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In principle, ISR can serve the interests of participating companies, regulators and other stakeholders.

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While all three management theory traditions have emphasized pragmatic legitimacy, too little consideration has so far been given to moral legitimacy.

The paper enriches theory on the moral legitimacy of ISR by mapping Suchman’s () three bases for moral legitimacy—consequential, procedural and structural legitimacy—against management theory traditions.

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wiki How is a “wiki,” similar to Wikipedia, which means that many of our articles are co-written by multiple authors.Despite theoretical and practical enthusiasm for ISR, questions remain about its legitimacy.Mounting empirical evidence suggests that all too often industry-led schemes do not lead to positive social benefits or fix the problems that they are designed to solve (King et al. Recent scandals on mislabelled horsemeat in food supply chains, privacy in the self-regulated newspaper industry, and the fatal collapse of the BSCI-certified Rana Plaza factory in Bangladesh have fed popular scepticism that ISR is tantamount to firms “marking their own homework”.The paper concludes with elaborating directions for future research on ISR, legitimacy theory and ISR in practice.).ISR is “a regulatory process whereby an industry-level, as opposed to a governmental- or firm-level, organization…It identifies tensions between the pragmatic and moral legitimacy of ISR schemes, which the current ISR literature does not address, and draws implications for the future theory and practice of ISR.Proponents have argued that ISR can achieve public policy objectives at lower cost than government regulation because regulatory decisions are made by those with the best information and expertise to make them (Coglianese and Mendelson ).In response, this paper explains how current management theory on ISR has failed to separate the pragmatic legitimacy of ISR based on self-interested calculations, from moral legitimacy based on normative approval.The paper traces three families of management theory on ISR and uses these to map the pragmatic and moral legitimacy of ISR schemes.It maps what we know about the legitimacy of ISR schemes from management theory, shows where previous research from different traditions has focused, and uses this to explore blind spots, tensions and future directions on the legitimacy of ISR.Explaining how and why the evaluation of ISR schemes differs so much between theorists is a vital step towards improving the performance of ISR schemes in practice.


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