The article will use a doctrinal research method to analyze the legal aspects of corporate violence and human rights. 29 Hess, "The Transparency Trap: Non-Financial Disclosure and Corporate Responsibility to Respect Human Rights".
Distinct Legal Personality and Limited Liability
Then, with the help of labor law, alongside a hierarchical structure where managers give orders to employees and staff members to cooperate with each other in the pursuit of corporate goals, which are inevitably maximizing the value of the corporation. In this sense, there is an effective commodification of work41 and employees sit at the bottom of this hierarchical structure.42 However, in any corporate management model, the primary mandate for boardroom executives is to perform their duties in the best interest. of the corporation. Therefore, some of the above characteristics and their impacts are examined in the following subsections.
As long as the offending company is insolvent, none of the remaining insolvent companies within the holding company can be held liable. Because plaintiffs are routinely subjected to astronomical costs, inadequate information, and delaying tactics by corporations during litigation, much of the case law emphasizes the procedural advantages enjoyed by corporations.49 This highlights another instance where corporations are favored over plaintiffs, and once again it highlights power differentials in favor of the corporation.50 Still, the settlement may not accurately reflect the extent of the violation or harm caused, as plaintiffs may feel pressured to accept the settlement rather than risk everything if they do. no.51. Unfortunately for these victims, special personality and limited liability often result in the "wrong" company, because the parent company, which is a separate entity from the wrongdoer, is not required by law to compensate the harm suffered by the injured party. .
Despite the fact that corporations "will never cover the full cost of the damage caused," shareholders (and executives) will still hold positions of power in the corporation.54.
Shareholder Primacy and Corporate Structure
In the end, regardless of whether there is ongoing discussion about how much shareholder primacy is currently incorporated into corporate law, many nations continue to maintain their stakeholder-oriented reputation.61 Furthermore, the promotion of shareholder primacy by global financial bodies such as the Organization for Economic Co-operation and Development Cooperation and Development (OECD), the International Accounting Standards Board (IASB), the International Monetary Fund (IMF) and the World Bank make this point very clear.62 For example, the OECD's principles of corporate governance,63 which are reinforced by the OECD's Guidelines for Multinational Enterprises request board members to ensure that the corporation is strategically led, that executive leadership is effectively monitored and held accountable for the sake of the company and its shareholders. The principles emphasize the priorities of the shareholders and emphasize an Anglo-American orientation of corporate law. The Conceptual Framework for Financial Reporting of the IASB is explicit about its prioritization of the financial investors, stating that the objective of general-purpose financial reporting is primarily to provide current shareholders with accurate financial information regarding the reporting corporation that they can use to make decisions or to contribute. resources for the corporation.64.
60 Surprisingly, the majority of the nations examined in this study have surpassed the United Kingdom, which was among the nations that popularized the primacy of shareholders for corporate governance (in the form of the adoption of pro-shareholder laws and the creation of of binding legal framework). Convergence to the Primacy of Shareholders Corporate Governance: Evidence from a Leximetric Analysis of the Development of Corporate Governance Regulations in 21 Countries Corporate Governance 19, no. This is because when managers lack control, they tend to pursue goals that are not in the best interest of the shareholders.
Employees are typically lowest in the corporate hierarchy according to this model; it is typically the most vulnerable when the company encounters financial problems.
Directors’ Duties and Shareholder Primacy
They are subject to monetary pressure from managers and the possibility of losing their jobs, while they are also unable to diversify their interests as shareholders can.67 Due to the fact that corporations now work as consortia or in chain networks of supply, globalization has made these structures much more complex. A similar set of obstacles prevents victims of human rights abuses or workers in such supply chains, who can be used to prove legal culpability against parent businesses,68 presenting a threat of injustice that can change their "consciousness legal" and make them stop engaging in fighting for rights. 69. In general, company laws provide directors and shareholders with the greatest control over corporate decision-making and reporting processes thanks to their voting privileges.
The general meeting of shareholders holds the members of the board accountable, and the shareholders, with the help of the auditors, keep an eye on the way in which the corporation is managed.72 In reality, the rights and responsibilities of employees are not explicitly stated in corporate law. not stated. Although it is often said that fiduciary duties are owed to the corporation and its shareholders, employees are not technically covered by corporate law.73 The fact remains that the distribution of wealth has become more narrowly concentrated as a result of the shareholder-oriented structure of the corporation. and its reliance on shareholder priority; such priority is often taken advantage of by the shareholders. Company law often gives shareholders more rights and less responsibility than others, such as choosing directors, making major decisions and being paid, while they are not liable for what the company does.74 This can make it more difficult in many ways to protect human rights, such as: it can make companies focus on making more money and spend less, even if it means harming or ignoring other people's rights, it can make shareholders and other stakeholders have different or opposite expectations and demands about how the company should respect people. rights, it can make it difficult to make companies and their shareholders responsible and accountable to people.
71 UK HM Government, Good Business: Implementing the UN Guiding Principles on Business and Human Rights (Londen: Her Majesty's Stationery Office, 2016).
Corporate Detachment with Environmental and Social Issues
Human Rights Due Diligence
Corporations must proactively regulate their company's actual and potential adverse effects on human rights.78 While the UNGPs rules on due diligence are still voluntary, many governments have enacted laws requiring due diligence on issues specific.79. The movement for due diligence legislation has gained traction, gaining support from policy makers, academia, business stakeholders, stakeholders and members of the public. As part of its Green Deal agenda, the European Commission is considering proposals to introduce an EU-wide due diligence law on human rights and ecological sustainability.
Legislation mandating due diligence could represent a step forward compared to filing disclosures and is more effective than voluntary policies by requiring business actors to be more proactive and responsive. For example, Birchall notes that due to the utopian nature of due diligence regulations, what counts as true compliance is ambiguous; "there is no single solution" to how corporations should conduct human rights due diligence, and results are expected to "vary widely" across jurisdictions.81 In the end, corporations still have a lot to do. 79 For example, the Netherlands introduced the Dutch Child Labor Due Diligence Act, France with its Control Act in 2017, Norway's Transparency Act in 2021, while both the United States of America and the European Union introduced legislation on conflict minerals.
80Livia Ventura, "Corporate Sustainability Due Diligence and the New Boundaries of the Firms in the European Union," European Business Law Review 34, no.
Legal Reforms Necessary to Rectify the Issue of Corporate Violence
Company laws need to be reformed more than ever, as they are a component of the system that has led to systemic inequality. Since shareholders (and perhaps investors in general) have made little progress in addressing the egregious abuses committed by the corporations in which they invest, they should be demoted from being placed at the top of the hierarchy in this governance and ownership. equal. the system. 86 Sjåfjell, “How Company Law Has Failed Human Rights - and What to Do About It.” "How Company Law Has Failed Human Rights - and What Should Be Done About It," 186.
By building in such an obligation, directors will be reminded of the importance of human rights for the profitability of. See Joanne Bauer and Elizabeth Umlas, “Making Corporations Responsible: The Parallel Tracks of the B Corp Movement and the Business and Human Rights Movement,” Business and Society Review 122, no. A more substantial punishment compared to paying compensation to the victims of blatant human rights violations or failure to actively cooperate with due diligence standards could increase the likelihood of companies being dissolved.
92Federica Agostini and Michele Corgatelli, “Article 25 of the Proposal for a Directive on Corporate Sustainability Due Diligence: Enlightened Shareholder Value or a Pluralist Approach?” European Company Law 19, no.
Conclusion
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