INTRODUCTION

Corporate behaviour is important for company success both financially and concerning the relationship between corporate and business interests (stakeholders). We cannot define corporate behaviour without an ethical and CSR base in order to refer to that behavioural aspect. Corporate behaviour involves legal rules, ethical codes of conduct and social responsibility principles. In other words corporate behaviour is based on all of these components and involves law, ethics and CSR. It is important to recognise also that this behaviour must be ethical but must also be seen to be ethical – perceptions are very important. Corporate behaviour has effects not only on stakeholders and shareholders but also on the entire economy. When a corporation acts ethically and socially responsibly in its business decisions and strategic planning then that corporation will be more sustainable. As we have seen, socially responsible corporate behaviour is increasingly regarded as essential to the long-term survival of companies.

The chapter examines the business reasons for taking human rights obligations seriously. Human rights norms, bereft of business drivers, are not likely to be taken seriously by companies. It is therefore instructive to examine the sound business reasons for embracing the norms in business operations, both from the point of view of multinational companies as well as from the point of view of their supply chain partners in developing countries. The chapter analyses the business reasons from the viewpoint of companies themselves as well as that of their entire range of stakeholders: investors, consumers, employees, business partners, suppliers, government, and local communities and other elements of civil society. To take a single example, approximately 1,300 organisations; including asset owners, institutional investors with more than $45 trillion under management have pledged that they will integrate CSR (and therefore human rights) into their investment analysis and decision making. This development represents a kind of financial earthquake although it is not yet understood in corporate boardrooms nor by the management of supply chain companies.

It might be helpful at this point simply to make a brief comment about the broad meaning of corporate social responsibility (CSR).