Global Stakeholders: corporate accountability and investor engagement

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Abstract

In this age of transnational capitalism most victims of corporate malpractice have no means to hold the wrongdoers to account – especially those whose lives are blighted day-in, day-out by the “normal” operations of companies within the letter of the law. This paper argues that corporate social and environmental abuses are rooted in a lack of accountability of corporations to their stakeholders. It explores how governance mechanisms such as corporate engagement by “socially responsible” investors could enhance stakeholder accountability. It identifies and contrasts two paradigms in socially responsible investment engagement, and relates them to voluntary and regulatory responses to corporate abuses. It concludes that the development of standards for stakeholder-oriented engagement and governance could help stimulate effective regulatory measures to protect stakeholder interests.

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