Human Rights

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However, we must also consider why nations would be reluctant to enforce such legislation. Although there is the issue of whether countries are able to tax large corporate entities, the risk still remains that these entities may very well relocate. Having a significant and profitable company leave will create a domino effect of losing out in revenue raising activities. This factor itself is a large enough incentive for nations to not place in action the legislation and compliance enforcement suggested. With this being said, a more practical method of deterring corporations which are violating human rights is through the power of collective individuals.

As we know, the sources of funding corporations use to raise money are through debt and equity. Shareholders as a collective have tremendous power in influencing companies and company performance. This allows shareholders and potential investors to place pressure on companies to highly consider changing their priorities in terms of corporate social responsibility. By actively selling down shares in companies which are exposed to violating human rights such as Nike, Apple or Microsoft, this sends a message to executives where corporate social responsibility becomes a means to creating profit. Potential investors can also build portfolios which consider these ethical factors rather and not only the company’s balance sheet or cash flow. Once again the focus lies on the inability of the corporate world to disregard profits. The effectiveness of the methods outlined is that it forces the profit element into corporate social responsibility.

Reluctance may also occur in this matter as it would be reasonable to expect a turnaround time of profits. Simply investing on the basis of the ethical and values of a company will not lead to large profits in the short run. It would also require a collective passion for eliminating human rights violations on a global scale to be put into place for this course of action to be effective in the long run. As such, it would also be a difficult task to commence such a movement.

In a perfect world, the two suggested courses of actions by both government and global citizens would be able to work hand in hand. Although it will be a slow process, it is still possible to have legislators create methods of enforcing such changes upon corporations. Accounting standard boards around the world would also have a hand in assisting this movement as the disclosure factor would definitely need to occur in the financial statements. Combined with a new investor mindset of rewarding corporations which provide a heavy emphasis on ethical standards which stray away from violating human rights, a new direction in corporate governance will be reaped. Having a new and revised industry to enforce a new form of disclosure will give investors and shareholders a wider range of information to base their investments on. With the pressure of these stakeholders, corporate entities would be forced to reconsider their company objective even if not for ethical reasons.

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