Multinational Companies: Of Institutional 'Spheres Of Influence', Corporate Social Responsibility and Meaningful Financial Sector Law Reform for Developing Countries

Abstract

This paper develops the following points: (i) that the large corporate entity, in our modern society, should be an “ethical person” on the organizational, individual and social levels; (ii) that, as such, the modern corporation can then establish sound corporate governance, legal compliance and a “triplebottom line” modeled Corporate Responsibility and Sustainability/Responsible Corporate Citizenship (CRS/RCC) programme; (iii) that, in doing so, the multinational companies (MNC) should take a coordinated “stakeholder” perspective and a longer-term view of “shareholder value” and of “the best interest of the corporation” (In author’s view, it should not be an either/or proposition between shareholder wealth enhancement and CSR on a sustainable basis); (iv) that the end MNC goal should be Responsible Corporate Citizenship; and (iv) that in a global context, the MNC and particularly global financial institutions (with their significant knowledge and technology “banks” and significant spheres of influence) can make meaningful general and specific contributions to accessible, fair and equitable development of the financial sector in developing countries.

Responsible Corporate Citizenship presupposes that both the large corporation and government have responsibilities to the broader society. In many situations, government, the MNC and the IFI should work toward establishing complimentary, working public-private partnerships. For the MNC, the key is for CSR/RCC to become integrated within and throughout the corporate organization/group and otherwise to become rooted firmly in and throughout the “corporate culture” and to one or more specific corporate strategy (an integrated notion of enlightened self interest). Further, a successful, broader embedding of CSR within a particular economy/society assumes and requires the pre-existence of a suitable, supportive and non-corrupt legal, administrative and judicial infrastructure that embraces and fosters social justice, human dignity, environmental sustainability, and responsible corporate“citizenship.”