Despite the known moral and practical shortcomings of relying on a “business case” to justify doing the right thing, many organizations continue to act as if bottom-line profits — rather than ethical concerns — must drive all business decisions. In particular, some leaders have argued that the court of public opinion creates a reputational (and thus financial) cost to working with governments or business partners that may have committed human rights abuses. These financial motivations are sometimes implicitly treated as a stand-in for other mechanisms — such as legal requirements — to ensure that businesses respect human rights.
Research: Public Opinion Is Not Enough to Hold Companies Accountable
Customers and other stakeholders won’t always push companies to act in accordance with human rights law.
September 06, 2022
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Summary.
While the court of public opinion can be an effective tool to push companies to avoid involvement with human rights abuses, new research suggests that in certain situations, this mechanism can be insufficient for effectively aligning incentives. In particular, the authors found that the American public is less likely to judge companies negatively when they are involved in certain types of abuses, or when they are more distantly connected to perpetrators, meaning that in certain situations, it may fail to drive companies to adhere to international guidelines. As such, while companies should certainly pay attention to the public, the authors argue that they must not rely on public opinion alone to guide their decision-making. After all, standing up for human rights can sometimes come with a reputational advantage or financial rewards — but it doesn’t always. It’s leaders’ responsibility to do the right thing either way.