Aligning Corporate Governance with ILO Labor Standards: Challenges and Opportunities for Multinational Enterprises
DOI:
https://doi.org/10.56830/IJHMPS06202604Keywords:
Corporate Governance, Labor Standards, International Labor OrganizationAbstract
Multinational enterprises increasingly recognize the importance of aligning corporate governance frameworks with International Labor Organization requirements, but scholarship on this intersection remains limited. This paper addresses that gap by synthesizing evidence that improved governance mechanisms notably enhance labor compliance throughout international operations. The International Labor Organization establishes foundational requirements for respectable work—encompassing freedom of association, collective bargaining, non-discrimination, and workplace safety—that multinational firms have to operationalize through corporate decision-making systems and supply chain governance. Contemporary multinational businesses navigate competing pressures from regulators, shareholders, and civil society while managing labor-related human rights obligations across jurisdictions. Stakeholder-centric governance frameworks provide promising pathways for forums to institutionalize labor issues within operational workflows. Evidence demonstrates that active board oversight, strong due diligence mechanisms, and independent verification structures significantly improve compliance outcomes compared to voluntary codes alone. Leading multinationals in electronics, clothing, and extractive industries have correctly incorporated ILO-aligned measures into center governance systems, promoting both compliance and stakeholder engagement. However, effective implementation remains constrained by functional governance potential gaps in host nations and chronic deficiencies in corporate disclosure verification. This paper argues that integrating ILO standards into company governance constitutes both a strategic imperative for operational resilience and a mechanism for advancing sustainable development. Recommendations emphasize bolstered board duty, comprehensive supply chain due diligence, and unbiased outside verification regimes.
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