The Trump Administration provided a natural experiment in international law when it withdrew from state-level commitments to international law regimes. In the wake of this move, while the national government rejected international norms, big corporations continued to comply. Their compliance challenged long-standing assumptions about the centrality of states in enforcing international law. International Law in the Boardroom takes an important step towards understanding this puzzle: it unpacks how corporations institutionalize compliance with international norms. It then articulates how this analysis of the mechanics can help corporate compliance become even more widespread, a particularly laudable goal in a world where state commitments may swing with political change.
The article investigates what large companies have done by taking a case-study approach. It identifies contexts where the “state pathway” was weak–climate change, human rights and sustainable development–then examines the actions of large companies within sectors tied to each particular area. For example, when examining climate change, the author analyzed three large companies in the energy sector and three more “industrials.” (§ III.A.)
The resulting list of S&P 100 companies is full of recognizable names like Chevron, UPS, and Boeing. For each corporation, the author dug into primary materials: investor reports, SEC filings, shareholder proposals, NGO benchmarks, company manuals and handbooks, and more. (§ III.A.)
The article reports the results of this digging. (The reporting is appropriately qualitative rather than quantitative, as the context suggests.) Although directors are not always expert in the specific areas, a striking and positive theme emerges: oversight of these particular issues is explicitly located at the level of the board of directors – the entity in charge of directing how the whole business is managed. Though it requires a close read, there are intriguing details. Significantly, sustainability sometimes affects how leaders are paid; some companies have “integrated sustainability metrics into the determination of executive compensation” (§ III.B.2.) Overall, the examples examined are “promising,” “suggest[ing] that many large corporations are institutionalizing international law.” (§ III.E.)
The article adeptly contextualizes these results, acknowledging open questions and inherent limitations of the case-study approach. In particular:
Are the promising results generalizable? The issues and corporations studied here are high-profile. The article cautions that both the visibility of the corporation and the saliency of the particular issue may shape compliance, tempering celebration of the positive results. It notes that “compliance may improve with the visibility of the corporation, which is influenced by its size, brand, reputation, product or service, or other organizational features.” Particular issues also may have higher visibility because of “emotional salience, magnitude and nature of harms, victims and media coverage,” as well as “attain[ing] high visibility within a sector when investors or other groups recognize the potential for that issue to influence the financial performance of a corporation.” (§ III.E.)
Do the corporate committees and policies affect corporate actions in a way that promotes the international-law objectives? Interestingly the term “greenwashing” does not seem to be anywhere in this piece, despite its use of corporate statements of commitment and its focus on corporate climate change and sustainable development as two of the three case studies. But neither does the author overclaim. “Effectiveness” is explicitly a question for another day. And the article’s inquiry into congruence between international law norms and corporate policies and structures is likely a necessary first step towards action.
Finally, the article follows through on its promise to propose concrete applications of its insights. It concludes by speaking to an international law audience with specific examples of treaty drafting, with the earlier-developed principles in mind. The advice is not just about how to talk about the impact of human rights; for instance, connecting them with shifts in corporate purpose. It also promotes practical, and often overlooked, mechanisms. It recommends, for instance, including comparability and measurable benchmarks to amplify the actions of corporations and their influence on corporate peers and contracting partners (§§ V.A. & V.B.)
The author pulls off a difficult feat. The article crosses disciplines that have distinct jargons, assumptions, obsessions, pet peeves, path dependencies. It brings together international law scholarship and corporate governance in a fruitful and rigorous way to address a modern world of shifting roles.
