Why Corporate Disclosure Requirements are an Inadequate Form of Regulation in the Context of Global Supply Chains
Global supply chains present major challenges for company law and corporate governance, nationally and internationally. Their increasing relevance in international business has led to a serious regulatory gap, especially in light of the reality of corporate involvement in human rights abuses, labour exploitation and environmental degradation. Alongside a number of international norms such as the UN’s Guiding Principles on Business and Human Rights, there has been a proliferation of ‘hard’ and ‘soft’ disclosure provisions, mandatory and voluntary, national and international, demanding greater transparency in response to these challenges.
In this paper I argue that disclosure is not a sufficient answer to such problems and does not adequately fill the regulatory gap in this context. I describe the structural complexities of supply chains and I argue that whilst potentially important, the disclosure requirements have added to the complexities and failed to make companies up, down and within the chains any more accountable. At best, this disclosure landscape may be viewed as a starting point for the development of a transnational regulatory order for multinational corporations and global supply chains. At worst, it could be seen as exacerbating the problems.
In this paper, I explore the strengths and weaknesses of some of these disclosure initiatives and consider their potential contribution to a more effective transnational regulatory infrastructure.