Multi-stakeholder standard-setting organizations, or multi-stakeholder initiatives (MSIs), are part of a wider political push to introduce multi-stakeholderism as a legitimate component in global governance. However, they are not sufficiently democratic or accountable to external constituencies to warrant their status or standing as global governance tools.

Understanding the different types of MSIs: standard-setting, policy-setting and project-delivery 

There are actually two distinct forms of MSI. One sub-class focuses primarily on enhancing social, environmental, and community goals through setting global market standards, and secondarily, on balancing these concerns with its management of conflicts between firms and sectors in a given “socially responsible” global market. The other sub-class of MSI reverses these priorities. In the case of internet governance, for example, the primary focus of the standard-setting activity is managing inter-corporate and inter-sub-sector battles, while the secondary focus is responding to calls for social access, enhanced privacy, and discounted pricing for marginal communities.  

Beyond standard-setting MSIs, there are two other forms of multi-stakeholder global governance arrangements: (1) multi-stakeholder bodies that develop global policy directions; and (2) multi-stakeholder consortia which implement specific geographically and time-limited projects. 

On the policy front, for example, one can look at the World Economic Forum with its effort to set global policy via their Global Future Councils, or their “offer” to take leadership of work areas traditionally occupied by the United Nations like food security and biodiversity, and their new strategic partnership agreement with the Office of the UN Secretary-General. These policy-oriented multi-stakeholder arrangements convene, usually under the leadership of a corporate body, a combination of market-oriented government figures, friendly civil society organizations, academic specialists, and corporate executives eager to develop a public policy consensus within a global market system. 

Public private partnerships are an example of project-delivery multi-stakeholderism. They bring together separate categories of actors but, rather than setting standards, they seek to deliver a specific public good or service while effectively gaining a degree of governance over a specific population. 

These three types of multi-stakeholder arrangements—standard-setting, policy-setting, and project-delivery—reflect the diversity of forms of multi-stakeholderism in practice and in theory. They represent a drive to shift global governance away from multilateralism and one-country-one-vote toward a multi-stakeholder form of global governance. 

The (un)democratic character of multi-stakeholderism 

In my view, the state of democracy in the MSI world needs to be evaluated on at least four grounds: (1) its internal rules to manage the imbalance of power between the different types of MSI board members; (2) an assessment of the legitimacy of MSIs’ impact on the wider world; (3) the effectiveness of its anti-conflict of interest policies; and (4) their claims to legitimacy through democratic language. This blog looks at the last evaluation criteria. 

The advocates of multi-stakeholderism have described MSI undertakings as good examples of “inclusive governance,” “participatory governance,” and “stakeholder governance.” The choice of these expressions says a lot, unintentionally, about their perceptions of democracy. 

“Stakeholder governance” depends first and foremost on an agreed, unambiguous definition of “stakeholder” or an agreed, unambiguous procedure to select said stakeholders. But as I have argued in other writings, there is no clarity about the definition of “stakeholder” or the procedure to designate stakeholders. Each multi-stakeholder group defines the term “stakeholder” in its own way. For example, a given MSI could “count” a female Moroccan miner as a worker, a representative of Africa, a feminist, a Black person, a representative of mothers, a representative of developing countries, or one of the innumerable possible combinations of these categories. If “stakeholder governance” is legitimately going to govern a specific sector, then in the selection process of the decision-makers in a multi-stakeholder group, it needs to be demonstrably clear how all relevant stakeholders are designated and that no key “stakeholder” is excluded. Further, it must be clear that an MSI has not weighted the balance of one type of stakeholder, particularly those with significant political or economic power, over other types of stakeholders—that  “stakeholder governance” credibility is not afforded to MSIs that group mining owners, mining brokers, and mining refiners with the female Moroccan miner, despite clear power differentials. The democracy claim for stakeholder governance is fundamentally undermined by the political flexibility of the key “stakeholder” term.    

“Inclusive governance” rests on the language of inclusiveness, which started out as a critical term.  Its objective was to seat members of politically weaker communities, such as those from marginalized communities, alongside all those whose presence has traditionally been at the table: members of the elite, corporate executives, academic experts, white people, males, etc. Over time these powerful actors began to feel the heat of those who were pressing to be included in major decisions that affect their lives. Rather than face public denunciations about operating exclusive organizations, the powerful began saying that they too wanted to be “included” in the decision-making groups and organizations. The linguistic beauty of this move is that it was not possible to say anyone was “excluded,” but the power imbalance would remain intact. This sleight of hand manages to keep the more powerful traditional forces in charge while appearing to be more open to marginalized communities.  

“Participatory governance” is another rather brilliant linguistic device that attempts to legitimize the selection of actors in an MSI. One can “participate” in a million ways. In traditional democracy, one can participate by joining political parties, by volunteering to distribute leaflets, by writing a letter to the editor, or by attending a public hearing. Note that none of these forms of participation have any necessary connection to power or real world decisions. In the case of multi-stakeholder governance, the same is true. Some MSIs have a “participatory” system of advisory bodies to a central decision-making committee, a “participatory” online public comment process, or a “participatory” system for non-voting formal statements to a plenary.  Even in MSIs where politically marginal social movements are “represented” in the decision-making body of an MSI, the voluntary nature of MSI compliance means that they are not “participating” in governing their global economic sector.  

Additionally, internal power depends on having the time to participate, the financial ability to participate, and the technical knowledge to participate meaningfully. Each of these three factors are unequally held by different potential MSI participants. If there were to be an equitable internal power balance within any “participatory,” “inclusive,” and “stakeholder” governance system, some external, non-self-interested actor would have to underwrite the time, expenses, and technical resources for all the non-corporate and non-externally funded participants—a reality that has not even been considered by any current MSI: whether standard-setting, policy-setting, or project-delivery.

Examining the use of language of democracy and of inclusion is just one ground on which to challenge multi-stakeholderism in global governance. Indeed, we might see multi-stakeholderism as a linguistic cloak for those who actually desire to institutionalize a corporate position in setting global policies and standards while keeping the profit-focused corporate structure in place. A serious reflection is needed to assess this shift and push for truly democratic global governance.

Harris Gleckman is Senior Fellow at the Center for Governance and Sustainability, UMass-Boston and Director of Benchmark Environmental Consulting. He is the former Chief of the NY Office of UNCTAD and Chief of the Environmental Unit of the Centre on Transnational Corporations. His latest book: Multistakeholder Governance and Democracy : A Global Challenge was published by Routledge in 2018. He is also the author of the Wikipedia page on multi-stakeholder governance, now translated into four other languages. This entry is part of a joint blog series, Rethinking MSIs, by the International Human Rights Clinic and MSI Integrity. The series will critically examine the role and value of MSIs in business and human rights; it coincides with a new report, “Not Fit-For-Purpose,” which compiles experience and insights over the last decade and explores cross-cutting trends and lessons learned about MSIs, as a field, from a human rights perspective. Read the introduction to the series by Amelia Evans and Tyler Giannini now on our blog.