Corporate citizenship and social
responsibility policies in the

United States of America
Mark Anthony Camilleri

Department of Corporate Communication, University of Malta, Msida, Malta
and Business School, University of Edinburgh, Edinburgh, UK

Abstract
Purpose – The aim of this case study is to outline relevant regulatory guidelines on environmental, social
and governance issues in the USA. This contribution includes a thorough analysis of several institutional
frameworks and guiding principles that have been purposely developed to foster corporate citizenship
behaviours.
Design/methodology/approach – A case study methodology involved a broad analysis of US
regulatory policies, voluntary instruments and soft laws that have stimulated organisations to implement and
report their responsible behaviours.
Findings – This contribution ties the corporate citizenship behaviours with the institutional and
stakeholder theories. The case study evaluated the US’s federal government, bureaus and its agencies’ policies
on human rights, health and social welfare, responsible supply chain and procurement of resources,
anticorruption, bribery and fraudulent behaviours, energy and water conservation practices as well as
environmental protection, among other issues.
Research limitations/implications – Past research may have not sufficiently linked corporate
citizenship with the corporate social responsibility (CSR) paradigm. This research reports how different US
regulatory institutions and non-governmental organisations are pushing forward the social responsibility,
environmental sustainability as well as the responsible corporate governance agenda.
Originality/value – This research critically analyses US policy and regulatory instruments including
relevant legislation and executive orders that are primarily intended to unlock corporate citizenship practices
from business and industry. It has also provided a conceptual framework for the corporate citizenship notion.
In conclusion, it implies that there are business and political cases for corporate citizenship.

Keywords Sustainability, Social responsibility, Environmental responsibility,
Corporate citizenship, Stakeholder engagement, USA CSR policy

Paper type Case study

Introduction
The US markets for labour and capital are fairly unregulated as there are low levels of
welfare state provisions (Kalleberg, 2013; Beaman, 2012). Consequently, many social issues
such as education, health care or community investment have traditionally been at the core
of corporate social responsibility (CSR) in the USA (Camilleri, 2016; Crane et al., 2013;
Welford, 2005). The CSR initiatives and the communicating activities within the areas of
philanthropy, stewardship, volunteerism and environmental affairs may not be treated as a
regulatory compliance issue in the US context. CSR is often characterised by the businesses’
voluntary societal engagements, as they are not obliged to undertake social and
environmental responsibility practices. Such laudable behaviours are also referred to as

The author thanks the editor of this journal as well as the three reviewers of this paper. Their insightful
advice was greatly appreciated.

The current issue and full text archive of this journal is available on Emerald Insight at:
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Sustainability Accounting,
Management and Policy Journal

Vol. 8 No. 1, 2017
pp. 77-93

© Emerald Publishing Limited
2040-8021

DOI 10.1108/SAMPJ-05-2016-0023

corporate citizenship (Fifka, 2013; Matten and Crane, 2005) that encompass responsible
behaviours that go beyond financial reporting requirements (Iyer and Lulseged, 2013). These
organisational behaviours are particularly evidenced in cause-related marketing,
stewardship initiatives, philanthropic and charitable contributions (Porter and Kramer,
2002; Varadarajan and Menon, 1988). In fact, US companies donate 10 times as much as their
British counterparts (Brammer and Pavelin, 2005) However, many of them may have lower
credentials on their environmental responsibility. The USA is consuming some 207 per cent
of its ecological capacity (Worldwatch, 2015), and the average US citizen uses 11 times as
many resources as the average Chinese and 32 times as much as the average Kenyan
(Worldwatch, 2015.). The USA was a net importer of 67 non-fuel minerals and metals out of
the 92 tracked by the US Geological Survey (2010). Nonetheless, the US policy makers handle
the contentious issues that are related to global warming or the use of genetically modified
organisms in food production quite differently than their counterparts (Doh and Guay, 2006).
In other parts of the world, the provisions of health care or the other matters pertaining to the
climate change have traditionally been considered in the realms of government’s
responsibilities. Therefore, corporate responsibilities for social and environmental issues
have become the object of codified and mandatory regulation in certain jurisdictions
(Camilleri, 2015). The larger firms rather than small- and medium-sized enterprises are the
leading actors and drivers of CSR engagement and sustainable behaviours.

In this light, this case study reviews the US regulatory policy and guiding principles on
environmental, social and governance issues (that are primarily intended for large
organisations). It includes a thorough analysis of the corporate citizenship policies of the
USA federal government, bureaus, agencies and non-governmental organisations (NGOs)
and makes specific reference to relevant legislation to substantiate the argumentation of this
contribution. The US regulatory instruments include federal legislation, state regulation,
formal accreditation systems and soft laws that stimulate businesses and large
organisations to implement and disclose the corporate citizenship activities to their
stakeholders. First, this paper provides a conceptual framework of the notion of corporate
citizenship as it draws reasonable comparisons with its related concepts. Second, it analysed
the findings of previous empirical studies that investigated how responsible organisations
were engaging in economic, legal, ethical and discretionary behaviours toward their
stakeholders. Third, it reviewed the US’s guiding principles on corporate citizenship and
human rights, labour and supply chains, anticorruption, energy and the environment, as well
as health and social welfare among other issues. This article provides an interesting
discussion on corporate citizenship practices, as it links this subject with the stakeholder,
institutional and legitimacy theories. Finally, this broad research implies that the
organisations’ ought to anticipate the regulatory pressures toward socially and
environmentally responsible behaviours. More importantly, it suggests that it is in their
interest to forge strong relationships with their diverse stakeholders.

The social responsibility and corporate citizenship concepts
Initially, the corporate citizenship term was typically used to describe the corporations as
social institutions. Therefore, this notion is rooted in political science, as it directs
corporations to respond to non-market pressures. Throughout the years, the corporate
citizenship agenda has been wrought from distinctive CSR theories and approaches. Carroll
(1979) attempted to synthesise the fundamental principle of social responsibility. He
explained the rationale behind social responsibility initiatives and went on to describe the
corporate responses to social issues. Businesses always had a commitment toward society,
as they are obliged to engage in economic, legal, ethical and discretionary (philanthropic)

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activities (Carroll, 1979). Therefore, corporate citizenship has potential to unlock significant
benefits to both business and society (Carroll and Shabana, 2010).

Sound environmental practices could be linked to improvements in economic
performance and productivity, operational efficiencies, higher quality, innovation and
competitiveness (Porter and Kramer, 2011). Hence, CSR can be strategic in its intent and
purposes (Basu and Palazzo, 2008; Burke and Logsdon, 1996). An integration of these
different perspectives has led to the definition of corporate citizenship. The conceptual
grounds to better understand the nature of corporate citizenship can be found in the bodies
of literature on CSR (Carroll, 1979), corporate social responsiveness (Clarkson, 1995),
corporate social performance (Wartick and Cochran, 1985; Wood, 1991; Albinger and
Freeman, 2000), the theory of firm (McWilliams and Siegel (2001)), stakeholder engagement
(Strand and Freeman, 2013) and other enlightened “self-interest” theories, as CSR could be a
source of opportunity, innovation and competitive advantage (Porter and Kramer, 2006).

For instance, CSR’s economic responsibilities include the obligations for businesses to
maintain economic growth and to meet consumption needs. The economic component of CSR
represents the fundamental social responsibility of businesses. Many firms produce goods
and services and sell them at fair prices. This will in turn allow them to make a legitimate
profit and to pursue growth. Legal responsibilities imply that businesses must fulfil their
economic mission within the extant framework of regulations and legal parameters. The
legal component recognises the obligation of the enterprise to obey the laws. However, it
could prove harder to define and interpret the ethical responsibilities of businesses. This
component is often referred to as a “grey area”, as it “involves behaviours and activities that
are not embodied in law but still entail performance that is expected of business by society’s
members” (Carroll, 1979, p. 30). The ethical responsibilities suggest that businesses ought to
abide by moral rules that define appropriate behaviours within a particular society. Another
category of corporate responsibility is related to discretionary, voluntary or philanthropic
issues. Corporate philanthropy is a direct contribution by a corporation to a charity or cause,
most often in the form of cash grants, donations and/or in-kind services (Kotler and Lee,
2005).

This category of social responsibility is totally dictated at the “discretion” of the
organisation, as there are no laws or codified expectations that guide the corporations’
activities (Rasche et al., 2013). “Discretionary responsibilities include those business
activities that are not mandated, not required by law, and not expected of businesses in an
ethical sense” (Carroll, 1979, p. 500). Practically, some examples, where organisations meet
their discretionary responsibilities, include when they provide day-care centres for working
mothers by committing themselves to philanthropic donations or by creating pleasant work
place aesthetics. Carroll (1991) described these four distinct categories of activity by
illustrating a “Pyramid of Corporate Social Responsibility”. His pyramid reflected the
fundamental roles that are expected by business in society. Figure 1 presents a graphical
depiction of Carroll’s Pyramid of CSR.

Eventually, Schwartz and Carroll (2003) suggested an alternative approach that is based
on three core domains (economic, legal and ethical responsibilities). The authors produced a
Venn diagram with three overlapping domains, which were later transformed to seven CSR
categories. This development was consistent with the relentless call on the part of the
corporations toward the business case for CSR (Carroll and Shabana, 2010; Carroll, 2016). In
a similar vein, Kotler and Lee (2005) demonstrated how a CSR approach had established a
new way of doing business that led to the creation of value (Wheeler et al., 2003; Porter and
Kramer, 2011) with a respectful and proactive attitude towards stakeholders (Strand and
Freeman, 2013).

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Corporate citizenship continues to receive specific attention, particularly by those facilities
that are operating outside their own domestic markets. At the same time, multinational
corporations (MNCs) have been (and still are) under pressure to exhibit “good corporate
citizenship” in every country or market from where they run their business. MNCs have
always been more closely monitored and scrutinised than the domestic firms. No doubt this
will continue to be the case in the foreseeable future.

Measuring corporate citizenship
Several empirical studies have explored the respondents’ attitudes and perceptions on
corporate citizenship or its related constructs. Very often, their measurement involved
quantitative analyses on organisational commitment toward responsible organisational
behaviours (Maignan et al., 1999; Edmondson and Carroll, 1999; Pinkston and Carroll, 1996;
Aupperle et al., 1985). The first research study that has used Carroll’s pyramid for CSR found
that the construct’s content validity and the instruments that assessed the categories were
valid, as there were four empirically interrelated, but conceptually independent components
of CSR (Aupperle et al., 1985). Recently, Carroll (2016) reiterated that these results were also
supported by Edmondson and Carroll (1999) and Pinkston and Carroll (1996). Other research
has focused on investigations of managerial perceptions of corporate citizenship rather than
focusing on corporate behaviours (Basu and Palazzo, 2008; Singhapakdi et al., 1995). A
number of similar studies have gauged corporate citizenship by adopting Fortune’s
reputation index (Fryxell and Wang, 1994; Griffin and Mahon, 1997; Stanwick and Stanwick,
1998), the KLD index (Fombrun, 1998; Griffin and Mahon, 1997) or Van Riel and Fombrun’s
(2007) Reptrak. Such measures expected the surveyed executives to assess the extent to

Figure 1.
Carroll’s pyramid of
CSR

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which their company behaves responsibly toward the environment and the community
(Fryxell and Wang, 1994).

Despite their wide usage in past research, the appropriateness of these indices still
remains doubtful. For instance, Fortune’s reputation index failed to account for the
multi-dimensionality of the corporate citizenship construct, as it is suspected to be more
significant of management quality than of corporate citizenship (Waddock and Graves,
1997). Fortune’s past index suffered from the fact that its items were not based on theoretical
arguments, as they did not appropriately represent the economic, legal, ethical and
discretionary dimensions of the corporate citizenship construct. Hunt et al. (1989)
investigated broad-based perceptions on the following:

• the extent to which employees perceive that managers are acting ethically in their
organisations;

• the extent to which employees perceive that their managers are concerned about the
issues of ethics in their organisations; and

• the extent to which employees perceive that ethical (or unethical) behaviour is
rewarded (or punished) in their organisation.

Other authors, including Webb et al. (2008), also explored the philanthropic values that were
related to socially responsible consumption and its measurement.

Pinkston and Carroll (1994) identified four dimensions of corporate citizenship, including
orientations, stakeholders, issues and decision-making autonomy. They argued that by
observing orientations, one may better understand the inclinations or the posturing
behaviours of organisations with respect to corporate citizenship. They argued that the
stakeholder dimension should better define to whom the organisation feels responsible, as it
could identify where the corporate citizenship issues are originating. Their decision-making
autonomy was believed to determine at what organisational level corporate citizenship
decisions are actually made. In a similar vein, Griffin and Mahon (1997) combined four
estimates of corporate citizenship:

(1) Fortune’s reputation index;
(2) the KLD index;
(3) the Toxic Release Inventory (TRI); and
(4) the rankings that are provided in the Directory of Corporate Philanthropy.

They admitted that their four measures did not necessarily track one another. Such findings
suggested that these indicators were not representative of the same underlying construct.
Their items could have not been sufficient to provide an overall understanding of corporate
citizenship.

Singh and Del Bosque (2008) adopted a multi-dimensional perspective on three domains,
including commercial responsibility, ethical responsibility and social responsibility. First,
they proposed that the commercial responsibility of businesses relates to their continuous
development of high-quality products and truthful marketing communications of their
products’ attributes and features among customers. Second, they maintained that ethical
responsibility is concerned with the businesses fulfilling their obligations toward their
shareholders, suppliers, distributors and other agents with whom they make their dealings.
Singh and Del Bosque (2008) argued that ethical responsibility involves the respect for the
human rights and norms that are defined in the law when carrying out business activities.
They hinted that respecting ethical principles in business relationships has more priority
over achieving superior economic performance. Their other domain, social responsibility, is

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concerned about laudable behaviours. The authors suggest that businesses could allocate
part of their budget to the natural environment, philanthropy or toward social works that
favoured the most vulnerable in society. This perspective supports the development of
financing social and/or cultural activities and is also concerned with improving societal
well-being (Singh and Del Bosque, 2008).

Social and environmentally responsible policies
The national governments are usually considered as the main drivers on CSR policy.
However, there are other actors within society, such as civil organisations and industry
(Camilleri, 2015). It is within this context that a relationship framework has been suggested
by Mendoza (1996) and Midttun (2005). It seems that at the time, there was a need for a deeper
understanding of the governments’ role and function in promoting CSR. Societal governance
is intrinsically based on legitimacy and interdependent stakeholder relations (Albareda et al.,
2007). The power relations between actors are often underestimated in the control of their
legitimacy process (Lawrence, 2008). Political perspectives on legitimacy highlight the
power relations between different actors as they propose environmental, social and
governance conditions for the business (Mena and Palazzo, 2012; Scherer et al., 2013; Vogel,
2005). There are different expectations and perceptions within each stakeholder relationship,
which will have to be addressed to develop an appropriate CSR policy (Camilleri, 2015).
Essentially, this relational approach is based on the idea that recent changes and patterns
affecting the economic and political structure may transform the roles and capacities of
various social agents (Albareda et al., 2008). These exchange relationships among different
actors and drivers are shaping CSR policy and communications. The exchange arena that is
depicted in Figure 2 is exemplified in the US government’s comprehensive approach to
providing support and guidance on areas of corporate conduct and sustainable behaviours.

Figure 2.
Actors and exchange
arenas

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The US secretary of state’s agenda is to ensure effective coordination and partnerships with
individual bureaus and offices to harness global economic tools that advance US foreign
policy goals on responsible initiatives. For example, the US Bureau of Economic and
Business Affairs (EB) leads a CSR team. Its primary purpose is to promote responsible
business practices and fostering sustainable development whilst building economic security.
This team provides guidance to US companies and their stakeholders to engage in corporate
citizenship. EB’s CSR team supports major areas of responsible corporate conduct, including
“good corporate citizenship”, “human rights”, “labour and supply chains”, “anticorruption”,
“health and social welfare”, “contribution to growth and development of the local economy”,
“innovation, employment and industrial relations”, “environmental protection”, “natural
resources governance” including the Kimberley Process, “transparency”, “trade and supply
chain management”, “intellectual property” and the “women’s economic empowerment”
among other issues. Most of EB’s corporate policies are drawn from the Organisation for
Economic Co-operation and Development (OECD) “Guidelines for Multinational
Enterprises” and from US national contact point for the guidelines (as explained hereunder).

Human rights, labour and supply chains
In 1998, the Bureau of Democracy, Human Rights and Labour (DRL) set up a Human Rights
and Democracy Fund (HRDF) to fulfil the bureau’s mandate of monitoring and promoting
human rights and democracy in the global context. The HRDF fund was designed to act as
the department’s “venture capital” fund for democracy and human rights issues, including
the promotion of democratic principles and personal liberties. Moreover, many US states are
continuously legislating to protect the human rights of individuals (including citizens,
immigrants and non-nationals) within their territories. For example, the state of California
has passed a bill (effective as of 1 January 2012) that mandated retailers and manufacturers
who generated more than $100,000,000 (in annual worldwide gross receipts) to disclose their
non-financial reporting. These entities are expected to report (in their financial statements)
how they are eradicating slavery and human trafficking from their direct supply chains
(Pickles and Zhu, 2013). Such programmes enable the USA to minimise human rights abuses,
to support democracy activists worldwide, to open political space in struggling or nascent
democracies and authoritarian regimes and to bring positive transnational change in society.
DRL’s important efforts have brought positive change as its funding of HRDF has grown
from $7.82m in 1998 to over $207m in 2010 (HRDF, 2015).

In parallel, an “Office to Monitor and Combat Trafficking in Persons” (TIP) works with
business leaders to prevent and stop human trafficking. TIP does this by advancing the
Luxor Guidelines, which focus on corporate policy, strategic planning, public awareness,
supply chain tracing, government advocacy and transparency to reduce forced labour in
supply chains. In 2015, TIP Office has awarded over $18m in grants and cooperative
agreements to combat human trafficking. This office continues to fund an emergency global
assistance project that provides services on a case-by-case basis for individuals that have
been identified as trafficked persons (TIP, 2015).

Currently, many NGOs and international organisations are working in tandem, as they
support 27 projects that address prosecution, protection and prevention of sex and labour
trafficking in different places around the globe (TIP, 2015). On the 28 October 2015, the
Partnership for Freedom in collaboration with the Department of State and four other federal
agencies launched “Rethink�Supply Chains: The Tech Challenge to Fight Labour
Trafficking”, an innovation challenge that calls for technological solutions that identify and
address labour trafficking in global supply chains for goods and services. The Partnership

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for Freedom has awarded $500,000 in prizes and services that are aimed to spur innovative
solutions to end human trafficking and to support victims of human trafficking in the USA.

The USA made human trafficking illegal in 2000, after which it started to publish annual
assessments of other countries’ efforts to tackle it. But, it has only slowly turned up the heat
on offenders within its borders. Australia and the UK have recently passed light-touch laws
requiring transparency in supply chains. This legislation required manufacturers and
retailers that earn global revenues above the $100m threshold to list their efforts on how they
are eradicating modern slavery and human trafficking from their supply chains. For the time
being, a firm can comply by simply reporting that it is doing nothing. But, it seems that few
corporations are willing to admit such a statement that will surely affect their CSR
credentials. Hence, this issue is forcing its way on to managers’ to-do lists. The ILO has
launched a fair-recruitment protocol which could be ratified by national governments. The
ILO’s intention is to cut out agents. In this light, TIP has partnered with Slavery Footprint to
provide online tools to initiate marketplace action and ongoing dialogues between individual
consumers and producers about modern slavery practices in supply chains (TIP, 2015).

Similarly, DRL continues to promote labour rights throughout the supply chain as it
enforces labour law and provides due diligence. DRL has also strengthened legal advocacy
that expanded livelihood opportunities for many individuals as it advanced multi-
stakeholder approaches. EB, in cooperation with DRL and other stakeholders, has
coordinated the US Department of State’s participation in the Kimberley Process to stem the
flow of conflict diamonds and to address their traceability across supply chains. In a similar
vein, President Obama has recently endorsed the US Dodd–Frank Wall Street Reform and
Consumer Protection Act in 2010. This act contained a supply chain sustainability provision
in the form of a Conflict Minerals law. In a nutshell, this law required SEC-regulated
companies to conduct third party audits on their supply chains to determine whether they
were procuring conflict minerals (including tin, tantalum, tungsten or gold) from the
Democratic Republic of the Congo. These SEC-regulated firms were mandated to create a
report detailing their due diligence efforts, as well as the results of their audits (which ought
to be disclosed to the general public and SEC). The chain of suppliers and vendors of these
reporting companies are expected to provide appropriate supporting information.

Good corporate citizenship and anti-corruption
The high-level, large-scale corruption by public officials that is also referred to as
kleptocracy can have a devastating effect on democracy, the rule of law and economic
development. The corruption undermines sound public financial management and
accountability at all institutional levels: It deters foreign investment in many countries, it
stifles economic growth and sustainable development, it distorts prices and undermines
legal and judicial systems (INL, 2006). Those who contribute to such corruption by paying or
promising to pay bribes or by giving other undue advantages to foreign public officials will
undermine good governance and alter fair competition. The USA has long led by example in
its enduring fight against corruption. Through its Foreign Corrupt Practices Act (FCPA) in
1977, the USA became the first country to criminally penalise its nationals and companies
that bribe foreign public officials in commercial transactions. In fact, the USA denies safe
haven to egregiously corrupt officials and other public figures as specified in the Presidential
Proclamation 7,750 (of January 2004). The United Nations Convention Against Corruption
has also provided a framework for international cooperation against corruption, including
preventative and enforcement measures. The US government has participated in drafting
U.N. legislative guide materials prior to its implementation and enforcement (INL, 2006). The
USA is also member of the OECD’s Anti-Bribery Convention, where EB represents the US

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Department of State within the OECD Working Group on Bribery in International Business
Transactions.

Health and social welfare
In the USA, public education was not considered as a social welfare activity, probably
because it is taken for granted, since its inception 125 years ago. On the other hand, public
health and vocational rehabilitation are not included within the Social Security Act but are
present in separate Federal laws. However, medical care and cash benefits have always been
provided under the workmen’s compensation laws. These laws cover work-injuries and
members of the armed forces and their dependents and veterans who are entitled to medical
care at public expense.

Interestingly, landmark reform on the Patient Protection and Affordable Care Act
(PPACA) and the Health Care and Education Reconciliation Act of 2010 (HR 4872) was
passed and enacted through two federal statutes. PPACA was signed in 23 March 2010. This
act which is also known as “Obamacare” provided the phased introduction over four years of
a comprehensive system of mandated health insurance with reforms that were designed to
eliminate “some of the worst practices of the insurance companies”, including pre-existing
condition screening and premium loadings, policy …