Informational Regulation in France

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Informational Regulation in France

  1. 1. FRANCE’S MANDATORY “TRIPLE BOTTOM LINE” REPORTING: AN INFORMATIONAL REGULATION APPROACH TO SUSTAINABLE DEVELOPMENT M. L. Egan, F. Mauléon , D. Wolff, & M. Bendick, Jr. Second International Conference of the International Center for Corporate Accountability, New York June 27, 2007 Contact: M. L. Egan, bendickegan@mindspring.com
  2. 2. TOPIC <ul><li>IN 2001, FRANCE PASSED NOUVELLES RÉGULATIONS ECONOMIQUES (NRE), BECOMING THE FIRST COUNTRY TO MANDATE “TRIPLE BOTTOM LINE” REPORTING FOR FIRMS </li></ul><ul><li>OUR PAPER APPLIES SOCIAL NETWORK THEORY & FIRMS’ INITIAL REPORTING BEHAVIOR TO PREDICT THE NRE’s POTENTIAL IMPACT AS AN INSTRUMENT OF INFORMATIONAL REGULATION (IR) </li></ul><ul><li>IR RELIES ON STAKEHOLDERS TO EXERT PRESSURE ON FIRMS TO ADOPT SD THROUGH MARKET DYNAMICS, PRIVATE LITIGATION OR MORAL SUASION </li></ul>
  3. 3. NRE– QUICK FACTS <ul><li>APPLIES TO 700+ FRENCH PUBLICLY- TRADED FIRMS </li></ul><ul><li>REPORTING TOPICS: ENVIRONMENT, FINANCIAL, & SOCIAL (HR & COMMUNITY) ACTIVITIES </li></ul><ul><li>QUALITATIVE & QUANTITATIVE REPORTING REQUIREMENTS </li></ul><ul><li>ANNUAL PUBLIC REPORTING, 2002 FIRST YEAR </li></ul>
  4. 4. STRATEGIC CONTEXT FOR NRE <ul><li>SUSTAINABLE DEVELOPMENT (SD) IS ENTERING MAINSTREAM EU PUBLIC POLICY & “ETHICAL CUSTOM” OF BUSINESS </li></ul><ul><li>FRENCH FIRMS WERE LAGGING IN SD – THROUGH NRE, FRENCH GOVERNMENT SOUGHT TO PUSH FIRMS TO “CATCH UP” & LEAD COMPETITION </li></ul><ul><li>THE NRE CONSCIOUSLY TAKES A SYSTEMS APPROACH TO SD </li></ul><ul><li>STAKEHOLDER FOCUSED: INCREASE INFORMATION TO STAKEHOLDERS </li></ul><ul><li>PRIOR EMPIRICAL RESEARCH CONCLUDED THAT INFORMATIONAL REGULATION WORKS FOR SOME ENVIRONMENTAL GOALS </li></ul>
  5. 5. DOES THE NRE SUPPORT IR TO ENCOURAGE SD IN FIRMS? <ul><li>OUR STUDY EMPIRICALLY COMPARES FIRMS’ NRE REPORTING BEHAVIOR TO 3 CONDITIONS THAT AFFECT IR’S ABILITY TO EMPOWER STAKEHOLDERS: </li></ul><ul><li>SUFFICIENT, TARGETED, & RELIABLE DATA; </li></ul><ul><li>DIALOGUE OPPORTUNITIES; </li></ul><ul><li>RESOURCES, INSTITUTIONAL STRENGTH & CHANNELS TO ACT ON THE INFORMATION IN A TIMELY & EFFICIENT MANNER </li></ul>
  6. 6. FINDINGS <ul><li>NRE ENGENDERED MORE REPORTING THAN WOULD HAVE OCCURRED IN ITS ABSENCE: </li></ul><ul><ul><li>DATA AVAILABLE & BETTER QUALITY </li></ul></ul><ul><ul><li>DIALOGUE OCCURRING </li></ul></ul><ul><ul><li>INSTITUTIONS DEVELOPED </li></ul></ul><ul><li>ALTHOUGH REPORTING INCREASED & IS BETTER QUALITY, EVIDENCE THAT BETTER REPORTING HAS PRESSURED FIRMS TO INCREASE THEIR SD-BEHAVIOR REMAINS FOR FUTURE STUDY </li></ul><ul><li>PROGRESS TOWARDS MEANINGFUL REPORTING & GREATER TRANSPARENCY COULD BE IMPROVED IF DEFICIENCIES (e.g. LACK OF ENFORCEMENT) IN THE LAW WERE CORRECTED </li></ul>
  7. 7. IMPLICATIONS <ul><li>FRANCE’S EXPANDED PUBLIC REPORTING IS BEST UNDERSTOOD AS A BOLD ATTEMPT TO ALTER FIRMS’ FUNDAMENTAL CONSCIOUSNESS -- NOT AS A TECHNOCRATIC MANAGERIAL REQUIREMENT </li></ul><ul><li>FRENCH EXPERIENCE IS A WAKE UP CALL TO U.S. FIRMS. US FIRMS LAG IN REPORTING -- RISK FALLING BEHIND FIRMS DEVELOPING SD-RELATED STRATEGIC COMPETITIVE ADVANTAGES & COMPETING IN MARKETS WHERE SD IS INCREASINGLY “EMBODIED IN ETHICAL CUSTOM” & PUBLIC POLICY </li></ul>

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