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Can Codes of Conduct Work? Evaluating the Effectiveness of Privatised Corporate Governance
Abstract
Over the last couple of decades, the world has witnessed a spectacular increase in the size and number of Transnational Corporations (TNCs). This explosion has resulted in the overseas practices of such companies coming under intense scrutiny, and has highlighted that in most cases, governments lack the resources necessary to ensure TNC compliance to international standards in key areas such as labour rights, environmental pollution, and social justice. As a direct result of the failure of national and international attempts to regulate corporate behaviour, recent years have seen the mushrooming of a number of codes aimed at regulating corporate behaviour, and an increased focus on corporate social responsibility. This chapter will attempt to evaluate the effectiveness of such codes of ethical corporate conduct in the light of available evidence, focusing on the conceptualisation of such regulatory mechanisms, and their relationship to the larger corpus of corporate social, commercial, and ethical interactions. The work will then seek to evaluate the effectiveness of such codes as instruments of privatised governance, particularly through the examination of corporate stakeholder behaviour and recent examples of global best practice.
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