(P25) Reputation and Disclosure as Governance Mechanisms
Judith van Erp, Professor, Utrecht University School of Governance
Yongkang An, Post-doc Researcher, Zhejiang University Guanghua Law School
In contemporary processes of regulation and governance, informal instruments other than command-and-control have gained popularity. There is also a general belief and even excitement with regard to the possibilities of control through informal accountability exercised by NGO’s, social activism, media. The underlying mechanism here is reputation: businesses wish to stand out and draw competitive advantage from having a reputation for quality or social responsibility; while fear of losing their reputation makes them behave more responsibly.
Reputational social control is activated through a variety of instruments: transparency obligations; citizen’s rights to access information; certification; regulatory disclosure of business performance, or naming and shaming by NGOs. Governance actors and regulators in different countries and areas have followed different approaches to the measure of disclosure and to the mechanism of reputation.
Reputational social control is studied in several disciplines, most prominently economics, law, and criminology, and through various methods. For example, law and economics scholars have been concerned with calculating the size of reputational sanctions versus legal sanctions; regulatory scholars have studied the effectiveness of regulatory disclosure and access to information; social movements scholars have studied the strategies of NGOs; CSR scholars the impact of transparency on corporate behaviour, and criminologists have studied corporate resistance to negative publicity.
This panel aims to bring various strands of research together to understand the power, dynamics and ambiguities in reputational social control, and its impact on business behaviour. Papers could address the way that regulators and governance actors deploy reputational instruments such as disclosure or shaming: the content, form, channel, etc. of disclosure. Papers could also discuss how stakeholders perceive and respond to these measures, including and to what extent they generate pressure on the regulatees in question and how these respond.