INTRODUCTION

Corporate accountability can be defined as the ability of those affected by a corporation to

hold corporations to account for their operations. This concept demands fundamental changes
to the legal framework in which companies operate. These include placing environmental
and social duties on directors to complement existing duties on financial matters, and legal
rights for local communities to seek compensation when they have suffered as a result of
directors failing to uphold those duties (Friends of the Earth, 2005).

Instead of urging companies to voluntarily give an account of their activities and impacts to
improve their social and environmental performance, the corporate accountability
‘movement’ believes corporations must be ‘held to account’ – implying enforceability. This is
a more radical position than that of CSR (corporate social responsibility) advocates. Over the
years, NGOs and local stakeholders around the world have fought countless campaigns
against companies over specific issues. Sometimes, firms have been brought to court. Well-
known cases have arisen under the US ATCA (Alien Tort Claims Act) statute demanding
compensation for the environmental liabilities (or ecological debts) left behind by
companies.

Consumer campaigns have persuaded thousands of shoppers to buy recycled paper, fair trade
and organic coffee, tea, chocolate and bananas, GM-free food, timber that has been certified
as sustainable by the Forest Stewardship Council (FSC), and so on. This is called Green
Consumerism. From a corporate accountability perspective, green consumerism and
voluntary CSR places a focus on the consumer and on the individual company (often located
in the North) and ignores the issues of social and environmental justice for communities
(often located in the South).

This begs the question of whether it is right for Northern governments to put the onus on
individual and corporate voluntarism, while sitting back and doing nothing as indigenous
communities are pushed off their land and rainforests cleared to produce cheap bauxite, oil or
gas, or palm oil for Northern consumers. NGOs say that if we are serious about social and
environmental justice, the time has surely come to mainstream common standards on social
and environmental performance. The way to do this is through changes to the legal
framework that would allow people to hold corporations to account for social and
environmental wrongdoing.

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As summarised in a report commissioned by the United Nations Research Institute for Social
Development (Utting and Clapp, 2008), the emerging corporate accountability agenda
includes proposals to establish institutional mechanisms that hold corporations to account,
rather than simply urging companies to improve standards or to report voluntarily. Corporate
accountability initiatives promote complaints procedures, independent monitoring,
compliance with national and international law and other agreed standards, mandatory
reporting and redress for malpractice.

THE NEW PROVISIONS IN COMPANIES ACT 2013, FOR PROTECTING RIGHTS

OF STAKEHOLDERS In order to prevent the companies from slipping into sickness and
insolvency, the Companies Act 2013, has introduced certain measures like Corporate
Criminal liability, One Person Company, whistle blower, class action suit, rotation of
auditors, SFIO, rotation of auditors and most importantly setting up of NCLT, which is likely
to make the liquidation process more fast, efficient, less rigid and it will go a long way in
inducing confidence in the stakeholders. These provisions of the Companies Act 2013 are
preventive in nature as they will make the management of the company transparent and
accountable and thus may prevent the company from becoming sick and getting pushed into
liquidation. This chapter shall deal with:

 CORPORATE CRIMINAL LIABILITY

 ONE PERSON COMPANY

 WHISTLE BLOWER

 CLASS ACTION SUIT

 CORPORATE SOCIAL RESPOSIBILITY

 CLEAR DEFINITION OF FRAUD AND STRINGENT PUNISHMENT

 SFIO

 SETTING UP OF NCLT

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CORPORATE CRIMINAL LIABILITY

Truly, the criminal law has been the vehicle for preventing crimes. Companies are
progressively noteworthy performing artists in our economy and, to the degree their activities
can defraud and harm the society, they too ought to be punished.
The corporate identity of an organization or corporate entity is separate and different from
the promoters, shareholders and members of the company. This is a broadly known guideline
in law and has its source in the landmark case of Solomon v. Solomon. For this situation,
the Court held that the company is unique in relation to the general people who are into the
running of the organization. The abuse of this rule prompted "Lifting of the Corporate Veil"
wherein the investors or creditors of the company are safeguarded if the organization is
involved in any kind of fraudulent practices or other criminal performances. 1 In the
legislation which defines crimes, the denial is generally directed against any individual who
has committed an act prohibited by law of the land. In numerous statutes the term -
individual has been defined. Section 3(42) of General Clauses Act, 1897 defines person as:
Person shall include any company or association or body of individuals, whether
incorporated or not. A company can sue and be sued in its own particular individual name.
The corporate entity can be prosecuted against in criminal cases. But it is quite ineffective as
the company cannot be punished with detention or can be awarded a death sentence. The
only punishment that can be inflicted on the corporate entity is by way of fine, which at
various occasions is quite trivial. The question which arises then is as to whether a corporate
entity can ever be prosecuted for criminal offences and be punished with more than just
money related fine.
The contention on the priority of crediting criminal liability to company in India is a long
way from being done. There have been views expressed both in support and against
corporate criminal liability. The rivals of the similar contend that a corporate entity does not
have mind of its own, therefore it cannot exhibit the moral turpitude, or negative intent which
is needed to build up a criminal guilt. Moreover they argue that it would be useless to treat a
company

as if it possesses a blameworthy state of mind which, by definition, it can neither have nor
come to possess. In addition to this, they contend that since it is impossible to send an
organization behind the bars, it thwarts any endeavour to achieve the objectives of

1 Kapoor.N.D., Elements of Company Law, 27th edition, Sultan Chand & Sons.Delhi,2003

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deterrence, punishment and rehabilitation, as sought after by penal sanctions. Those who
advocate corporate criminal liability argue that corporate entities are not fictions. They exist
and occupy a tangible, overwhelming position within the society, and are as capable as
human beings, (if not more) of causing hurt. Hence, it is just and reasonable to treat them like
natural persons and hold them responsible for the crimes they have committed. Corporation
which have the power to affect the society are required to respect the fundamental, basic
values of the same. These qualities are upheld by criminal law, and in this way drawing an
obvious conclusion, corporate persons should be held criminally liable. In the course of the
last century, wrong doing has developed from being a single perpetrator, singular acts to
white-collar crimes, being monstrous in nature and spreading over outskirts.
While taking a gander at criminal liability in a general sense, it can fasten only those acts in
which there is a violation of criminal law, which means that there can be no liability without
a criminal law which forbids certain demonstration or exclusions. The essential rule of
criminal liability spins around the fundamental Latin proverb ―actus non facit reum, nisi
mens sit rea.2
It means that for one to be liable, it must be shown that an act or omission has been done
which was forbidden by law and the same has been done with guilty mind. Hence every
crime has two elements: the physical element (Actus Rea) and the mental one (Mens Rea).
Here, the question emerged concerning how a corporate entity could be believed to have a
guilty mind. In the Bhopal Gas Tragedy, Union Carbide was held to be criminally liable,
however basically in light of the fact that it was held to be strictly liable, wherein mens rea
was pointless.

EVOLUTION OF CORPORATE CRIMINAL LIABILITY IN INDIA

In Oswal Vanaspati & Allied Industries v. State of U.P. 3, the Full Bench of the Allahabad
High Court held that: ―A company being a juristic person cannot obviously be sentenced to
imprisonment as it cannot suffer imprisonment. The question that requires determination is
whether a sentence of fine alone can be imposed on it under Section 16 of the Act or whether
such a sentence would be illegal and hence cannot be awarded to it. It is settled law that
sentence or punishment must follow conviction and if only corporal punishment is prescribed

2 Singhvi, Angira. "Corporate Crime and Sentencing in India: Required Amendments in Law", International
Journal of Criminal Justice Science, Vol 1 Issue.2 July 2006; available at:<
http://www.sascv.org/ijcjs/angira.pdf> accessed on 24 th July 2016.
33 1993 1 Comp LJ 172

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a company which is a juristic person cannot be prosecuted as it cannot be punished. If,
however, both sentence of imprisonment and fine is prescribed for natural persons and
juristic persons jointly then though the sentence of imprisonment cannot be awarded to a
company, the sentence of fine can be imposed on it. Thus, it cannot be held that in such a
case the entire sentence prescribed cannot be awarded to a company as a part of the sentence,
namely, that of fine can be awarded to it. Legal sentence is the sentence prescribed by law. A
sentence which is in excess of the sentence prescribed is always illegal but a sentence which
is less than the sentence prescribed may not in all cases be illegal.‖
In the case of Standard Chartered Bank & Others v. Directorate of Enforcement &
Others4, the Supreme Court considered the issue as to whether a company, or a corporation,
being a juristic person, could be prosecuted for an offence for which the punishment is
mandatory imprisonment and fine; and if found guilty, whether the court has the discretion to
impose a sentence of fine only. The Hon‘ble Supreme Court held that ―there is no dispute
that a company is liable to be prosecuted and punished for criminal offences. Even though
there are earlier authorities to the effect that corporations cannot commit a crime, the
generally accepted modern rule is that except for such crimes as a corporation is held
incapable of committing by reason of the fact that they involve personal malicious intent.‖
The court further added that ―a corporation may be subject to indictment or any other
criminal process, although the criminal act was committed through its agents.‖ However, the
question of whether or not a corporation could be held liable for crimes requiring mens rea
was still left open.

CLASS ACTION SUIT

The origination of Class Action Suits‘ is one of the numerous change presented in the
Companies Act, 2013 vide Section 245. The idea of Class Action is not new but rather in
Indian setting, it has discovered acknowledgment and enforceability now just by methods of
Companies Act, 2013.The class action suit‘ first time went to be featured with regards to
securities market, when the Satyam scam came into picture in the year of 2009. Hence, the
Indian creditors in India couldn't take any legal action against the organization while their
partners in USA filed class action suit‘ demanding compensation‘ from the company. 5This
instrument has been developed to conquer the notable `Collective Action' issue, where suits

4 (2005) 4 SCC 530

5 Dhanapal Sheerpati, Class Action Suit under Companies Act,2013;available at:<
http://corporatelawreporter.com/2013/12/18/class-action-suits-companies-act-2013/> accessed on 7 th
October,2016.

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by small stakeholders‘ are not practical, thus may never get filed. Accordingly, this is
relevant not simply in corporate law, but rather in all cases.

CONCEPTUALIZATION IN INDIAN SCENARIO

It was the Satyam scam which broke out in 2009, which brought into spotlight the class
action suit came in the context of securities market. At that time, the Indian investors in India
couldn't take any legal recourse against the company while their counterparts in USA filed
class action suit claiming damages from the company and the auditing firm. 6 Provision
relating to class action suit is mentioned in Section 245 of the new Companies Act, 2013. In
straightforward terms, ‗a class action‘ suit refers to a lawsuit that permits a huge number of
individuals with a ‗common interest‘ in a matter to sue or be sued as a group. It is a
procedural gadget empowering one or more plaintiffs to file and prosecute litigation on
behalf of a bigger group or class, wherein such class has common rights and grievances.

PROVISIONS DEALING WITH CLASS ACTION SUIT MENTIONED IN

COMPANIES ACT, 2013

Section 245of the Companies Act, 2013 (Act) consists of the various provisions dealing with
the Class Action Suits which are discussed as follows.
Section 245. of Companies Act,3013 –Class Action- (1) Such number of member or
members, depositor or depositors or any class of them, as the case may be, as are indicated in
sub-section (2) may, if they are of the opinion that the management or conduct of the affairs
of the company are being conducted in a manner prejudicial to the interests of the company
or its members or depositors, file an application before the Tribunal on behalf of the
members or depositors for seeking all or any of the following orders, namely:— (a) to
restrain the company from committing an act which is ultra vires the articles or memorandum
of the company; (b) to restrain the company from committing breach of any provision of the
company‗s memorandum or articles; (c) to declare a resolution altering the memorandum or
articles of the company as void if the resolution was passed by suppression of material facts
or obtained by mis-statement to the members or depositors; (d) to restrain the company and
its directors from acting on such resolution; (e) to restrain the company from doing an act
which is contrary to the provisions of this Act or any other law for the time being in force; (f)
to restrain the company from taking action contrary to any resolution passed by the members;

6 http://taxguru.in/company-law/class-action-suits-companies-act-2013.html#sthash.r3rB16AO.dpuf

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(g) to claim damages or compensation or demand any other suitable action from or against—
(i) the company or its directors for any fraudulent, unlawful or wrongful act or omission or
conduct or any likely act or omission or conduct on its or their part; (ii) the auditor including
audit firm of the company for any improper or misleading statement of particulars made in
his audit report or for any fraudulent, unlawful or wrongful act or conduct; or (iii) any expert
or advisor or consultant or any other person for any incorrect or misleading statement made
to the company or for any fraudulent, unlawful or wrongful act or conduct or any likely act
or conduct on his part; (h) to seek any other remedy as the Tribunal may deem fit.

THE SERIOUS FRAUD INVESTIGATION OFFICE (SFIO)

The Serious Fraud Investigation Office (SFIO‖) is a fraud investigating bureau in our country.
The SFIO is a multi-disciplinary association and was set up by Govt. of India under Ministry
of Corporate Affairs, comprising of specialists in the diverse fields for identifying and
prosecuting crimes/frauds pursuance to Government of India by methods of a resolution
dated 2nd July 2003 (Resolution No. 45011/16/2003-Adm-I) and was later given formal
lawful status vide Section 211 of the Companies Act, 2013. SFIO is an organisation formed
on the recommendations of Naresh Chandra committee which was approved in January 2003.
At first SFIO did not enjoy a formal lawful status. It completed examinations in the
suspected cheats and fraud within the current legal system under Section 235 to 247 of the
past Companies Act, 1956 - as an executive agency‘ on behalf of the Central Government or
a Court of competent jurisdiction‘. There is no reference of SFIO in the Companies Act,
1956, however different officers of SFIO have been approved under Section 621 of the
Companies Act, 1956 (as individual approved by Central Government) to record complaints
against defaulting organizations. SFIO got statutory acknowledgment once the new
Companies Act, 2013 was formulated. In the new Companies Act, 2013, powers, for
example, treating the examination reports which is filed by SFIO officers as a report recorded
by a Police Officer, power to capture the suspected, power to issue letter of request in cases
including corporate entity having business/interests outside the nation and so forth are
allowed. (The Companies Act 1956 did not have any arrangement for examination/gathering
of proof on account of transactions and people based outside India. Other investigating
offices like CBI and Enforcement Directorate have these powers. (Wherever required, the

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matters of international ramifications were referred to CBI and / or Enforcement Directorate
and both these agencies were looking into the issue of defaulting companies abroad.)
This office was set up to investigate corporate frauds of very serious and complex nature.
SFIO is a multidisciplinary investigating office, wherein specialists from

(i) banking;
(ii) corporate undertaking;
(iii) tax assessment;
(iv) forensic audit;
(v) capital market;
(vi) information technology;
(vii) law; or
(viii) such different fields as may be prescribed, work together to unearth a corporate
fraud. The authority of SFIO is constrained to investigating frauds related to a
company under the Companies Act and its investigation is viewed separately from
other normal investigation into the affairs of the company.

SATYAM CASE: Serious Frauds Investigation Office (SFIO) an agency to break complex
white collar crimes to investigate the money related inconsistencies in Satyam Computer
Services and report its findings in three months .Serious fraud investigation officer examined
and investigated the satyam case and came to the conclusion that the independent directors‘
did not know about existence of such fraud in accounts and they were kept in dark by
chairman of company. The government of India had ordered SIFO for investigating such
when they discovered 7800 crore scam and fraud at the organisation by the chairman.

CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility‘ is not a new concept that came into existence to explode after
the development of industrialization. India has a long tradition of paternalistic philanthropy.
The process, though acclaimed recently, has been followed since ancient times albeit
informally. Philosophers such as Kautilya from India and pre-Christian era philosophers in
the West preached and promoted ethical principles while doing business. The concept of
helping the poor and disadvantaged was cited in several ancient literatures. In the pre-
industrialized period philanthropy, religion and charity were the key drivers of CSR. The
industrial families of the 19th century had a strong inclination toward charity and other social
considerations. However, the donations, either monetary or otherwise, were sporadic
activities of charity or philanthropy that were taken out of personal savings, which neither
belonged to the shareholders nor did it constitute an integral part of business. During this

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period, the industrial families also established temples, schools, higher education institutions
and other infrastructure of public use.7
The term CSR itself came into common use in the early 1970s. The last decade of the
twentieth century witnessed a shift in focus from charity and traditional philanthropy toward
more direct engagement of business in mainstream development and concern for
disadvantaged groups in the society. In India, there is a growing realization that business
cannot succeed in isolation and social progress is necessary for sustainable growth. An ideal
CSR practice has both ethical and philosophical dimensions, particularly in India where there
exists a wide gap between sections of people in terms of income and standards as well socio-
economic status.8
The Companies Act 2013 (Companies Act) has presented various new provisions which
change the face of Indian corporate business. One of such new concept is Corporate Social
Responsibility (CSR). The concept of CSR is based on the philosophy of give and take. The
Companies take resources in the form of raw materials, human resources and so on from
the society. By performing the assignment of ‗Corporate social responsibility‘ activities, the
companies are trying to give something back to the society.
Section 135 of the Companies Act provides the limit for applicability of the CSR to a
Company i.e. ―(a) net worth of the company to be Rs 500 crore or more; (b) turnover of the
company to be Rs 1000 crore or more; (c) net profit of the company to be Rs 5 crore or
more.‖
Further according to the CSR Rules, the provisions of CSR are not only applicable to Indian
companies, but are also applicable to branch and project offices of a foreign company‘ in
India.
Each qualifying company is required to spend at least 2% of its average net profit for the
immediately preceding three financial years on CSR activities. In addition to this, the
qualifying company will be required to constitute a committee (CSR Committee) of the
Board of Directors (Board) comprising of three or more directors. The CSR Committee shall
after forming a policy demonstrating the activities to be taken up as a part of Corporate
Social
Responsibility recommend to the Board; suggest the amount of expenditure to be incurred on

7 Corporate Social Responsibility in India (Potential to contribute towards inclusive social development) Global
CSR, Summit 2013, An Agenda for Inclusive Growth; Available at:<
http://www.ey.com/Publication/vwLUAssets/EY-Government-and-Public-Sector-Corporate-Social-
Responsibility-in-India/$File/EY-Corporate-Social-Responsibility-in-India.pdf> accessed on 11 th October 2016.
8 Bajpai, G.N. , Corporate Social Responsibility in India and Europe: Cross Cultural Perspective, 2001;

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the activities referred as well as to monitor the CSR Policy of the company. The Board shall
take into account the recommendations put forward by the CSR Committee and thereafter
approve the CSR Policy of the company.

CORPORATE PHILANTHROPY & CORPORATE SOCIAL RESPONSIBILITY:

CORPORATE PHILANTHROPY
Those exercises that corporate entities will fully embrace to positively affect society,
including financial contributions, contributing items and services, volunteerism, and different
business exchanges for the advancement of a cause, issue or non-benefit association is called
corporate philanthropy‘. Donation of cash and other corporate assets to social causes is
additionally viewed as corporate philanthropy‘.
Corporate philanthropy‘ refers to the activities of companies of all sizes and various sectors
making magnanimous contributions to tackle a variety of social, economic and other issues
as
part of their overall corporate citizenship‘ technique. It forms a noteworthy connection
between the corporate entity and its communities.

CORPORATE ACCOUNTABILITY:
Accountability in its basic sense implies rendering of accounts and, by extension, indicate
answer-ability to an external agency or group and, further, implies ensuring propriety,
legality and safeguarding public interest in satisfying of the hopes of the external agency or
group. Social accountability‘ implies accountability to the people. This is the central part in a
democratic set-up. In a decentralised democracy the most basic goal is to provide power to
the common man.
Today Corporate accountability‘ traverses developing CSR issues like business morals,
decent variety, commercial centre conduct, administration, human rights and worker rights
and in addition to this more traditional areas of monetary and environmental activities. Thus,
an expanding number of corporate personalities are revealing openly on their social,
ecological and moral performances, both as a communication to stakeholders and as an
administration instrument. In any case, as this training has just turned out to be more
prevalent since the mid-1990s, there are so far no standard arrangements to address the kind
of data companies choose to report, or how that data is gathered, investigated and displayed.
Successful and accountable management framework enable companies shape cultures that
help and reward CSR performance at all levels.

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CSR AND GOOD GOVERNANCE:
A standout amongst the most important issues inside the Corporate Social responsibility‘
agenda concerns the dynamic connection amongst CSR and great public governance. The
limits both to corporate responsibility through law and to "deliberate" CSR-related activities
by organizations lie with the public good governance programme.
Enactment to manage most pessimistic scenario, examples of reckless conduct and to set a
base floor for business conduct won't work without powerful drivers for business execution
and enforcement, regardless of whether they are market-based‘, or an after effect of
implementation through the state. The need of the hour is to implement social, moral and
environmental policy commonly known as codes of conduct‘ through the development of
objectives, programmes and mechanisms for observing social compliance execution. One
very significant facet of ensuring social accountability‘ is establishment of social
compliance through the method of constant auditing and monitoring. Today the requirement
for increased corporate accountability‘ is needed in all sectors. So we can say that social
accountability removes ambiguity, reduces loop holes, forces proper expenditure of funds,
generates faith and harmony, and forms demand led enhancement in services. So, it is a
regular audit and a continuous check on malfeasance.

NATIONAL COMPANY LAW TRIBUNAL (NCLT)

There is a noticeable fashion around the globe towards rationalisation of business activities
and simplification of statutes for its proper governance. This trend is being driven to a certain
extent, by the utilization of electronic communication and information technology that has
speeded up business transactions as well as making them global. Time is, along this line,
ready to guarantee ripe that dispensation of justice and disposing of business matters by the
court and authorities ought to be tuned in to the speed with which business is being carried
out. In addition to this certain business matters require specific domain knowledge in order to
deal with the issues reasonably. Keeping in mind the backlog of legal cases and the
requirement for specialized knowledge‘ of the persons discharging the duty of adjudicating
the issues involving intricate issues relating to the subjects, the process of setting up of
specialized tribunals has gained momentum over a period of time.
The birth of setting up of specialized tribunals can be traced in the Apex court judgement in

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Sampath Kumar case9. In this case while adopting the theory of alternative institutional
mechanism‘ the Supreme Court stated that ―since independence, the population explosion
and
the increase in litigation had greatly increased the burden of pendency in the High Courts.‖
The Supreme Court further mentioned the studies conducted towards relieving the High
Courts of their ever increasing case loads; the recommendations of the Shah Committee for
setting up independent Tribunals and likewise suggestion of the Administrative Reforms
Commission for setting up of Civil Service Tribunals.
The Ministry of Corporate Affairs (MCA) published a notification with regard to the
establishment of the National Company Law Tribunal (NCLT) and National Company Law
Appellate Tribunal (NCLAT) which will come into effect from the June 01, 2016. The
formation of the above mentioned Tribunals is in exercise of the powers conferred by
Sections 408 and 410 respectively of the new Companies Act, 2013. The Companies
(Second Amendment) Act, 2002 has provisions relating to the establishment of a National
Company Law Tribunal and Appellate Tribunal to substitute the priestly existing Company
Law Board‘(CLB) and Board for Industrial and Financial Reconstruction‘ (BIFR). The
formation of the NCLT as a specialized institution for corporate justice is based on the
proposals made by the Justice Eradi Committee. It was a committee which was set up to look
into the current laws relating to winding up proceedings of companies in order to alter it in
line with the most recent advancement and development in the corporate law and governance
and to recommend changes in the technique at various stages followed in the insolvency
proceedings of companies to avoid superfluous delays in tune with the global practice in this
field. The setting up of the NCLT and NCLAT is a piece of the endeavour to move to a
regime of speedier resolution of corporate disputes, and therefore improving the ease of
doing
business in India. NCLT and NCLAT will likewise pave the path for the speedier
implementation of the insolvency and bankruptcy code. Their formation is expected to
reduce the burden on courts. According to Live mint, which is an Indian daily, reported that
government data revealed that 48,418 civil cases were pending before the Supreme Court of
India as of mid-February 2016, 3.116 million civil cases pending before the high court as of
December 31, 2015 and 8.234 million civil cases pending before the district and subordinate
courts.‖

9 S P Sampath Kumar v. Union of India ,1985 (4) SCC 458.

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In R. Gandhi, President, Madras Bar Association v. Union of India 10 the petitioner
challenged the constitutionality for creation of NCLT and NCLAT on the ground that
Provisions regarding formation of NCLT and NCLAT are ultra vires of Article 14 of the
constitution‖. The Supreme Court held that the Parliament‘s power to create National
Company Law Tribunal and National Company Law Appellate Tribunal is clearly traceable
to Entries 43 and 44 of List I.‘ The Court also viewed that Parliament is thus competent to
enact law with regard to the incorporation, regulation and winding up of Companies. The
power of regulation would include the power to set up adjudicatory machinery for resolving
the matters litigated upon, and which concern the working of the companies in all their
facets.

10 (2010)11 SCC 1

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CONCLUSION Perhaps the most important innovation of the corporate accountability
movement has been its demands for increased participation by affected groups. This has been
shown to be extremely important in many contexts as a basis for effective compliance with
specified norms. In the few and often short-lived cases in which worker organization or
representation has been established, positive outcomes for workers have often been achieved,
both in factory settings and among home workers. Participation in initiatives can feed into
underlying changes to social power relations via their spill-over into campaigning activities,
and their potential to create sustainable social alliances between workers, producers and
communities affected by transnational business activity. However, such participatory, multi-
stakeholder processes do however tend to confront a range of practical challenges associated
with both weak capacity among key stakeholder groups to engage effectively, and in some
cases also difficulties in mediating conflicting priorities of affected stakeholders. Clearly,
significant challenges continue to confront all these different strategies of corporate
accountability. However, to view these initiatives as static institutional arrangements
misunderstands their purpose and impact – as both experimental, learning devices in specific
governance contexts, and as broader vehicles for social transformation via their provision of
ongoing sources of knowledge and pressure that can leverage processes of progressive
change within wider social and political institutions. Much uncertainty remains and a great
deal more experimentation will be needed as corporate accountability initiatives continue to
be formed and improved, either as stand-alone forms of corporate regulation or in
conjunction with other strategies.

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