The Role of Corporate Governance in the Choice of Arbitration as a Dispute Resolution Mechanism

Abstract

Conflicts of interest are a phenomenon inherent to human beings, and inevitably, within private, public, corporate, and business relationships, there will be disputes over the same object or claims resisted for various reasons. The hypercomplex society in which we are immersed has brought changes in human behavior, where individuals’ objectives, success, and results are being pursued in an increasingly immediate manner. The reflections of these values directly impact companies because, in addition to being responsible for producing services and products that will be consumed by those seeking full satisfaction, they also aim for their organization’s profitability to exceed annual targets. Market demands have made business relationships multidisciplinary, requiring partners, advisors, administrators, and directors to have the knowledge and caution to operate in areas that were never professionally explored before, as well as care in decision-making and their social repercussions, where consultation with legal, accounting, technological, administrative, and commercial experts is becoming increasingly common. The problematic question is defining the contours and elements that should precede the company’s decision-making in choosing an appropriate method for conflict resolution. The general objective of this study is to analyze the values and characteristics that a conflict must possess to be brought to arbitration, without giving rise to new problems, relying on good corporate governance and ESG values. Using the deductive method and specialized doctrinal analysis of the topic, the conclusion is reached that when the conflicting parties cannot resolve the dispute themselves through negotiation or even through conciliation or mediation, this is when arbitration gains space, as the judiciary is not capable of efficiently resolving complex issues with the confidentiality and reasonable timeframe required by business organizations due to the increasingly competitive market. This paper aims to study the advantages of arbitration and the role of corporate governance in participating in the decision-making process.