The Legal Character of Private Codes of Conduct: More than Just a Pseudo-Formal Gloss on Corporate Social Responsibility

Authors

Veronica Besmer

Abstract

Corporate codes, nothing more than statements that define a corporation's own best behavior, have become ubiquitous in today's business reality that witnesses ever-louder demands for greater corporate accountability. However, the codes' enforceability is uncertain, as they lack the statutory liability or the jurisdictional nexus in case of transnational enterprises. Still, consumers, who are increasingly socially and environmentally conscious, often reward any voluntary declaration of corporate social responsibility. This article outlines the current forms of regulations and reviews some legal enforcement theories. The author concludes that quasi-formal enforcement mechanisms such as stakeholder pressure and greater consumer demand for responsible corporate behavior are the most effective means to compel corporations into complying with their legal or moral obligations. Notwithstanding the legal appearance of the codes, the best forum for ensuring compliance remains the marketplace, not the courtroom.

Recommended Citation

Veronica Besmer, The Legal Character of Private Codes of Conduct: More than Just a Pseudo-Formal Gloss on Corporate Social Responsibility, 2 Hastings Bus. L.J. 279 (2006).
Available at: https://repository.uclawsf.edu/hastings_business_law_journal/vol2/iss1/7