Accountability of transnational corporations in the developing world

Abstract

Purpose The purpose of this paper is to contend that the dominant voluntarism approach to the accountability of transnational corporations (TNCs) is inadequate and not fit-for-purpose. The authors argue for the establishment of an international legal mechanism for securing the accountability of TNCs, particularly in the context of developing countries with notoriously weak governance mechanisms to protect all relevant stakeholders. Design/methodology/approach The study adopts insights from the fields of management and international law to draw out synergies from particular understandings of corporate governance, corporate social responsibility and international human rights. The challenges to governance in developing countries with regard to securing the accountability of TNCs are illustrated with the Nigerian experience of oil-industry legislation reform. Findings The specific context of the experiences of developing countries in Africa on the operations of TNCs particularly commends the need and expedience to create an international legal regime for ensuring the accountability of TNCs. Originality/value Mainstream research in this area has focused mainly on self and voluntary models of regulation and accountability that have privileged the legal fiction of the corporate status of TNCs. This paper departs from that model to argue for an enforceable model of TNC’s accountability – based on an international mechanism.

Global health and international business: new frontiers of international business research

“…Public health concerns affect the sourcing of raw materials and the sale of finished products. Perhaps, since developing economies are becoming increasingly prominent in IB education and research, there is the need to use the Ebola crisis to address interdisciplinary roots of IB and its nexus with global health (Ahen, 2017b), human suffering resulting from MNC mineral exploitations (Ayres, 2012;Omoteso and Yusuf, 2017) and the structural violence (Srikantia, 2016) inherent in globalization. Ebola brought the economies of the epicenters to their knees.…”

An overview of social responsibility dimensions in international business

“…Furthermore, studies point to the role of government and the ethical decision-making behavior of auditors in shaping CSR disclosures and corporate governance (de Graaf, 2016; Rodgers, 2009). Finally, institutional characteristics are discussed as impacting corporate governance behavior, with international regimes recognized as facilitating accountability in MNEs (Omoteso & Yusuf, 2017) and standards enforcement mechanisms recognized as increasing the level of CSR reporting in firms (Fortanier, Kolk, & Pinkse, 2011). When investigating the communication of CSR through company web pages, research finds that the manner in which CSR messages are conveyed varies across different countries (Maignan & Ralston, 2002), and these differences in CSR reporting can be explained not just by formal institutional drivers but also by traditional informal factors specific to the national context (Ertuna & Tukel, 2010).…”

“…Other studies explore interactions between market and non-market actors (Doh & Lucea, 2013;Franco, Haase, & Fernandes, 2014), the impact of global value chains (GVCs) on economic and social upgrading processes (Omoteso & Yusuf, 2017), and the relationship between institutional characteristics and corruption (Lee, Oh, & Eden, 2010).…”

Wellbeing Economics

“…cially in developing countries (Banks et al 2015;Omoteso and Yusuf 2017). As a counter to that behaviour, individuals are able to support corporate social responsibility by acting as ethical consumers (Chipulu et al 2018) or as socially responsible investors (Riedl and Smeets 2017).…”