Corporate Governance and the Global Social Void

This Article argues that the components of globalization--economic integration, democratization, and global governance networks--are changing the nature of corporate governance and the prospects for peace. Multinational enterprises are the instruments of economic integration. As such, multinationals as a group deserve credit for the positive productivity-related wealth effects of the process. As the implementing institutions, these enterprises are also inextricably related to the inequality--the social void--resulting from globalization that threatens peace. Hyper competition in the global product markets and the demands of the financial markets determine, to a large extent, the activities of the multinational. Alternatively, there is an evolving opportunity for management to participate in a socially positive way with global governance networks that are gradually assuming the regulatory role from national governments. Within these market and governance constraints, individual firms have an opportunity to mitigate the negative pressures on their various constituencies, thus contributing to development and the prospect for peace. The Article includes a model for balancing the productive, social, and environmental role of the enterprise