Forthcoming in Business and Human Rights Journal

34 Pages Posted: 23 Apr 2021 ...

Date Written: April 12, 2021

Abstract

Our discussion is divided into five parts. The first recaps the current debate regarding the purpose of the corporation, which centers on whether and how stakeholder governance should and could supersede shareholder primacy. The second provides a brief backstory on shareholder primacy vs. stakeholder governance. The third introduces the elements of HRDD and demonstrates that even in its soft law form it is bringing stakeholder concerns and corporate practice into closer alignment. Section four describes how this experience with soft law is informing national and supranational legal requirements in a growing number of jurisdictions, with knock-on effects for corporate governance. The conclusion endeavors 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 space.

Keywords: Stakeholder capitalism, human rights and environmental due diligence, soft and hard law