Corporate Responsibility for Economic,Social and Cultural Rights: Rights in Search of a Remedy?

It is no longer a revelation that companies have some responsibility to uphold human rights. However, delineating the boundaries of the relationship between business and human rights is more vexed. What is it that we are asking corporations to assume responsibility for and how far does that responsibility extend? This article focuses on the extent to which economic, social and cultural rights fall within a corporation’s sphere of responsibility. It then analyses how corporations may be held accountable for violations of such rights. Specifically, the article considers the use of soft law as a protective mechanism; it also details how victims of harmful corporate behaviour are using litigation (pursuant to ATCA and common law domestic causes of action) to seek redress and recognition of the harms they have directly or indirectly experienced. The article concludes with an analysis of Professor Ruggie’s (the United Nations Special Representative on the issue of transnational corporations and human rights) 2008 and 2009 Reports in which it is suggested that a respect-based framework must be interpreted as imposing proactive requirements on companies to prevent the infringement of human rights. Future efforts must also be directed towards the recognition of a specialised complementary corporate responsibility to protect human rights.     

“Minding Our Business”: What the United States Government has done and can do to Ensure that U.S. Multinationals Act Responsibly in Foreign Markets

The United States Government does not mandate that US based firms follow US social and environmental law in foreign markets. However, because many developing countries do not have strong human rights, labor, and environmental laws, many multinationals have adopted voluntary corporate responsibility initiatives to self-regulate their overseas social and environmental practices. This article argues that voluntary actions, while important, are insufficient to address the magnitude of problems companies confront as they operate in developing countries where governance is often inadequate. The United States can do more to ensure that its multinationals act responsibly everywhere they operate. First, policymakers should define the social and environmental responsibilities of global companies. They must consistently make their expectations for global business clear – and underscore that this objective can often be accomplished without mandates. Second, the US should closely examine the policies that undermine global Corporate Social Responsibility (CSR) and address the many conflicting signals sent by policymakers. Third, the President should make the US government a CSR model by examining how to use its purchasing power to promote human rights. Finally, the US government should require pension funds to report on the social and environmental consequences of their investments. In these ways, Americans can mind our business – and thus make sure that US based firms do not undermine social and environmental progress when they operate in the developing world. Susan Aaronson is Senior Fellow and Director of Globalization Studies at the Kenan Institute Washington Center, an arm of the Kenan-Flagler Business School, University of North Carolina Chapel Hill. Her scholarly research focuses on international investment and social responsibility issues. Aaronson devised and directed a study, funded by the Ford, UN and Levi Strauss Foundations, that examined how U.S. public policies can promote or undermine global corporate social responsibility. She is now beginning a Levi-Strauss funded project on trade and human rights. Aaronson is a frequent speaker on public understanding of globalization issues and the author of four books on globalization including, Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization (Michigan: 2001).     

Environmental Reporting of Global Corporations: A Content Analysis based on Website Disclosures

Today, more corporations disclose information about their environmental performance in response to stakeholder demands of environmental responsibility and accountability. What information do corporations disclose on their websites? This paper investigates the environmental management policies and practices of the 200 largest corporations in the world. Based on a content analysis of the environmental reports of Fortune’s Global 200 companies, this research analyzes the content of corporate environmental disclosures with respect to the following seven areas: environmental planning considerations, top management support to the institutionalization of environmental concerns, environmental structures and organizing specifics, environmental leadership activities, environmental control, external validations or certifications of environmental programs, and forms of corporate environmental disclosures.     

Toward a Model for International Business Ethics

This paper briefly examines the topic of business ethics and attempts to suggest a code of ethics for multinational firms. While most companies have basic policies on employee integrity, confidentiality and sexual harassment, relatively few have established policies regarding bribery, exploitive child labor, human rights violations and other issues they may encounter in the global market place (Drake, 1998). Until recently, very few companies had truly global operations. Consequently little attention was paid to the issue of ethical guidelines in a global context. Recent changes in international markets have led to an explosion of corporations with global operations, and the need for a global code of ethics has grown commensurately. In this paper we explore the issue of global business ethics and attempt to provide a framework for future discussion. We also examine some of the unique difficulties surrounding the development of any set of global business standards. Key among these difficulties is the issue of competing ethical values in home and host countries.     

Corporate communication,sustainability, and social media: It's not easy (really) being green

This empirical research explores how 16 global corporations from four different industry sectors—retail, technology equipment, food/beverage/tobacco, and consumer goods—use social media platforms and corporate social responsibility (CSR) reports to communicate about sustainability. Facebook, Twitter, CEO letters from annual reports and CSR/sustainability reports, and other company documentation are examined to compare the content and scope of these firms’ corporate communication. The sample is divided into two subsamples (Green and Not Green firms) using Newsweek's Greenest Company 2012 rankings, and compared for differential use of social media and corporate reports. Results show that communication varies across firm and industry regarding types of sustainability initiatives reported, metrics employed, and communication media utilized, and that Green firms are more active than Not Green firms both in addressing sustainability and in general social media activity. Implications are discussed herein and recommendations are presented for companies seeking to better understand the effective use of social media and sustainability communication.     

Challenging the ‘Million Zeros’: The Importance of Imagination for Business Ethics Education

A recent preoccupation in scholarly research is the capacity of firms in developing country industrial clusters to comply with international corporate social responsibility (CSR) policies and codes of conducts. This research is at an early stage and draws on several—often quite distinct—scholarly traditions. In this paper, we argue that future work in this area would benefit from a more explicit examination of the connection between cluster firms and human rights defined according to the 1948 Universal Declaration of Human Rights and subsequent covenants and treaties. We argue that cluster firms’ adoption of CSR policies, often indiscriminately imposed by global buyers, should be differentiated from firms’ actual human rights practices. Based on this distinction, we elaborate a typology of industrial clusters (low-road, window-dressing, rights-oriented) and identify a set of factors likely to influence their practice. Against this background, we discuss an agenda for future research and elaborate on the potential methodological intricacies related to research on the interface between industrial clusters and human rights.     

Corporate Rights to Free Speech?

Although the courts have ruled that companies are legal persons, they have not yet made clear the extent to which political free speech for corporations is limited by the strictures legitimately placed upon corporate commercial speech. I explore the question of whether or not companies can properly be said to have the right to civil free speech or whether corporate speech is always de facto commercial speech not subject to the same sorts of legal protections as is the right to civil free speech. In the absence of clearly defined legal precedent, I emphasize moral reasons for determining the appropriate limits of corporate civil free speech. Appealing to arguments typically used to justify individual rights to civil free speech, I examine the extent to which this sort of justification may or may not be legitimately extended to corporations. I conclude that corporate rights to civil free speech must be restricted because granting rights of free speech to institutions may, in practice, undermine the moral rationale and practical feasibility of guaranteeing rights of civil free speech to individuals. Furthermore, I argue that granting corporations full rights to civil free speech will undercut attempts to develop good moral character in corporate institutions by undermining the efforts of watchdog organizations.     

Diversification and financialization of non-financial corporations: Evidence from China

This paper examines whether and how business diversification affects financialization in non-financial corporations. Using data from the Chinese market, we find that business diversification strategy will significantly increase non-financial corporations' investment in financial assets. Furthermore, exacerbated agency problems, increased investment inefficiency and high operational risk are found to be the consequences of business diversification, which induce companies to hold high-risk financial assets. The impact of business diversification on financial investment is stronger in small-cap firms, SOEs, and firms with weak monitoring mechanisms. Finally, the diversification effect on corporate financialization is more significant where regional economic development and regulatory environment is weak.     

Understanding Japanese CSR: The Reflections of Managers in the Field of Global Operations

This paper examines how Japanese multinational companies manage corporate social responsibility (CSR). It considers how the concept has come to be framed within Japanese business, which is increasingly globalized and internationally focused, yet continues to exhibit strong cultural specificities. The discussion is based on interviews with managers who deal with CSR issues and strategy on a day-to-day basis from 13 multinational companies. In looking at how CSR practice has been adopted and adapted by Japanese corporations, we can begin to see what implications arise from the fact that CSR is a Western-led concept, so opening up critical questions about the future development and evolution of CSR practice within a global context. In being exposed to the concept of CSR as practiced vigilantly in western countries, Japanese multinational company managers have certainly come to re-evaluate aspects of business likely to need rectifying (with potential concerns being gender inequalities, discrepancies in employee conditions, and issues over human rights and supply chains). Japan can be thought to be lagging behind in its understanding and adoption of CSR, in part because corporations do not necessarily state their policies as formally as might be expected. Yet, by analyzing more deeply the kinds of responses gained from CSR managers in Japan (and by placing their remarks within a broader context of Japanese culture and business practices) a far more subtle and revealing picture becomes apparent, not least a more complex picture of the local/global interaction of the frames of reference of corporate responsibility.     

Advancing the Business and Human Rights Agenda: Dialogue,Empowerment, and Constructive Engagement

As corporations are going global, they are increasingly confronted with human rights challenges. As such, new ways to deal with human rights challenges in corporate operations must be developed as traditional governance mechanisms are not always able to tackle them. This article presents five different views on innovative solutions for the relationships between business and human rights that all build on empowerment, dialogue and constructive engagement. The different approaches highlight an emerging trend toward a more active role for corporations in the protection of human rights. The first examines the need for enhanced dialogue between corporations and their stakeholders. The next three each examine a different facet of empowerment, a critical factor for the respect and protection of human rights: empowerment of the poor, of communities, and of consumers. The final one presents a case study of constructive corporate engagement in Myanmar (Burma). Altogether, these research projects provide insight into the complex relationships between corporate operations and human rights, by highlighting the importance of stakeholder dialogue and empowerment. All the five projects were presented during the Second Swiss Master Class in Corporate Social Responsibility, held in Lausanne, Switzerland on December 12, 2008. The audience for this conference, which examined business and human rights, was composed of researchers, governmental representatives, and business and non-governmental organization practitioners.     

Bridging the gap: How sustainable development can help companies create shareholder value and improve financial performance

This study examines the effect of integrating sustainability into corporate strategy on various aspects of shareholder value creation and financial performance in the British capital market. The employed method is based on the content analysis of corporate disclosures and a new technique for assessing the adoption of the corporate sustainability concept (embracing the environmental, social, and financial aspects of a company's policies at the same time). Using extensive data of FTSE 350 firms covering the years 2006–2012, 65 companies were selected as meeting corporate sustainability criteria. For the above period, we find that these firms were characterized by higher financial risk exposure, lower asset growth rates, lower BV/MV ratios, lower EVA ratios, and higher MVA ratios. Such relations were generally present among different size and industry groupings. The results support the thesis that firms that incorporate sustainability issues into their business operations are better able to leverage their resources toward stronger financial performance and shareholder value creation than other companies. The paper contributes to the literature by offering a more holistic approach to corporate sustainable performance measurement and shedding additional light on its relation to financial performance in the context of the recent global financial crisis and its direct aftermath.     

Contextual influences on the corporate entrepreneurship-performance relationship: A longitudinal analysis

Over the past several years corporate entrepreneurship has been widely touted by executives and researchers alike as an effective means for revitalizing companies and improving their financial performance. For the most part, the call for greater entrepreneurial behavior on the part of established companies has been accepted on faith as an inherently desirable objective. The implicit logic behind the pervasive belief in the value of corporate entrepreneurship seems to be that risk taking, innovation, and aggressive competitive action—the key elements of entrepreneurial corporations—will help in identifying and pursuing lucrative product/market opportunities and in providing new bases for achieving superior competitive positions.But what do we really know about the financial consequences of corporate entrepreneurship? Most of the evidence that corporate entrepreneurship “pays off” is anecdotal in nature or based on cross-sectional studies that focus on the short-term implications of entrepreneurial behaviors. As such, in a definitive sense, we know very little about the financial consequences of corporate entrepreneurship.In an attempt to improve our understanding of this issue, this article describes a study of corporate entrepreneurship and its impact on company financial performance. Data were collected from three different samples over a seven-year period to assess the longitudinal impact of corporate entrepreneurship on firm performance. These samples consist of 24 medium-sized manufacturing firms representing 14 industry segments, 39 chemical companies, and 45 Fortune 500 industrial firms representing five industry segments. Data were gathered on each sample using both primary and secondary sources. Regression analysis was then used to analyze the data.The results suggest that corporate entrepreneurship has a positive impact on financial measures of company performance. This effect on performance, which tends to be modest over the first few years, increases over time, suggesting that corporate entrepreneurship may, indeed, be a generally effective means for improving long-term company financial performance. Moreover, the results indicate that corporate entrepreneurship is a particularly effective practice among companies operating in hostile environments (as opposed to benign environments).The study has three principal implications for practicing managers. First, the study documents the general financial viability of engaging in corporate entrepreneurship. This is not to suggest that corporate entrepreneurship is a panacea for improving financial performance. However, entrepreneurial behavior, when considered on the whole (i.e., across firms and industries), is associated with superior financial performance. Second, the study suggests a need to use a long-term time horizon in order to adequately judge the financial consequences of corporate entrepreneurship. The use of a shorter evaluation period may not allow sufficient time for entrepreneurial actions to have their full market and corresponding financial impact. Finally, the study identifies the context-specific character of effective entrepreneurial practice. Specifically, corporate entrepreneurship appears to be a particularly effective strategic practice among firms operating in hostile business settings.     

产业政策支持、企业生命周期与风险承担

产业政策是国家宏观调控经济的重要手段，而政策实施的有效性是产业结构调整和经济高质量发展的前提条件。文章以2007-2017年上市A股企业为样本，从风险承担的角度实证检验产业政策的经济后果及其在企业不同生命周期阶段的差异。研究发现，产业政策支持对企业风险承担具有激励作用，在企业成长期和衰退期的激励作用较强，在成熟期不显著。对产业政策的作用机理研究发现，产业政策支持可以通过政府补助、信贷支持以及税收优惠等途径增加企业的可支配资源，进而提升企业风险承担水平。进一步分组检验发现，产业政策支持对企业风险承担的激励作用不但在市场化程度高的地区显著，而且对处于衰退期的国有企业与处于成长期和成熟期的民营企业也一样显著。文章的结论从微观层面提供了产业政策有效性的证据，对国家产业政策的优化调整以及企业的风险决策具有重要借鉴意义。     

动态货币政策、投资水平与企业价值波动

我国货币政策松紧交替进行,但鲜有文献探讨宽松与紧缩交替的动态货币政策对企业风险、业绩等产出指标的共同影响作用。本文选取2001年至2012年A股上市公司为样本,将此期间划分为宽松与紧缩四个交替的货币政策时期。研究发现：货币政策宽松期（紧缩期）投资水平越高的企业,在货币政策紧缩期（宽松期）经营业绩下降越大（小）,陷入财务危机的可能性越高（低）,企业价值越低（高）。     

Human Rights in the Void? Due Diligence in the UN Guiding Principles on Business and Human Rights

The ‘Guiding Principles on Business and Human Rights’ (Principles) that provide guidance for the implementation of the United Nations’ ‘Protect, Respect and Remedy’ framework (Framework) will probably succeed in making human rights matters more customary in corporate management procedures. They are likely to contribute to higher levels of accountability and awareness within corporations in respect of the negative impact of business activities on human rights. However, we identify tensions between the idea that the respect of human rights is a perfect moral duty for corporations and the Principle’s ‘human rights due diligence’ requirement. We argue that the effectiveness of the ‘human rights due diligence’ is in many respects dependent upon the moral commitment of corporations. The Principles leave room for an instrumental or strategic implementation of due diligence, which in some cases could result in a depreciation of the fundamental norms they seek to promote. We reveal some limits of pragmatic approaches to coping with business-related human rights abuses. As these limits become more apparent, not only does the case for further progress in international and extraterritorial human rights law become more compelling, but so too does the argument for a more forceful discussion on the moral foundations of human rights duties for corporations.     

How global is the Global Compact?

Launched by the United Nations in 2000, the Global Compact (GC) promotes private sector compliance with 10 basic principles covering human rights, labour standards, the environment, and anti-corruption. Its sponsors aim to establish a global corporate social responsibility (CSR) network based on a pledge to observe the 10 principles adopted by companies across the range of company size and regional origin, backed by a modest reporting system and collaborative programmes. The author analyzes the GC's progress toward building a global network from its launch through 2006 and finds that, while the GC's nominal membership base of nearly 3000 companies makes it the largest system among collective action institutions (CAIs) for corporate responsibility, the GC has not reached 'critical mass'. Deficiencies in its nascent global network include limited market penetration among the largest corporations, a membership heavily weighted toward Western European companies, and major weaknesses in compliance with its reporting system. The author concludes that the GC must improve both penetration and compliance if it is to succeed in building a global standard for CSR.     

Corporate fraud under pyramidal ownership structure: Evidence from a regulatory reform

This paper explores a causal relationship between firms' ownership structures and the likelihood of corporate fraud. We document that central firms that control the business group tend to commit corporate frauds related to unlawful intragroup trades (collusive activities and unfair transactions). Following South Korea's 2001 regulatory reform that imposes a ceiling on firms' total amount of shareholding of domestic companies, the frequency of corporate frauds was reduced more in central firms than in non-central firms as the controlling owner's cash-flow rights dropped more in central firms. These results suggest that controlling owners commit frauds to pursue their private benefit.     

The Sarbanes-Oxley Act Will Change the Governance of Non Profit Organizations

As a public director of a NASDAQ stock exchange listed public corporation, I have seen how quickly the reforms in corporate governance imposed by the Sarbanes-Oxley Act have changed procedures and policies in public corporations. In areas such as transparency of financial records and other financial matters including compensation of top executives and conflict of interest policies affecting both corporate boards of directors and employees of the corporation the reforms of this new federal law have quickly changed corporate practices in many corporations. Many persons who have studied this new law believe that these changes will benefit the public, shareholders, employees, and other stakeholders in the modern corporation by increasing the reputation of these organizations for integrity and transparency. Stock exchanges such as NASDAQ and the New York Stock Exchange now require all listed companies to have (after a transition time) a majority of independent directors on their boards of directors. Only independent directors may serve on the audit, nominating and compensation committees of boards in most cases. Some exceptions are made to these rules for foreign and domestic issues of companies where a majority of the voting power is held by one person. According to Morrison & Foster LLP, Corporate Board Advisory March , 2004, NASDAQ requires that the board of directors of a listed company determine that an independent director does not have a relationship that would “interfere with the exercise of independent judgment” in carrying out the responsibilities of a director. Donald Grunewald served as President of Mercy College from 1972 to 1984. He has served as a member of the board of trustees of several colleges and proprietary educational institutions and on the boards of other charitable institutions. Currently he is a member of the Board of Directors of EVCI Career Colleges, Inc., a NASDAQ listed corporation.     

Corporate institutionalization of ethics in the United States and Great Britain

This paper compares the results of large-scale U.S. and U.K. surveys designed to identify managers' major ethical concerns and to investigate how firms are formulating and communicating ethics policies responsive to these concerns.Our findings indicate some important differences between U.S. and U.K. firms in perceptions of what are important ethical issues, in the means used to communicate ethics policies, and in the issues addressed in ethics policies and employee training. U.K. companies tend to be more likely to communicate ethics policies through senior executives, whereas U.S. companies tend to rely more on their Human Resources and Legal Departments. U.S. firms consider most ethical issues to be more important than do their U.K. counterparts, and are especially concerned with employee behavior which may harm the firm. In contrast, the issues which U.K. managers consider more important tend to be concerned with external corporate stakeholders rather than employees.Diana C. Robertson is an Assistant Professor in the Legal Studies Department of The Wharton School University of Pennsylvania. Dr. Robertson has been a Visiting Assistant Professor at The London Business School and she has received The University of Pennsylvania Provost's Award for Distinguished Teaching. Her research interests include the impact of corporate policy and strategy on employees' ethical behavior, and the diffusion of ethical practices among corporations. Dr. Robertson has published articles in theSloan Management Review, theJournal of Business Ethics, andOrganization Science.Bodo B. Schlegelmilch holds the British Rail Chair of Marketing. Dr. Schlegelmilch was formerly a Visiting Assistant Professor at the University of California, Berkeley, and a Lecturer in Marketing and International Business at the University of Edinburgh. His research interests include international and strategic marketing. Dr. Schlegelmilch has published articles in theJournal of International Business, theEuropean Journal of Marketing, andIndustrial Marketing Management.     

Globalization and the Good Corporation: A Need for Proactive Co-existence

Large corporations are coming under intense pressure to act in a socially responsible manner. Corporations have accepted this notion provided that it is exercised voluntarily. It has also been argued that corporations can do well by doing good, and that good ethics is good business. This paper presents an alternative viewpoint by demonstrating that while voluntary socially responsible conduct is desirable, it plays a rather small role in inspiring good corporate conduct. Instead, (a) it is the external economic-competitive conditions that define the parameters and opportunities for good corporate conduct; and (b) the values and traditions of the corporations, and their perceived risk in exploiting those opportunities, that influence the extent of a corporation's socially responsible conduct. The framework presented here analyzes certain market-competitive conditions, which determine the scope and direction of socially responsible corporate conduct, and the instruments available to society to enhance ethical corporate conduct. It suggests that from society's perspective, we should move away from the notion of corporate social responsibility and toward corporate social accountability. Most modern economies operate under conditions of imperfect competition where corporations gain above-normal profits, i.e., market rent, from market imperfections. Therefore, corporations should be held accountable for a more equitable distribution of these above-normal profits with other groups, e.g., customers, employees, etc., who were deprived of their market-based gains because of market imperfections and corporate power. Three approaches are suggested for measuring corporate accountability through corrections. These are: information imbalance, bargaining power imbalance, and, adjudication, remedy and relief imbalance.