The Reform Of The Duties Of Company Directors

Corporate activities that harm the environment, violate labor and human rights, and corrupt state actors and institutions remain problems in all market economies. The world increasingly demands corporate social responsibility (CSR), but the existing theories and practice cannot always satisfy the emerging demand and resolve the new issues that may arise. Several jurisdictions (including USA, UK, Australia, Indonesia and China) have amended or considered amending their company laws to respond to CSR. A strong case can be made that unless duties are imposed on directors under company law, the CSR agenda might not make much progress. We do not need to know more about what CSR could be. What we need to know is how to make it work! We need to understand what happens in practice and develop the action steps to make CSR work. In this article, the directors'duty related to CSR will be addressed to promote the CSR in practice.This paper is divided into six parts. Part one consists of an overview of why CSR is relevant today and describes and analyzes an example of how changing social expectations influences business environment and corporate conducts, and then contends that the traditional duties of company directors need reforming to obtain its"social licence". Part two makes a comparison among company laws of different jurisdictions such as USA, UK, Indonesia and China. Part three critiques two ways approach CSR-voluntary measures and mandatory ones. It highlights that such voluntary initiatives alone can not cope with CSR issues because of lack of rigorous enforcement and state involvement ,and this paper argues for using capacity-building of legal and regulatory authorities as a way to address these issues. Part four explores the way of explaining the directors'duty related CSR and put forward some challenges facing judiciary in the litigation concerning directors'duty related CSR. Part five poses the difficulties of implementation of the directors'duty related CSR against the background of globalization. A conclusion follows in Part six.