The relationship between CSR and leadership in the context of regulatory frameworks: Case studies of Mauritius and India

Abstract

Through a comparative study of attitudes towards corporate social responsibility in India and Mauritius, I explore the relationship between CSR and leadership in the context of regulatory frameworks. For this purpose, I draw on Matten & Moon’s distinction between explicit versus implicit CSR, and I relate this distinction to the ongoing debate over voluntary versus mandatory approaches to promoting CSR practices. I then explore the impact of these various approaches to CSR on the ability of organizational actors to exercise leadership in the promotion and implementation of CSR practices. On the basis of interviews with practitioners and secondary documents, I argue that mandatory CSR within a rigid regulatory framework reduces the potential and the incentives that organizational actors feel that they have to take a leading role with respect to CSR. I propose two solutions to this problem. First as suggested by Visser, governments should not regulate the sustainable business per se, but the issues that sustainable business is attempting to address (e.g. biodiversity loss, labor conditions, climate change, transparency). Second I present a model that leverages the best of both the mandatory and voluntary regimes of CSR by imposing a tax that funds initiatives administered by companies.