Professional Documents
Culture Documents
LAWS 8024
the legal fiction surrounding the corporation. The first fiction is that it is a legal
person; the second is that it is an organ of the society hence, a stakeholder.
A follow-up implication is that it answers the question raised by Tom Campbell in his
paper,3 questioning what the scope of the human rights responsibility borne by
corporations should be. As an organ of the society, the human rights responsibility
of the corporation ought to equate to that of the state. And since it is regarded as a
corporate citizen, it ought to, in the words of Michael Sandel, 4 direct its activities
less to the pursuit of individual self-interest and more to the pursuit of the common
good. This new role of an organ of the society may as well provide the justification
for legitimizing corporate social responsibility.
The beneficiaries of the corporate social responsibility ought to be a corporations
stakeholders. Although Tom Campbell claims that the stakeholder theory fails to
legitimize CSR because it does not distinguish between the different stakeholders or
determine the weight of their respective claims, he admits, however, to overlooking
the concept of the social contract. Here, for instance, in an oil-rich developing
country, all the citizens have an undivided and equal claim to their natural
resources, and share the same expectations from a prospecting oil company.
Legal Rules as Mechanism?
Professor Michael Sandel criticizes the market and its culture of greed. He called for
a reconnection of the market with morals and values. 5 The question thus arises:
what is the limit of morals with regards to CSR and human rights. Should moral
ethical standards be proscriptive or prescriptive? If they prescribe some positive
corporate philanthropy, should liability follow from failure to adhere to such moral
prescription? Some form of legal enforcement could serve as the instrument to
connect business activities and the markets with moral values, responsibility and
trust. Tom Campbell counters this by states that CSR should have, at least, in
practice, some voluntarism internal mechanisms and cultural processes that
support a moral, rather than legal, approach to corporate responsibility. 6 Justine
3 Tom Campbell, The Normative Approach to Corporate Social Responsibility A
Human Rights Approach. D. McBarnet, A. Voiculescu, and T. Campbell, eds, The
New Corporate Accountability: Corporate Social Responsibility and the Law (2007:
Cambridge UP) pp 529-564.
4 M. Sandel, Markets & Morals (The Reith Lectures No1, 2009) full text at:
http://www.bbc.co.uk/radio4/features/the-reith-lectures/transcripts/2000/#y2009.
5 Ibid.
6 Ibid 557-558
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Nolan identifies voluntarism as Australias favoured approach. 7 The danger of
subjecting CSR and corporate governance as a whole, to voluntarism and internal
culture is reflected in the Japanese attitude to independent directors. 8 In the end,
negative corporate culture appears to yield to some form of normative codification,
represented in Shinto Abes Stewardship Code, and transnational corporate
governance.
Working Together
Transnational principles of corporate governance may not work across all borders.
Sometimes the market, and its principles of demand and supply, wins in the end.
This is demonstrated in the fate of Nike and its contractor, Lyric industries. By
simply being concerned with the publics moral evaluation of its image, Nike misses
the chance to collaborate with Lyric towards improving the rights and working
conditions its staff. Its withdrawal from the contract leaves Lyric industries staff
worse than Nike had made them.