A New Direction
After a decade of researching voluntary efforts by corporations to address human rights violations, MSI Integrity is embarking on a new and exciting focus: learning from the failures of multi-stakeholder initiatives (MSIs) to move beyond corporations and envision our businesses as centering workers and communities in their ownership and governance. Our work has led us to the conclusion that at the core of corporate human rights abuses is the exclusion of communities from the structures that impact them.
Why look beyond the corporation?
When MSIs emerged in the 1990s, they were considered a potentially transformative experiment in global governance. The premise: to address human rights abuses, corporations would collaborate with the very same organizations that had been previously criticizing them for causing and exacerbating those harms. What’s more, workers and communities who are directly affected by corporate decisions would also have a seat at the table, where voluntary business standards and codes of conduct would be established. But as our report, Not Fit-For-Purpose, demonstrates, it’s nearly three decades later and corporations are the dominant decision makers in MSIs, while rights holder voices are all but excluded. As a result, abuses continue without accountability.
It is in this multi-stakeholder governance space that we observed how major corporations avoid sharing power with other stakeholders—such as rights holders and affected communities—because to do so threatens their obligations to shareholders and their accumulation and management of profit. The failure of MSIs is just one sign that as long as corporations are primarily beholden to investors, not only will companies fail to adequately center vulnerable workers or communities in their business decisions, but they will also resist human rights initiatives that threaten their profits or power and continue to harm the environment.
Companies are run and controlled by a board of directors, executive management, and shareholders, who do not directly experience the on-the-ground consequences of the company’s decisions. They are not the people who live near or work in the mine sites, farmland, or factories where the repercussions of business practices reverberate. This, combined with the fact that boards are legally prohibited from prioritizing community or societal interests above the financial interests of shareholders, means that decision makers in a corporation are neither structurally situated nor primarily motivated to consider human rights impacts. Instead, companies are incentivized—and often obligated—to make whatever decisions will maximize shareholder profits, without sharing those returns with workers or affected communities. This has caused extreme economic inequality between those who own or run companies and those who do not—a divide that is shaped by inequalities in race, class, gender, sexuality, geography, ability, and other forces of social and economic stratification.
Therefore, perhaps the most significant and transformative human rights project is one that has received little attention within the human rights domain: challenging the corporation itself and reimagining our economic enterprises.
What is beyond the corporation?
To us, moving beyond corporations means developing and promoting economic models and policy transformations whereby:
(1) Workers and/or affected communities are at the center of decision-making. What if businesses were legally and operationally accountable not to shareholders, but to the workers and/or the communities affected by their decisions? What if workplace democracy was a universally recognized human right? What if affected communities and workers determined who governed an organization or how that organization was run?
(2) Benefits and ownership accrue to the workers who generate value for a business and/or to the communities and rights holders who are impacted by its behavior. What if the primary economic beneficiaries of enterprises were the workers or wider communities impacted by those businesses? What if businesses who contribute a net harm to society lose their legal license to operate?
Reshaping businesses to reflect these criteria is not only necessary, but possible. One does not need to look very far to see beyond the corporate form. Such economic entities exist today and have existed for millenia; from burgeoning cooperatives in the solidarity economy movement to mutual aid networks in indigenous communities.
There are a number of hurdles to overcome. They range from lack of awareness of these alternative governance and ownership models to legal barriers and limited access to capital for those adopting them. There is also the question of whether and how these models can operate at scale, as well as the risk of corporate co-option.
We believe these models can inspire experimentation, challenge corporate power, and deliver a vibrant economy that rewards and respects workers and communities.
What is our place in this endeavor?
We hope to draw on our expertise in multi-stakeholder governance to ensure that the stakeholders most affected by large corporations—workers and communities—are given meaningful power and control both on paper and in practice, rather than simply offered tokenistic representation or rhetorical inclusion. We believe that MSIs failed because (1) they were neither designed nor operated to be rights holder-centric; and (2) the inclusion of corporations in the initiatives entrenched the power imbalance between stakeholders such that key drivers of abuse went unaddressed. If we are to take human rights seriously, we must apply these lessons beyond MSIs to all human rights and community-based initiatives.
We want to be careful not to reinvent the wheel. There is much to learn from the workers, movements, and individuals who have long been creating and promoting just and sustainable alternatives to the corporation. Organizations, movements, and frameworks inform and practice this work from different angles, pushing us to see the road to economic justice as riddled with intersecting obstacles: the systemic forces of racism, misogyny, transphobia, ableism, colonialism, and other factors that shape and have been shaped by the corporate form.
The next step for MSI Integrity is to determine how we can best contribute to this work. While we are still developing our own specific strategies and approach, we envision mobilizing human rights advocates and researchers to work in solidarity with those from the economic, racial, and environmental justice movements, who are already focusing on these issues. Together, our strategies could include pushing for socially responsible investment funds and investor criteria relating to ownership and community governance; promoting domestic legislation that incentivizes or demands corporate governance and ownership reforms; or directly campaigning for corporations to adopt governance or ownership models that are accountable to their workers, communities, and broader stakeholders. Whatever strategies we decide on, a human rights and community-centered lens will be central to our work.
These are big ideas and goals. We cannot achieve them alone. We welcome input, ideas, or interest in collaboration from the wider human rights community. We are also eager to listen to those already engaged in promoting alternative ownership and governance structures from either lived or learned experiences. We plan to spend much of the next year listening and learning from you, and encourage you to reach out to share ideas, feedback, or thoughts on how we can best develop and target our skills and expertise.
In an effort to make this process as inclusive and transparent as possible, we will publicly document and share the evolution of our internal process.
For more information about this exciting new focus, please contact us.