The Role of NGOs in CSR: Mutual Perceptions Among Stakeholders Daniel Arenas Josep M. Lozano Laura Albareda ABSTRACT. This paper explores the role of NGOs in corporate social responsibility (CSR) through an analysis of various stakeholders’ perceptions and of NGOs’ self- perceptions. In the course of qualitative research based in Spain, we found that the perceptions of the role of NGOs fall into four categories: recognition of NGOs as drivers of CSR; concerns about their legitimacy; difficulties in the mutual understanding between NGOs and trade unions; the self-confidence of NGOs as important players in CSR. Each of these categories comprises the various elements analysed in the paper. We found some dis- crepancies between the perception of others and the self-perceptions of NGOs, which explains why their role is often controversial. The research confirms that sec- ondary stakeholders, such as NGOs, are key players in CSR, but their role is still regarded as controversial and their legitimacy contested. Deep-seated misunderstand- ings and mistrust among various stakeholder groups (particularly between NGOs and trade unions) are a possible hurdle to the integration of social and environ- mental concerns in business activity and corporate gov- ernance in Spain. The study finds that business managers need to take a less firm-centric and a more contextual approach, and look more closely into the relationship with and among stakeholder groups. For NGO managers, the research shows that NGOs are not always aware of the stereotypes they generate and the problems caused mainly by what is seen as ambivalent roles: critic and counsellor, accuser and judge, idealist and fund raiser. KEY WORDS: stakeholder engagement, CSR, NGOs, perceptions, legitimacy, trade unions Introduction In May 2008, Intermo ´n Oxfam, the Spanish NGO confederated to Oxfam International, gained the support of the owners of 82,000 shares and the investment fund Boston Common Assets to speak at Repsol YPF’s (Spain’s largest oil company) annual shareholders’ meeting. Intermo ´ n Oxfam condemned Repsol’s actions in relation to indigenous commu- nities, mainly in Bolivia and Peru. This example is the culmination of a process that began in the 1990s, with the sudden increase of NGO activism and engagement with corporations on issues such as child labour, sweatshops, human rights, sustainable devel- opment, oil pollution and tropical deforestation. The early forms of business-NGO relations were mostly Daniel Arenas is Associate Professor at ESADE Business School, Universitat Ramon Llull, where he is also the Head of Research of the Institute for Social Innovation. He is member of the EABIS management board and a member of EBEN. He recently co-authored two articles in the Journal of Business Ethics: Do Employees Care About CSR Pro- grams? (2008) and Exploring the Nature of the Rela- tionship between CSR and Competitiveness (available online). Josep M. Lozano is a professor at the Institute for Social Innovation, ESADE Business School (URL), and a co- founder of E ´ tica, Economı ´a y Direccio ´n (the Spanish branch of EBEN), a member of the international Editorial Board of Ethical Perspectives and Society and Business Review. He was a highly commended runner-up in the European division of the Beyond Grey Pinstripes Faculty Pioneer Award (2003), is the author of Ethics and Organizations. Understanding Business Ethics as a Learning Process (Kluwer, 2000) and co-author of Governments and Corporate Social Responsibility (Palgrave, 2007). Laura Alabareda is currently a Visiting Researcher at the Boston College Center for Corporate Citizenship. She has published several academic papers about CSR and ISR, and co-au- thored the book Governments and Corporate Social Responsibility (Palgrave, 2007). Previously she was Vis- iting Fellow at the Center for the Study of Globalization and Regionalization, University of Warwick, and researcher at the Institute for Social Innovation, ESADE. Journal of Business Ethics (2009) 88:175–197 Ó Springer 2009 DOI 10.1007/s10551-009-0109-x