Business and Human Rights: What’s the Board Got To Do With It?

Corporate scandals related to human rights issues have illustrated the hefty cost associated with ignoring humanitarian issues while conducting business. For example, the Royal Dutch Petroleum Company (Shell) has spent tens of millions of dollars related to the Nigerian government’s execution of the “Ogoni 9,” which was preceded by a tense relationship between the corporation and Ogoni people of Nigeria. In addition, in India, the Vedanta corporation lost substantial market capitalization following a trial related to its mountain mining activities for its effects on the people of the region. Despite the moral duty that may have compelled action in these examples, it is also clear that a corporation’s (particularly a transnational corporation’s) decision to develop a framework for proactive corporate responsibility is also good business. Assuming the accuracy of this conclusion, this Article questions what role the board of directors should have in formulating this framework in light of the Alien Tort Claims Act and the United Nations’ Guiding Principles on corporate responsibility and human rights. This Article admits that the board of directors will face great challenges when incorporating human rights issues into a company’s corporate governance. However, given the central role courts are placing on the board of directors, it would be wise to rise to the challenge and make sure that human rights are a key part of their function.

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