As an academic partner in Alcoa Foundation’s Conservation and Sustainability Fellowship Programme, the London School of Economics and Political Science (LSE) is undertaking research about the relationship between corporations and sustainable development, with the intention of promoting the development of good governance. This research is based on the recognition that corporations shape the relationships between environment, economy and society in many ways.

Although notions of sustainability are hotly contested, it is generally accepted that corporations have the potential to make an invaluable contribution to broader patterns of sustainable development. However, their ability to fulfil this potential depends to a significant extent on the ways in which they are governed – indeed, debates on governance for sustainability and what might constitute ‘good governance’ have risen to the fore in recent years. These debates help us to recognise that corporate activities are typically governed through a diverse and often complex range of social processes and institutions. The prospects for a shift towards a more sustainable form of economic development therefore depend upon the emergence of governance patterns that create cultures, establish incentives and, where necessary, enforce imperatives.

Within the LSE/ Alcoa Foundation Fellowship Programme, we are focusing on two related and interconnecting forms of governance.

The first is concerned with governance within firms, for example in the relationship between owners, managers and employees, and in the decision-making structures, management systems and accountability frameworks that guide their activities.

By contrast, the second is concerned with the governance processes that exist around firms, for instance through the web of relations between a firm and those governmental and non-governmental actors with an interest in its activities. There is great diversity in the practice and experience of governance both within and between these different settings and, potentially, there is much to be gained from transferring patterns of ‘good governance’ from the leaders to the laggards.

Informed by ideas of organisational learning, the programme research is addressing the emergence of new governance mechanisms within, between and around corporations, considering roles played by governments, markets and civil society, as well as by the companies themselves. Both programme fellows and sustainability cabinet members are, within this broad theoretical perspective, pulling together what has tended to be fragmented scholarship on firms (risk analysis and technology transfer), governments (policy learning) and civil society (capacity-building and standard-setting).

This synthetic approach is advancing understanding on the preconditions for particular governance processes in different national, sectoral and branch-level contexts: its policy implication is the identification of ways in which the diffusion of best practice might take place.