Leader Fairness, Social Contract and Corporate Sustainability Performance

Henk Hadders, Joost Miedema

    Research output: Chapter in Book/Report/Conference proceedingConference contributionAcademicpeer-review

    Abstract

    The world badly needs organizations who harness private interest to serve the public interest and who accrue fair returns to shareholders, but not at the expense of the legitimate interest of other stakeholders. We need new principles for future corporate design and new strategic leadership for operational and intelligence processes to fulfill the basic needs of internal and external stakeholders, while maintaining and enhancing the stock of vital capitals on which humans (and their next generations) depend for their well-being. Corporate Sustainability Performance is seen as a function of: (1) the impact organizational operations have on the stock of vital capitals in the world, and (2) the capacity to learn and innovate in response to these impacts. Consequently, corporate sustainability measurement and reporting has to measure the actual outcomes and corresponding impacts on vital capitals and compare those with norms or standards of performance for what such impacts ought to be (McElroy 2008). Sustainability is not only about organizational activities; it's also about humans. Humans fulfill two roles in social systems, (e. g., organizations). There's an internal, instrumental role (e. g., as a worker), and the role of external stakeholder. Their relationships with the company can be seen as a social contract. The content of this contract specifies the company's duties and obligations to society, expressed in terms of the wellbeing of its relevant stakeholder groups, which need to be measured and managed. The duties and obligations of a company to help ensure the satisfaction and well-being of its stakeholders will be expressed in the form of normative principles and policies regarding what its impacts on vital capitals should be (cf. McElroy 2008). In this paper we present the conceptual reference model underlying our research with regard to the relationship of leadership fairness, the social contract and performance. It is our first step in exploring the question: "is high quality sustainability performance a function of its leader's fairness?" Leadership fairness is about distributive justice, procedural justice and interactional fairness. We look at leader effectiveness from a social psychological point of view and explore a new field of leadership fairness, linking justice theory with the theory of knowledge and innovation management, sustainability management, stakeholder management and performance management. Leadership is understood as (ethical) behavior of individuals from any hierarchical position vis-a-vis internal and external stakeholders.

    Original languageEnglish
    Title of host publicationPROCEEDINGS OF THE 5TH EUROPEAN CONFERENCE ON MANAGEMENT LEADERSHIP AND GOVERNANCE
    EditorsJ Politis
    Place of PublicationNR READING
    PublisherACADEMIC CONFERENCES LTD
    Pages46-52
    Number of pages7
    ISBN (Print)978-1-906638-54-2
    Publication statusPublished - 2009
    Event5th European Conference on Management, Leadership and Governance - , Greece
    Duration: 5-Nov-20096-Nov-2009

    Other

    Other5th European Conference on Management, Leadership and Governance
    Country/TerritoryGreece
    Period05/11/200906/11/2009

    Keywords

    • Leader fairness
    • corporate sustainability management
    • stakeholders
    • social contract
    • triple bottom line
    • performance measurement
    • PROCEDURAL JUSTICE
    • INEQUITY

    Cite this