Adapting Corporate Governance for Sustainable Peace

By Fort, Timothy L.; Schipani, Cindy A. | Vanderbilt Journal of Transnational Law, March 2003 | Go to article overview

Adapting Corporate Governance for Sustainable Peace


Fort, Timothy L., Schipani, Cindy A., Vanderbilt Journal of Transnational Law


ABSTRACT

Acts of violence toward multinational corporations have important consequences for the way these companies will need to structure their approach to international business. This Article proposes four contributions that corporations can make to sustainable peace. By incorporating sustainable peace as a business objective, multinational corporations may be able to blend extant corporate governance principles with a goal that can significantly contribute to the reduction of violence in society.

TABLE OF CONTENTS

I.   INTRODUCTION
II.  THE ROLE OF BUSINESS AND SUSTAINABLE PEACE
     A.  The Contemporary Context: Balance of
         Power and the State
     B.  The Parliamentary Models: Germany,
         Japan, and the United States
     C.  Benefits of Democracy
     D.  The Role for the Corporation
         1.  The Paradox of Globalization
             and Democracy
         2.  The Huntington Thesis and the
             Spillover Effects of Corporate
             Behavior
III. IMPLICATIONS FOR CORPORATE GOVERNANCE
     A.  Corporation Governance Regimes of
         Competing Market-State Models
         1.  The U.S. Model
         2.  The German Model
         3.  The Japanese Model
     B.  Corporate Governance Regimes and
         Sustainable Peace
         1.  A Comparative Assessment
             a.  Citizenship and Voice
                 i.  Citizenship
                 ii. Voice
             b.  Mediating Institutions and
                 Lessons to Counteract Cynicism
                 i.  Mediating Institutions
                 ii. Lessons to Counteract
                     Cynicism
             c.   Comparative Assessment
         2.  A Proposed Model of Corporate Action
             a.  Fostering Economic Development
             b.  Adopting External Evaluation
                 Principles
             c.  Nourishing a Sense of Community
             d.  Mediating Between Potentially
                 Conflicting Parties
IV.  CONCLUSION

I. INTRODUCTION

In May 2002, as President Bush was preparing to embark on a trip to Germany in an attempt to convince European countries to back tougher action against Iraq, large protests sprung up in the city of Berlin. (1) The fear of unrest prompted the German government to call over 10,000 police, the largest contingent ever assembled, into the city. (2) A large composite protest group composed of 240 smaller organizations, including such diverse ideologies as anarchists and environmentalists, which referred to itself as the Axis of Peace (in response to the labeling by President Bush of Iran, Iraq, and North Korea as the "Axis of Evil" in his 2002 State of the Union Address), targeted corporations with U.S. ties in order to express their disapproval of the current U.S. foreign policy. (3) Police had earlier thwarted an attempted firebombing on a Wal-Mart store in Bonn, and they feared further attacks against the retail giant, as well as against McDonald's restaurants and DaimlerChrysler offices. (4)

Of course, such protests are not limited to those groups expressing displeasure with U.S. policy. In January 2002, Argentinian protesters ransacked Spanish and U.S. banks, and a McDonald's restaurant in Buenos Aires. (5) These violent acts arose from an initially-peaceful protest aimed at the economic reforms of the new and unstable Argentinian government in a financial system where most of the investment is obtained from foreign sources. (6)

The above examples point toward an increasing trend in current global politics: the targeting of local branches of international corporations, especially U.S. corporations, to express disapproval with the policies of the corporations' home or host country, or both. U.S. corporations, such as Wal-Mart, McDonald's, Nike, and Coca-Cola, are prime targets because of their size, business practices, and the way that these companies symbolize the capitalist free market to the rest of the world. …

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