Vesting the Corporate Responsibility to Respect Human Rights: <i>Natural Persons v. Legal Persons</i>

Abstract

The author asks whether transnational corporate responsibility today should be vested in legal or natural persons. Three stylized points of view are considered: the welfare economist; the corporate counsel; and the human rights victim. With these actors in mind, the author addresses several aspects of corporate law and human rights from a transverse perspective: the tension between corporate law’s fiduciary duty and tort law’s duty of care; the coexistence of parent control and subsidiary autonomy in the global firm; the troubling unintended effects for human rights victims of the wholly controlled yet autonomous subsidiary; the historical shift from the mono-corporate system to the poly-corporate system and the subsequent transformation of the flesh-and-blood shareholder’s governance responsibility; the ability of today’s companies to transfer or assign legal liability for wrongful acts through corporate reorganization, mergers and acquisitions; and the resulting depersonalization of responsibility in the today’s poly corporate enterprise. The author argues that the ethical and political accountability of decision makers cannot be avoided by technical legal fixes that aim to shift responsibility from one entity to another. The author shows how today’s global governance “gap” is not a missing piece in the puzzle, but a constitutive element of the legal order itself. To illustrate this idea, the author reconfigures the global governance “gap” as the void that runs through a toroid (a life buoy). The author concludes that corporate responsibility today—as the ethical responsibility of flesh-and-blood decision makers—runs from the lowest-level subsidiary to the apex of the multinational corporate group.