Six Ways Companies Can Promote and Protect Human Rights

In responding to a government’s human rights abuses, companies have effective options beyond standing by or cutting ties.

Markus Scholz and N. Craig Smith Reading Time: 7 min 

Topics


The much-vaunted 2019 public listing of Saudi Aramco set a record for the world’s biggest initial public offering. But it was likely a disappointing affair for its architect, Saudi Crown Prince Mohammed bin Salman: The stock saw only tepid demand outside the region. That it failed to gain the level of global enthusiasm and support he had been seeking was due in no small part to investor wariness of Aramco’s close ties to the Saudi regime and the country’s appalling record on human rights.

For example, the brutal killing in October 2018 of Washington Post columnist Jamal Khashoggi by Saudi agents in Turkey prompted dozens of high-profile business leaders to withdraw that year from the country’s flagship investment summit, nicknamed “Davos in the Desert.” CEOs from JPMorgan Chase, BlackRock, Google, Uber, Siemens, and Glencore, as well as then International Monetary Fund managing director Christine Lagarde and World Bank president Jim Yong Kim, all boycotted the event. In recent years, the Saudi government has also been more broadly condemned for its harsh crackdowns on dissidents, activists, and independent clerics; its exploitation of migrant workers; and its unlawful airstrikes in Yemen.

The extent to which corporations should react to human rights abuses by governments in their host and home countries has become one of the most dynamic and interdisciplinary discussions in the field of corporate responsibility. Corporations are increasingly expected to become more proactive in protecting human rights as private and public responsibilities blur and companies become more conscious of the expectations of a more socially aware investor base and workforce. And we believe that speaking out against human rights violations is the right thing to do on its own merits.

But once a company decides to take a stand, what can it do? Are the only options to carry on with business as usual or cut ties with a country completely?

Continuing with business as usual in countries where human rights are systematically abused raises obvious questions of company complicity with these human rights violations. As in other cases of passively standing by, the government engaging in the abuse might even feel encouraged when businesses fail to act decisively by either intervening or leaving the country altogether. But cutting ties with the country can be problematic as well.

Topics

About the Authors

Markus Scholz holds the Endowed Chair of Corporate Governance & Business Ethics at the University of Applied Sciences for Management & Communication in Vienna. He also heads the Institute for Business Ethics and Sustainable Strategy and is a visiting scholar at the INSEAD Hoffmann Global Institute for Business and Society. N. Craig Smith is the INSEAD Chair in Ethics and Social Responsibility; director of the Ethics and Social Responsibility Initiative, a part of the INSEAD Hoffmann Global Institute for Business and Society; a specialist professor at the INSEAD Corporate Governance Centre; and a member of the Scientific Committee of social responsibility rating agency Vigeo Eiris. His latest book (with Eric Orts) is The Moral Responsibility of Firms (Oxford University Press, 2017).

Tags:

More Like This

Add a comment

You must to post a comment.

First time here? Sign up for a free account: Comment on articles and get access to many more articles.

Comment (1)
Clement GAVI
Companies appear and evolve in an environment of which they are the parts. Thus contradictions within that environment can affect the efficiency of companies' promotion of and protection of Human Rights. 
For instance when Human Rights Council, an International Institution designed to deliberate on the common destiny in matters of Human Rights is entrusted to a dictatorship, it becomes obvious the idea of the defense and protection of Human Rights becomes a matter of categories and circumstances. That is to say, depending on who or who we are, we can be allergic to Human Rights, by despising them, while having the possibility of ordering in the Institutions responsible for inculcating the importance Human Rights. 

These contradictions not only affect the effectiveness of the defense and the protection of Human Rights, but also affect the very notion of Human Rights.
So we need a certain coordination of actions and a certain consistency of approaches.