Abstract
AbstractFor the first time in four decades, leading business associations, corporations, and the corporate law and governance community are seriously debating moving beyond shareholder primacy toward some form of ‘stakeholder governance. But the how question unveils significant differences of opinion as well as difficulties. We focus on a pathway that complements the ambition of stakeholder governance, but which current reform proposals have largely overlooked. We draw on practical experience in the field of business and human rights, where leading companies are increasingly embedding human rights due diligence processes into their strategic decision-making. We contend that as human rights due diligence is made mandatory for companies, which it is in a growing number of jurisdictions, including for foreign firms with a significant business presence in them, risks to stakeholders become a material corporate governance issue. That makes it necessary for firms to address stakeholder concerns and to demonstrate that they are, with possible legal consequences for having failed to do where harm occurs. Such changes by themselves may not constitute a full-blown system of multi-fiduciary obligations, but they mark substantial strides on the path toward it, and they are doing it in the relatively near-term.
Highlights
In 2005, the United Nations Human Rights Council requested the United Nations (UN) Secretary-General to appoint a Special Representative on Business and Human Rights
The UNGPs are based on three normative pillars: the state duty to protect against human rights abuse, including by third parties such as business; an independent corporate responsibility to respect human rights, that is, actively to avoid people’s human rights being harmed through a company’s activities and business relationships, as well as to address harms that do occur; and the need for victims to have access to effective remedy, in which both states and enterprises have a role to play
The conclusion endeavours to draw some lessons from how, a mere decade after UN endorsement of the Guiding Principles, they have turned the idea that companies are responsible for preventing and addressing adverse impacts of their business on people’s basic dignity and equality into a mainstream proposition with significant implications for corporate governance, while acknowledging that large gaps remain in the business and human rights (BHR) space
Summary
In 2005, the United Nations Human Rights Council requested the United Nations (UN) Secretary-General to appoint a Special Representative on Business and Human Rights. This article describes one such process: how the construct of human rights due diligence (HRDD), a core component of the UNGPs, is helping to provide a path beyond shareholder primacy, a ruling corporate governance norm for nearly a half century, towards multi-fiduciary obligations. This is a critical development for human rights insofar as shareholder primacy coupled with its correlative cost-cutting methods have been major drivers of outsourcing and offshoring, risk-shifting, and socializing externalities of one sort or another. The conclusion endeavours to draw some lessons from how, a mere decade after UN endorsement of the Guiding Principles, they have turned the idea that companies are responsible for preventing and addressing adverse impacts of their business on people’s basic dignity and equality into a mainstream proposition with significant implications for corporate governance, while acknowledging that large gaps remain in the BHR space
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
