Ethical transnational corporate activity at home and abroad: A proposal for reforming continuous disclosure obligations in Australia and the United States

Multinational Corporations establish operations in states with lower legal and ethical standards in areas including the environment, wages, labor standards, human rights, corruption, and company taxation. Corporate law scholars cannot be indifferent to the horrific consequences of these lax standards. From contributing to rapes and violent incidents stemming from trade in conflict minerals in the Congo to the killing of workers due to poor conditions in garment manufacturing units in Bangladesh, multinational corporations exploit conditions in developing countries abroad without disclosing their actions at home. We advance a normative argument to clarify and strengthen the existing model of disclosure-based regulation to hold MNCs accountable. We argue that, since the core expectations held by shareholders of companies are the same whether they are operating within our borders or externally, a harmonization of disclosure obligations imposed by law would be a more flexible and less costly solution. We posit that a broader reading of the disclosure obligations of companies under existing legislation like the Reg. S-K in the United States, the continuous disclosure rules under * Dean and Professor of Law, University of Newcastle Law School. Sandeep Gopalan would like to thank Terrie Troxel, Jack Tatom, Professor Bill Wilhelm, and the Networks Financial Institute at Indiana State University College of Business for their valuable support in conducting research for this article. We are also grateful to Audrey Son, Bassam Khawaja, and the editorial staff of the Columbia Human Rights Law Review for their excellent editorial work. ** Solicitor and doctoral candidate, University of Newcastle Law School. 2 COLUMBIA HUMAN RIGHTS LAW REVIEW [46.2:1 the Australian Corporations Act 2001, and listing rules such as those adopted by the Australian Securities Exchange and the New York Stock Exchange would require the disclosure of material corporate practices outside our national borders.