An ethical black hole called James Hardie

Abstract

The paper highlights issues that are likely to arise more frequently as globalisation gathers pace. The most important of these is the ease of international ‘relocation’ as a means of evading corporate social responsibility. Another is a directors’ duty with regard to commissioned reports. A further issues is whether it is desirable to add ‘social responsibility’ to the legal definition of directors’ duties. The case of James Hardie highlights what can happen when regulation of corporate social responsibility is absent. The legal and ethical responsibilities of this company were open to disagreement. To avoid new and undesirable regulatory arbitrage, greater international alignment of corporate law may well be necessary. In a world where closer scrutiny is given to business behaviour than in the past, social responsibility may need to become more explicit in company law.