gov-
ernments alike. In light of such trends, the characterization of CSR as a
purely voluntary concept is misleading. If one can conclude that CSR
and related social expectations are perceived, internalized into corporate
self-governance, and consistently acted upon or at least referred to as
standards of corporate behavior, then the question of whether CSR
ought to be so viewed is practically immaterial. The focus of the authors
moves beyond those increasingly (practically) irrelevant arguments, to-
wards a consideration of the much broader and more fascinating question
of how the phenomenon generally referred to as CSR should be under-
stood by the legal practitioner.
But even getting past such inhibitions, the authors face the daunting
task of defining a very elusive topic, which lacks clearly defined content
and defies simple explanation. These challenges may, unfortunately, dis-
suade a significant portion of the books intended audience from giving the
text and its contents serious consideration. Lawyers in private practice
may well view the book as lacking authoritative insights into the law as it
is conventionally understoodas a series of black-letter edicts of govern-
ment and governmental authorities. Conversely, the book may be over-
looked by business theorists (considering issues of CSR from an ethical or
organizational behavior perspective) who may find the discussion too le-
galistic to be useful. To this reviewer, both conclusions would be unfortu-
nate and short-sighted. This text makes a valuable contribution to the
academic literature on CSR and indeed to the fields of legal and business
theory more generally.
Certainly, a legal analysis of CSR will force the lawyer to move beyond
a search for authoritative sources of law towards a more nuanced under-
standing of law as part of a complex, over-lapping, and hierarchical set of
social expectations that affect social actors including corporations and
their agents. Far from being an indulgence, such an evolution in thinking
is much needed in order to align the thought processes of legal counsel
with the real dilemmas faced by their business clients. With businesses
BOOK NOTE ~ RECENSION SIMPLE 485
operating in often competing and overlapping normative frameworks,
preservation of corporate legitimacy, and the ever essential social license
to operate necessitates consideration of more than black-letter law. These
are imperatives that sophisticated corporate actors do not take lightly. To
comprehend this reality, a perceptual adjustment on the part of the legal
practitioner may be necessary, not only to truly understand this book, but
also to prevent the obsolescence of the legal practitioner as strategic advi-
sor to business in a globalized world. The strategic problems posed by
CSR are real for the businesses that grapple with them. If private practi-
tioners of law are unable, or unwilling, to provide guidance that takes
these issues into consideration, then corporate clients will simply look
elsewhere for support and advice. The proliferation of CSR consultancies
staffed by accountants and management advisors with little or no legal
training suggests this has already occurred.3 Practitioners of law inter-
ested in staunching this trend and preserving a role of strategic impor-
tance within corporate management structures would be well advised to
give this book a close read.
As the authors illustrate well, CSR and law are not mutually exclusive
but are in fact intrinsically interrelated concepts. CSR emerges from a
complex network of social expectations, through the interplay of hard law
legislation and jurisprudence, constantly evolving customary and soft law
norms, international best practice standards, private regulations, and di-
rect contract-like understandings between corporations and their stake-
holders. All of this takes place in the shadow of state powers that have the
capacity to introduce new hard law and regulation if corporate actors fail
to act reasonably and meet legitimate societal expectations. Comprehen-
sion and navigation of such a complex web of rules and expectations is
squarely within the competence of legal theorists and practitioners, and
cannot be fully understood as simply a branch of ethics or organizational
behaviour. While those other fields are undoubtedly important in their re-
spective spheres, the legal analysis offered by this text should be viewed
as a valuable contribution to the interdisciplinary field of CSR.
The value of the text will likely not be lost on corporate in-house legal
counsel attempting to understand and implement a CSR agenda. Such
persons will not be inhibited by the existential question of whether CSR
ought to be considered from a legal perspective. For them, that question
will be rendered moot once the decision has been made to take a CSR-
cognizant approach to corporate governance. What will be of more rele-
3 Take for example the Corporate Sustainability consultancies established by the Big
Four accounting firms, which generally neither promote nor offer legal advice in these
areas.
486 (2011) 56:2 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
vance for such persons will be: (1) what a CSR mandate should entail, and
(2) how it should be carried out?
The book and its seven principles will be most helpful in response to
the first question. The internalization of a CSR mandate; initiation of con-
scious stakeholder engagement; development of reporting and transpar-
ency processes; implementation of best practices beyond compliance with
minimum legal expectations; development of review, auditing, and ac-
countability systems, and; defining the appropriate role of community in-
vestment within the scope of CSR are helpfully discussed in the text and
will be essential high points of any serious CSR program.
But once these areas are identified and generally understood, the text
will be of more limited value in discerning the substantive content of CSR.
The books overview of best practices and the more substantive aspects of
CSR are cursory in nature. While the book provides good direction on
where to possibly look for substantive content of CSR expectations (aca-
demic literature, best practices, some regulatory and legislative initia-
tives) it is not at all comprehensive in describing what compliance with
CSR expectations actually looks like. For example, little more than two
pages is accorded to a discussion on what integrated sustainable deci-
sion-making would entail in practice, with the remainder of that section
focusing mostly on whether the corporate law concept of fiduciary duty is
an inhibitor or facilitator of CSR.4 The sections on Stakeholder Engage-
ment and CSR-related Transparency provide good overviews of the ex-
isting standards and initiatives in these areas; however, the discussion
tends toward a general and high-level summary of developments, with
very little critical analysis. The idea of Consistent Best Practices is dis-
cussed as an emerging area of international customary expectation, but
its content and parameters are for the most part left undefined or only
discussed in generalities. The chapter on CSR-related Accountability
outlines the major US tort law, international voluntary frameworks, and
emerging transnational monitoring mechanisms that relate to CSR, and
provides an interesting discussion of how CSR accountability can be un-
derstood as a form of enforced self-regulation in the shadow of the law.
However, it is difficult to discern from that discussion how these concepts
are really tied together from a legal perspective, and how legal practitio-
ners can and ought to use CSR as a conceptual framework in the provi-
sion of advice or advocacy. In all, the reader comes away with a sense that
4 Ibid at 156-58.
BOOK NOTE ~ RECENSION SIMPLE 487
perhaps CSR has not yet coalesced as a legal concept that can usefully in-
form legal analysis of contemporary business problems.5
The authors appear to resist this conclusion by focusing on empirical
developments and speaking of CSR as a current reality. That approach
leads to a helpful compilation of legal developments, which are undoubt-
edly linked to the concept of CSR. Indeed, CSR is a reality, at least for the
business community. It is still, however, a very new and theoretically dif-
ficult subject for lawyers. The uncertainty of CSR as a field of legal study
forces the authors to provide theoretical clarity to the discussion through
their two innovative theses. But their theoretical afterthought is inevita-
bly inadequate. One cannot help but wonder if the practical analysis of-
fered by the authors, though very good, is an example of the cart being
put before the proverbial horse in the absence of a clear exposition of the
theoretical underpinning of their topic.
Offering a theoretical definition of CSR begs the question, should CSR
be understood as a legal obligation? If so, how do we deal with the fact
that there is no single authoritative source that promulgates CSR
obligations? In the absence of clearly defined authoritative sources, how
do we identify the substantive content of CSR? More practically, how can
and should legal practitioners use and apply CSR in a legal context? How
do companies identify stakeholder audiences for engagement? How should
corporate actors choose between conflicting legitimate interests? What
happens when CSR expectations conflict with hard law? How will
corporate actors defend their CSR management practices if challenged?
These questions, which force consideration of what CSR actually means,
are much more complicated than the yes-or-no question of whether CSR is
permissible at law. The authors rightly succeed in putting aside that
banal and practically irrelevant question. They also succeed in creating a
very useful and thought provoking conceptual framework that helps
define CSR as a legal field of study. However, they do not provide a strong
theoretical foundation to explain how a CSR concept should be identified
in the course of advice or advocacy as an obligation that can guide or
justify corporate behaviour. Indeed, much work remains to be done if the
empirical reality of CSR
is to be reconciled with conventional
understandings of law and legal obligation. While it is not a panacea for
those of us craving answers to these questions, Corporate Social
5 But see David Weissbrodt, Book Review of Corporate Social Responsibility: A Legal
Analysis by Michael Kerr, Richard Janda & Chip Pitts (2009) 32:1 Hum Rts Q 207 at
208.
488 (2011) 56:2 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
Responsibility: A Legal Analysis nevertheless provides a wonderful start
and is highly recommended by this reader to forward-looking and
innovative lawyers everywhere.
Michael Torrance*
* Lawyer with Ogilvy Renault (Norton Rose Group), Toronto. Co-founder of the firms
Corporate Responsibility & Sustainability practice group. Other practice areas include
employment and labour, human rights, corporate governance, and international stan-
dards of corporate responsibility affecting project finance, corporate finance, corporate
reporting, and global business practices.
