A report to be presented Tuesday to the United Nations Human Rights Council in Geneva has publicly divided two of America's leading authorities on corporate governance: Martin Lipton of Wachtell, Lipton, Rosen & Katz and Ira Millstein of Weil Gotshal & Manges.
In a memo to Wachtell clients, Lipton and associate Kevin Schwartz portray the U.N. proposal as the opening wedge of a global Sarbanes-Oxley regime for human rights. Ultimately, it would "force directors to navigate a maze of procedural imperatives," they warn, and "impose on corporations the obligation to compensate for the [various] deficiencies of the countries in which they conduct business."
Weil Gotshal has responded with an opinion on behalf of pro bono client Oxfam America, urging U.S. business to embrace the U.N. report. Millstein and five prominent colleagues cite the precedent of the Foreign Corrupt Practices Act, which inspired U.S. business to lobby successfully for the creation of global anticorruption conventions. "Rather than being alarmed," Weil concluded, "U.S. corporations should welcome [these] proposals as a means to facilitate leveling of the international corporate playing field by bringing foreign firms in line with U.S. standards for respect of human rights."