Sexual Harassment and the Corporation in Australia and Japan: the Potential for Corporate Governance of Human Rights

Corporations are undergoing a subtle transformation. Usually regarded as investment vehicles for shareholders,1 corporations are now assuming an additional identity—as entities which share responsibility for upholding human rights.2 This new identity does not sit comfortably with conventional wisdom on corporate governance. Traditional corporate governance theory, based on nineteenth century notions of trust, posits that 'the company' is a legal entity embodying the members from time to time.3 Directors, as trustees of corporate assets, owe duties to foster the interests of the shareholders by maximising their investments.4 Under this view, directors do not owe wider obligations to society. This traditional understanding, however, is beginning to yield to more recent legal and social pressures. Legal developments in regulatory practice, in combination with an upsurge in social movement activism, is now forcing corporations to accept that they are more than mere economic entities.5 They are also private 'governments'6