Teaching Comparative Corporate Governance: The Significance of 'Soft Law' and International Institutions

Abstract

Scholars today are inquiring as to what, other than formal legal commands or lawsuits based thereon, influences the behavior of human actors in corporations. "Norms versus corporate law" has become a subject of symposia and other fora of inquiry. In that inquiry, arguably two neglected, overlapping aspects have been "soft law" and the role of international organizations such as the OECD, World Bank, IMF and the World Trade Organization (WTO). International and comparative scholars define soft law to include aspirational codes of conduct for corporate actors, corporate governance codes of best practices, treaty provisions, trade agreement provisions, and the like, all of "which may provide a conceptual framework for decisionmaking" in the corporate setting "but do not seriously constrain [corporate] decisionmakers." Codes of best practices also include a substantial comparative aspect as scholars and teachers compare the Vienot Report in France with the Cadbury Report in the UK, the ALI Corporate Governance Project and General Motors' 29 points in the United States, the Bosch Report in Australia and similar codes around the world. Newer codes of best practices include those in Italy, Korea and Japan. The growth of large multinational corporations and the collective action problem host nation states face in policing multinationals' activities highlight the need for study of soft law, the role of international organizations, and their effects on corporate activities with respect to core worker welfare and safety protections, environmental degradation, and similar subjects. The time may soon be arriving when these subjects have a place in the basic business organizations classes taught in law schools here in the United States as well as elsewhere.