Corporate Human Rights Violations as a Governance Problem

Many prominent multinational corporations have been accused of violating a range of human rights recognized in international agreements, principles, and guidelines. There is a temptation to diagnose these violations as yet further proof of a fragile and, often, dysfunctional international legal system that cannot protect the rights of individuals. These human rights violations are frequently cast as governance failures of the international system, its rules and actors. It is true that international law institutions can do more to target the behavior of corporate actors that commit human rights abuses. The United Nations Guiding Principles on Business Human Rights (UNGPs) and other international guidelines recognize that corporations and other businesses have responsibilities to prevent, mitigate, and address human rights violations but they only go as far as the enterprise-level. Critically, they fail to specify the internal allocation of responsibility for the protection of human rights. So, yes, there are governance failures at the international level. But these international level governance failures should not distract us from the primary governance failures at the root of many corporate human rights violations: failures of corporate governance. 

In recent examples of corporate human rights violations, boards of directors and officers failed to oversee the human rights risks created by the firm’s operations, which caused subsequent harms to individuals and communities and led to litigation, regulatory, and reputational risks for the firm. In other situations, directors and officers authorized the very actions that led to the human rights violations. In fact, there is a pattern of governance failures that are associated with corporate human rights violations. Specifically, directors and officers are implicated in these violations by their following actions or inactions: 

• Failure to Oversee Human Rights Risks
• Approval of Financing Agreements with Human Rights Violators
• Approval of Revenue Sharing Agreements with Human Rights Violators
• Approval of Firm Business Model Dependent Upon Human Rights Violations

Many recent examples of corporate human rights violations involve one or more of these governance failures by the corporate board and senior management. Of these four categories, I would suspect that the first and last categories describe situations that are more likely to arise across a broad swath of firms. Corporate boards might downplay or dismiss the importance of monitoring human rights risks associated with their operations, which later leads to harm to external parties and a variety of risks to the firm. In this way, corporate boards fail to live up to their risk management function when they ignore the ways their decisions can violate the rights of others – and how those violations can pose future risks to the firm. The last type of governance failure implicates the corporate board’s role in strategic development and choice of business model. Some business models cannot be redeemed; by their very operation, they will violate human rights. That is not an outcome that can be mitigated through enhanced monitoring and audits. Instead, it is built into the very design of the business model. Corporate boards that opt for these business models play a pivotal role in facilitating the human rights abuses that their firms inevitably commit.

Recognizing corporate human rights abuses as governance failures leads to several important consequences. First, it clarifies that corporate human rights practices are not separate from issues of corporate governance but are instead products of governance failures. As such, they potentially signal the existence of broader governance failures at the firms that commit human rights abuses. Many recent corporate human rights abuses can be traced to poor governance decisions at the board level, consistent with the typology discussed above. As such, these incidents signal not isolated lapses but broader deficiencies in oversight, risk management, and accountability within the firm. Their prevention therefore depends on governance reforms, particularly those that strengthen board engagement with human rights risks. 

Second, and related, it challenges the notion that human rights governance—often grouped within environmental, social, and governance (“ESG”) frameworks—is separate from core discussions of what constitutes good governance; rather, effective oversight of human rights is integral to it. Under this view, a firm that is governed well is one that systematically identifies, assesses, and manages its human rights risks. This means that oversight of human rights is not only of importance to those who care about human rights but also those who care about good governance.

Third, it identifies the role of the corporate board and senior management in preventing human rights abuses. International institutions – like the UNGPs – may effectively ignore corporate directors and officers because policymakers may not recognize their involvement in the corporate human rights abuses they seek to prevent. This typology corrects this potential mistake by highlighting how these corporate decision-makers are critically involved in these abuses. We might, therefore, hope that future international policymaking will sufficiently account for their role in these abuses and include governance decisions within the ambit for reform.

Finally, it alerts corporate boards and those who advise them to blind spots in their governance practices that, if addressed, can prevent future human rights violations by corporations and other businesses. 

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Kish Parella is the James P. Morefield Professor of Law at Washington and Lee University School of Law, and an ECGI Research Member.

This blog is based on a discussion held at the Intesa Sanpaolo Business Law and Regulation Conference: "Directors' responsibilities in a time of change" on 6th March 2026. Visit the event page to explore more conference-related blogs.

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