Week 3

Question 1

What is corporate governance?

Answer 1

Cooperative rule making by firm and or civil society organizations with little or no direct involvement of governmental institutions

Works though the market not public relations

Question 2

How did corporate governance grow so big?

Answer 2

• increasing power of businesses
• the void that the government left

Question 3

forms of corporate governance

Answer 3

• Corporate social responsibility reporting
• Condues of conduct
• Private standards

Question 4

Key characteristics of corporate governance (2)

Answer 4

• represent requirements relying on certifications and auditing
• rely on market forces and scrutiny to generate social benefits

Question 5

Types of private governance standards

Answer 5

• Business - led(regulation for mad cow’s)
• Civil society-led
• Multistakeholder

Question 6

Effectiveness of corporate governance (3 levels)

Answer 6

• Output: the standards and it characteristics
• Outcome: change in behavior of actors
• Impact: actual improvement in the problem area

Question 7

Output of corporate governance

Answer 7

• Stringency of the rules (how amibitous)
• Quality of the audit

Question 8

Outcome of corporate governance

Answer 8

• Standard uptake: to what extent are standards adopted
• Level of compliance: not only adoption but real action to do things

Question 9

3 levels of impact corporate governance

Answer 9

direct
indirect
cognitive

Question 10

Trade-off in setting standards

Answer 10

high/low stringency and high/low impact

Question 11

3 Direct strategies to improve impact

Answer 11

1. Reward top players
2. Reduce complexity
3. Improve relevnce for laggards

Question 12

Negatives of rewarding top players strategy

Answer 12

• Competition between local and global
• Tend to award bigger market leaders
• Price-premiums won’t always hold so smaller corporations will go broke

Backlash: USA not wanting to meet EU standards

Question 13

Indirect approach strategy

Answer 13

Orchestration: synergies between competing and overlapping objectives of actors

Question 14

Directive orchestration

Answer 14

Incorporate private standards and initiatives into regulatory frameworks (legality of verification)

Question 15

Facilitative orchestration

Answer 15

Provide financial, technical support and endorsement

Question 16

NSMD

Answer 16

non-state market driven: transnational private governance activities

Question 17

5 potential explanations from literture why NSMD does not lead to less forest deforestation

Answer 17

1. The insufficient coverage effect (strong)
2. The crop switching effect (weak)
3. The weak and fragemented effect (weak)
4. The perverse market incentive effect (weak)
5. The delayed impact effect (weak)

Question 18

Forum shopping

Answer 18

Producers that look at different certifications and take the least difficult one

Question 19

4 recommmendations to better use NSMD

Answer 19

• Subsidairies of firms seeking certification
• Partial certification
• Remote sensing and GIS data (more research)
• Jurisdictional approach: whole area needs to comply in order to get an certification

Question 20

Five conditions that are likely to determine effectiveness of TNO in fostering sustainability objectives

Answer 20

1. Problem structure
2. Stringency of standards
3. The quality of audit
4. Acces of relevant soietal actors to decision making venues and procedures –> enhances accountability and legitimacy
5. Uptake of standards by relevant actors

Question 21

Indicators used to evaluate stringency

Answer 21

• Detail
• Quantifiable targets
• Ambition
• Performance
• Management

Question 22

Indicators used to evaluate quality of the audit

Answer 22

• Third party auditing
• The auditing firm is accredited by independent organizations
• The standard requires 100% comliance with its rules
• The audit results are publicly available
• The standard includes severe sanctions in cases of non-compliance

Question 23

VSS

Answer 23

Voluntary Sustainability Standards: private standards that require products to meet specific economic, socal and environmental sustainability metrics

Question 24

2 pathways of VSS

Answer 24

Supply driven
Demand driven

Question 25

Resources of producers/farmers

Answer 25

- Consumer facing premiums - Philanthropic resources - Development assistance

Question 26

Mainstream paradox

Answer 26

Making a niche market mainstream most often decreases the values and norms which makes it not sustainable anymore

Question 27

NSMD governance and why it does not work for deforsestation (3)

Answer 27

- Voluntary rules - Multiple stakeholders - Difficult to find causality

Question 28

Pathways that could improve effectiveness of TNO (3)

Answer 28

- Maintenance of the multi tier system (less complexity) - Standards may converge - Standards operating at national level instead of global

Question 29

Results effectiveness aquaculture and fisheries

Answer 29

- Tension, unceratinty, weak and fragemented, not taxation, low consumer awareness - variaty of stringencies - variaty of auditing quality - discrimination in access - modest uptake

Question 30

low outcome of VSS due to the producers

Answer 30

- lack of knowledge - lack of resources mainstream paradox

Question 31

Trade-off VSS

Answer 31

High standards + high premium = low uptake Medium standards + medium premium = medium adaptation High standards and facilitating help, however, due to insufficient producer capacity there is still an implementation gap