CORPORATE ENGAGEMENT WITH PUBLIC POLICY: THE NEW FRONTIER OF ETHICAL BUSINESS.

Author:Kaeb, Caroline
Position::Corporations on Trial: International Criminal and Civil Liability for Corporations for Human Rights Violations
 
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  1. INTRODUCTION

    In light of recent policy developments domestically and globally, a new phenomenon has gained momentum as the new frontier of corporate social responsibility. Company practice has increasingly demonstrated that the human rights function of business is developing beyond mere risk management towards a more proactive approach by companies in terms of engaging in--if not advocating for--fundamental human rights issues in the very societies in which they operate. (1) In fact, Forbes has identified key CSR trends for 2017 and 2018, which include "corporations ... stepping up as advocates and problem-solvers" and more companies "bringing CSR into the C-suit" as a matter of corporate leadership. (2) This essay argues that the CSR paradigm has been evolving and expanding in the face of increasingly glaring governance gaps on issues of pivotal societal importance and an international shift towards extremism. In that vein, public policy priorities that have become areas of corporate engagement (irrespective of meaningful government action and regulation) include immigration issues, gender bias, sexual harassment, climate change, LGBTI rights, police brutality, freedom of expression and national security, and broader human rights issues in general. (3)

    While litigation and accountability are an indispensable base line for corporate conduct in society, (4) there is an important additional complementary dimension to corporate responsibility, which has not received due attention in recent years, namely the moral responsibility of corporations. Doctrinal issues of corporate moral agency have been discussed in-depth in the literature. (5) This essay, on the other hand, examines a recent phenomenon, which can be understood as manifestation of corporate morality on public policy issues of topical prominence, namely top corporate executives using their corporate voice and influence to proactively stir public policy for the advancement of societal/public values. (6) There is a healthy cynical view of how corporate behavior intersects with public policy, which most dominantly has manifested itself through lobbying where narrow corporate interests are pursued. And while special interest lobbying has long been part of the corporate and political reality, that is not what this essay investigates.

    The controversy about the roll back of Deferred Action for Childhood Arrivals (DACA) led to an outcry of corporate executives across business sectors about the detrimental implications of this decision for their business and the bedrock values of the country. (7) This corporate response has vividly and forcefully illustrated that there is a strong interrelation between business and human rights and that there is a need to further define this relationship. (8) Corporate engagement on public policy is not equivalent to traditional lobbying efforts aimed at regressively supporting or opposing legislation for the primary pursuit of corporate self-interest. Rather, the phenomenon discussed here concerns how corporations, individually or jointly, seek to shape public policy in ways that constructively address issues of societal importance. Under the paradigm of corporate public policy engagement, business serves as an agent for positive social change. (9) Recent accounts suggest a tangible impact of this CEO activism as state legislatures in the U.S. are competing for investments by out-of-state businesses and show the first signs of being wary of the pronounced corporate backlashes in the form of boycotts and cancellations of business deals. (10) Legislatures in conservative states are experiencing the pressures of the market and are increasingly desisting--for the time being--from further legislative action on polarizing social issues, such as same-sex marriage and other LGBTI rights. (11) With their voice, company executives seem to have slowed down the momentum for repressive bills in state legislatures. (12)

    This essay makes a first attempt to lay out the main parameters of a normative framework for corporate engagement with public policy as part of a broader corporate responsibility paradigm. In that respect, the essay provides some guideposts for companies to identify and engage on public policy issues affecting their stakeholders and shaping their business environment. It complements the U.N. Guiding Principles on Business and Human Rights (13) ("U.N. Guiding Principles"), which focus on the corporate responsibility to address negative impacts on society, but do not substantiate for companies whether and how to engage on broader public policy issues in order to advance human rights and societal values. (14) This essay provides a framework of thinking and contextualizing that aims to fill this gap.

  2. A NEW TREND IN CORPORATE LEADERSHIP

    An article in The New York Times from August 2017 put the spotlight on CEOs as leaders who have expressed their "moral voice more forcefully than ever" and demonstrated a new level of C-suite activism. (15) This activism is driven by values, or as the rhetoric of corporate leaders has suggested, by morality and the universal values that bind us beyond party lines. (16) The news article hit the nerve of this recent phenomenon of CEO activism when it postulated the "Moral voice of Corporate America." (17) The concept went viral and contributed to a lively debate. (18)

    Recent examples of corporate leadership taking a proactive stand on public policy issues pertaining to the fundamental rights in those societies in which businesses operate are plentiful. The narrative told by CEOs and popular news coverages seems to insinuate that this conduct by corporate officers is increasingly guided by a moral imperative rather than a legal mandate or a business rationale. (19) This notion is not entirely new--see, for example, the divestment movement in the mid-1980s in response to the South African apartheid regime (20)--but the consistency and frequency of engagement across the political spectrum as well as across industry sectors, has undeniably established an emerging pattern of corporate responsibility with important practical and normative implications.

    There are many ways how this proactive corporate engagement on public policy issues has been described, as a form of corporate advocacy, political CSR, or as a "counter-attack" standing up against government overreach and failures. (21) No matter what the normative framing, in essence, they all describe a new reality where business speaks truth to power on public policy of topical prominence in society.

    Already in 2014, a survey showed that 83% of corporate executives agree that human rights are a matter for business as well as governments. (22) A recent global survey across all demographics finds that "[n]early 7 in 10 respondents say that building trust is the No. 1 job of CEOs, ahead of high-quality products and services." (23) The public sentiment is evidently shifting, and corporate executives have increasingly put this realization into action. There has been an emerging pattern of CEO's and other top corporate executives speaking out on timely topics and using their public notoriety to take a stand on issues not directly related to their business. (24) It is a new path to leadership born out of widening governance gaps in many prominent areas of public policy, which concerns not only their customers and employees, but all of us as citizens and as members of society. (25)

    Examples of CEOs standing up for universal values and fundamental rights include corporate responses to the U.S. President's controversial immigration policies. For instance, one prominent example was Starbuck's commitment to hire 10,000 refugees following the President's executive order indefinitely halting the admission of refuges from Syria as well as temporarily suspending the U.S. Refugee Admissions Program and temporarily barring people from seven Muslim-majority countries to enter the United States while a review would be conducted. (26) There also were strong reactions by Silicon Valley leaders, including Netflix's CEO calling the actions "so un-American it pains us all" while many others from the ICT industry echoed these concerns. (27) Furthermore, over 400 CEOs, including Mark Zuckerberg, signed a letter asking the President and U.S. Congress to save DACA. (28) Most recently, business leaders spoke out against the U.S. policy to separate families at the U.S. border; several major airlines asked the government not to use their flights to transport migrant children who were separated from their parents. (29)

    In addition, a number of major companies pulled out investments in states with discriminatory LGBTI legislation, such as North Carolina and Mississippi. (30) Factors like a state's performance on LGBTI rights can be a decisive factor in securing investment from major out-of-state companies, such as Amazon, which launched a public bidding process to identify a city to serve as the home for its second headquarters. (31) With its CEO, Jeff Bezos, being very outspoken about his support for marriage equality, the tech giant has become the fulcrum of the LGBTI movement. (32) An advocacy campaign has urged the company to forego cities for its second headquarters in states which do not have anti-discrimination laws that would protect against discrimination based on sexual orientation and gender identity. (33) Companies and their executives have increasingly become advocates for fundamental rights, as demonstrated prominently in the case of Evans v. Georgia Regional (34) in which 76 major corporations (including American Airlines, Starbucks, Deutsche Bank, Google, Apple, Uber, and Facebook to name a few) submitted an amicus brief urging the U.S. Supreme Court to hear the case and recognize that federal anti-discriminations laws also include the prohibition of discrimination based on sexual orientation. (35) The "moral voice of corporations" has reverberated loud...

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