Shadows on Solar: A Teaching Case on the Role of Corporate Governance in Addressing Forced Labor Concerns*

Abstract

AbstractForced labor continues to affect millions of people in the 21st century and worsened globally between 2016 and 2021. Notwithstanding its importance, the issue receives little attention in contemporary business school seminars. Using the recent case of Canadian Solar Inc., a leading solar energy company, this teaching case explores the role of corporate governance as a means of moving toward meaningful changes in the behavior of large, multinational corporations. The case delves into the allegations that the firm has benefited from forced labor by Uyghur Muslims and other ethnic minorities in China's Xinjiang region, exploring the board of directors' actions and a proxy proposal submitted by shareholders. Through this case, students will gain insights into the importance of robust corporate governance, accountability, and transparency in addressing sensitive issues like forced labor. The case highlights corporate governance best practices for companies to adopt, such as proactive board oversight, risk assessment, and transparency.