The First Step toward Implementation

Abstract

The initial announcement of the Principles generated widespread press coverage, both for their substance and for the unusual nature of the action to be undertaken. It was unprecedented that CEOs from some of the largest United States corporations would voluntarily and collectively commit themselves to an externally created set of guidelines for their operations. It was also significant that the Principles were adopted despite their explicit ethical foundation in human rights. More than corporations in any other part of the world, large United States-based corporations have consistently and vociferously opposed mixing ethical or even political criteria in their economic decision making. Corporations are viewed as essentially private institutions that are designed for economic activities undertaken for the benefit of their owners; namely, the shareholders. Mixing ethical and political rationales with economic decision making is therefore viewed not only as contrary to the shareholders’ economic interests, but also as detrimental to larger issues of public policy in a democratic society. That these very corporations use all types of political and other arguments when doing so advances their economic interests is beside the point and only serves to support those who would argue not to use private economic organizations for broader social and political purposes, no matter how justified those purposes might appear at a particular time. the Principles were to be implemented in a foreign country where they would be in conflict with local laws, thus raising the issue of intervention in another country's internal affairs. the implementation of the Principles, when limited to United States companies alone, might have put them at a competitive disadvantage with respect to their competitors, not only from South Africa, but also from Japan and Europe. senior executives committed themselves to the Principles despite what was, in many cases, a gross disproportion between the small size of the companies’ South African (versus worldwide) operations and the extensive burdens senior management took on in connection with the Principles. Indeed, our analysis shows that it was the personal involvement of senior corporate executives that made possible not just the formulation and adoption of the Principles, but also their rapid implementation.