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Article

23 Apr 2007

Author:
Kavaljit Singh, Director, Public Interest Research Centre, New Delhi

Corporate Accountability: Is Self Regulation The Answer?

Voluntary approaches have several inherent weaknesses and operational difficulties...First...corporate codes are purely voluntary, non-binding instruments. No corporation can be held legally accountable for violating them. The responsibility to implement the code rests entirely on the corporation...Second...the number of companies adopting such codes is still relatively small...Third, many codes are still not universally binding on all the operations of a company, including its contractors, subsidiaries, suppliers, agents, and franchisees...Fourth, corporate codes are limited in scope and often set standards that are lower than existing national regulations...Fifth, the mushrooming of voluntary codes in an era of deregulated business raises serious doubts about their efficacy...