Such policy safeguards and local engagement have always been smart; now they are essential. A coherent corporate foreign policy should steer a corporation away from complicity in moral wrongdoing that might be committed by its employees and those with whom they deal, including governments. A good policy should also explain what the company is doing, or plans to do, to help improve conditions in the country.
The war on terrorism and the antiglobalization movement have further exposed some of the important connections between political and corporate risk. Whenever a company does business with a corrupt or illegitimate government, it puts itself at risk economically as well as morally. The only rational solution is to develop an internal corporate foreign policy to manage these risks intelligently.
Eric W. Orts, [email protected]
Eric W. Orts is a professor of legal studies and management at the University of Pennsylvania’s Wharton School. He is the author of “War and the Business Corporation,” published in the Vanderbilt Journal of Transnational Law (March 2002).