444 By Susan Ariel Aaronson and David Deese With a reaction by ...

seas. How should companies respond to these cross-pressures? Managers have no roadmap to balance these multiple issuesFinally, all companies juggle to meet both their shareholder obligations and theirstakeholder responsibilities. There is no one set model for responsible stakeholderpractice in the oil industry or the business community in general, (although there areoverlapping or common responsible practices required in some areas). But it isparticularly difficult for extractive industry firms.Extractive industry firms must go where the extractive resources are located. Asthe supply of energy has declined in the west, managers of these firms have increasinglysourced from countries where governance is inadequate and where corruption is endemic.Oil and gas production, like other extractive industries, is capital-intensive. Extractivefirms must make large investments long before they begin to produce oil or oil products.These firms are especially vulnerable to political, legal and social risk and in particular,corruption, given the huge sums involved.Oil and gas producers are often the largest investors in such countries andtherefore may hold substantial influence over the government. Although these firms areobligated to respect host government sovereignty, these firms are under mountingpressure to use their influence to change the behavior of host governments.151 However,because of that same clout, oil and gas investors could crowd out the voice of othermarket and political actors. Yet these same oil and gas companies are increasingly undershareholder and stakeholder pressure to act in a responsible manner. Yet what isresponsible is also “unclear.”448