Rethinking Meaningful Stakeholder Engagement: Simplifying Complexity with Legal Design

Metin Ebru ()
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Metin Ebru: Early Career Researcher, Tallinn University of Technology School of Business and Governance, Department of Business Administration, Tallinn, Estonia

European Studies - The Review of European Law, Economics and Politics, 2024, vol. 11, issue 2, 87-114

Abstract: The evolving regulatory landscape mandates companies to engage stakeholders meaningfully as part of their due diligence obligations to identify, prevent, and mitigate adverse human rights and environmental impacts. However, regulatory complexity, information asymmetries, and power imbalances often hinder effective engagement, creating barriers to participation, comprehension and trust-building. As businesses navigate these challenges, there is a growing need for innovative approaches that make legal obligations more accessible, understandable, and actionable. This paper explores how legal design principles can enhance meaningful stakeholder engagement mechanisms, with a particular focus on the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD). Article 13 of the CSDDD introduces strict requirements for ongoing, inclusive, and informed engagement with affected stakeholders, yet its implementation remains complex due to the abstract nature of legal provisions and the diverse contexts in which they apply. This conceptual and transdisciplinary study synthesizes insights from a comprehensive review of literature across legal design, business and human rights, and stakeholder engagement fields. It develops a framework that aligns legal design principles with the stakeholder engagement requirements of the CSDDD, illustrating how techniques such as plain language, visual aids, and participatory design can foster inclusive participation, bridge communication gaps and build trust. The framework emphasizes the importance of clarity, accessibility, and co-creation in corporate sustainability practices. This paper offers a new perspective on the dynamic relationship between legal design and corporate sustainability, proposing innovative tools and strategies that can improve communication and collaboration between businesses and their stakeholders.

Keywords: Legal Design; Meaningful Stakeholder Engagement; Corporate Sustainability; Business and Human Rights; Regulatory Complexity (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:eurstu:v:11:y:2024:i:2:p:87-114:n:1005

DOI: 10.2478/eustu-2024-0018

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