Stakeholders and the Corporate Boardroom: Can Trade Unions help promote Corporate Social Responsibility?

by Sabeen Malik February 23 2006, 01:54

I. Introduction

A meeting at the UNEP headquarters in Nairobi, Kenya is focusing on the global trend to include more stakeholders in the corporate governance structure. The aim of this meeting is to promote links between environment sustainability, trade unions, and corporations. These trends are being followed in the U.S. as evidenced by the Securities and Exchange Commission proposal to allow large shareholders a direct voice in the nomination of board of directors.

II. Issues

On January 15-17th 2006, at UNEP Headquarters in Nairobi, the first annual Trade Union Assembly on Labor and Environment took place.[1] The aims of the conference were to reinforce the social and labor dimension of environmental conservation and sustainable development and to strengthen the relationship between UNEP and the world of labor.[2] This gathering recognizes that trade unions have a huge role to play in helping corporations achieve their goals of becoming socially responsible citizens. It was only a few decades ago that relationships between trade unions and the environment seemed suspect.[3] Trade unions considered environmental policies as unduly burdensome on labor and business and that maintaining such a policy would lead to job losses. Environmentalists viewed trade unions as keepers of the status quo especially in industries that were considered environmentally unfriendly.[4] Over time both groups began to realize there were many areas of mutual interest and by working together they could built strong coalitions inside the corporate world. One of the major resolutions that come out of the conference emphasizes the need to “enhance the dialogue between labour and management…to use appropriate tools to increase social and environmental responsibility and accountability… through both trade union and multi-stakeholder participation in genuine initiatives and to ensure that corporate social responsibility involves both compliance with law and voluntary initiatives.” [5]

The ability of trade unions to promote socially responsible corporate behavior and good corporate governance has been evidenced in US corporate boardroom. The evidence is in the growing number of shareholder proposals relating to the environment, labor, and corporate governance.[6] Many people have begun to notice the trend. Al Gore has dedicated his new business venture to sustainable investment and says that Corporate America must face up to green and ethical challenges to avoid disaster.[7] Law makers have begun to realize the role of shareholders in corporate social responsibility and have introduced reform. The Securities and Exchange Commission is considering director election reform to increase shareholder confidence in the corporate governance process.[8] To give shareholders a stronger voice, it has proposed allowing larger shareholders through a proxy-access initiative to nominate members to the board of directors.[9] The hope is that by allowing shareholders a greater role in nominating the board of directors they will have a greater voice.

III. Conclusion

Shareholders are increasingly concerned about corporate governance and social responsibility. They have shown their concern by becoming involved in the proxy process by making proposals on a wide range of topics. If the SEC proposal is adopted, it will bring to fruition one of the main goals of the Trade Union Assembly which is to promote a greater role for stakeholders in the corporate governance structure.

[1] Klaus Toepfer, Laboring for a Greener Planet (Jan. 12, 2006), available at (last visited 2/15/2005).

[2] See Final Resolution of the Trade Union Assembly at its First Meeting, U.N. Environment Programme, 1st Sess., U.N. Environment Program/DPDL/TUALE/2 (2006), available at (last visited 2/15/2005).

[3] Toepfer, supra note 1

[4] Id.

[5] U.N. Environment Program, supra note 2, at 2.

[6] Diane K. Schooley et. al., Corporate Governance Reform: Electing Directors Through Shareholder Proposal, The CPA Journal Online, October 2005, at

[7] (last visited 2/15/2005).

[8] Schooley, supra note 6.

[9] Id.



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