Interview with Michael Posner on his new book, “Conscience Incorporated: Pursuing Profits While Protecting Human Rights”

By Cecely Richard-Carvajal

Michael Posner is the Jerome Kohlberg Professor of Finance and Ethics at NYU Stern School of Business and the Director of the NYU Stern Center for Business and Human Rights (the Center), the first ever human rights center at a business school. Michael is a leader and expert in all things business and human rights. In this interview, Senior Associate Cecely Richard-Carvajal talks to Michael about his new book, “Conscience Incorporated: Pursue Profits While Protecting Human Rights”.

1. What is the origin story of the book? Why did you want to write it?

The book encapsulates the work we have been doing at the Center over the past 12 years. Our work is divided into three focus areas (i) global labor, where we examine the human rights issues associated with the outsourcing of labor and global supply chains; (ii) technology, where we explore the intersection of technology, human rights and democracy, including issues like the spread of disinformation and its impact on elections, or the regulation of social media companies; and (iii) values-based investing, where we engage with the financial sector and raise questions related to ESG practices and diversity. The book brings all this together and highlights some of our reflections from this work.

2. As you mention, you have been working in this field for over a decade. What led you to write the book now?

It took me a couple of years to write the book, so it has been in gestation for a long time. We are at a moment where there is more attention than ever on how governments (especially in industrial countries) can regulate companies that do business in their jurisdictions. The interaction between what companies do on their own initiative and what governments are regulating them to do has come into sharp relief. We are entering a new era—with the introduction of significant new regulations in the EU and beyond— and it seemed to me that this is the time to reflect on where we have been and how we should move forward.

3. The book is directed at companies, but it also appeals to several other audiences, including governments, consumers, and educators. How has your background working in these different roles (government, civil society, and academia) informed your view of corporate human rights responsibility? Has your perspective evolved over time?

My perspective is always evolving, but I think the key is to bring all these different stakeholders together. We have spent too much time with each of these groups operating in siloes. Companies working as part of trade associations or industry groups talking only to each other for fear of sharing what they are doing or what they know with outsiders. Similarly, NGOs are very good at talking amongst themselves and then dictating to companies and governments what action they should take. Governments, once again, are operating in their own world. We need to have more open and honest conversations about how companies are making money, the core human rights challenges they are facing (which will be different in every industry), how these challenges can be addressed, and what accountability looks like. These conversations are currently going on at the same time within these different groups, but I would like to see more interaction. We need to foster a common conversation where all the big questions are on the table and everyone who has a stake in the outcome is part of the discussion.

4. We are entering a new regulatory era in the field of business and human rights. New laws, including the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive are mandating corporate human rights respect for EU and non-EU companies alike. At the same time, we have seen the introduction of the Omnibus proposal seeking to water down these legislative obligations. What is your main advice to companies in this period of uncertainty?

Governance is not always a linear path, particularly when it relates to the regulation of global companies. While this process may not happen overnight, governments will play a larger regulatory role in ten years’ time than they did ten years ago.

There is a sense right now that the Europeans have taken their foot off the gas and companies can put their energy elsewhere. I think this approach is short-sighted. The smartest companies have not lost sight of the big picture and are turning to consultancies like Article One to help prepare for this regulation, including meaningfully evaluating the human rights risks they face and the measures they have adopted to address these risks.

It is easy for American companies to think: “The regulation is in Europe. I am based in the USA. This has nothing to do with me.” But the reality is, if you are running a big company with a global footprint, you will be regulated by whomever has the most ambitious regulation. 50 years ago, the US passed the Foreign Corrupt Practices Act, which became the global standard for corruption. If Siemens, a German company, wanted to sell electronics in the USA and they were bribing officials in Greece, Vietnam or Russia, it did not matter that the bribery had nothing to do with the US. As far as the US government was concerned, by selling in the US market, Siemens was a US company for the purposes of the FCPA.

If you are a big global company, you need to be aware of what is happening everywhere. Where governments have the capacity, they will regulate.

5. There is tension right now between the US and the EU. The EU is pushing forward its own business and human rights agenda, and at the same time, we are seeing a backlash in the US with the anti-DEI movement. How do you recommend international companies operating in both US and EU markets navigate this tension?

It is really a difficult time. The Atlantic Ocean just got deeper and wider. The Trump administration is in a deregulatory mode and Europe is moving in the other direction. American companies doing business in Europe (and vice versa) are caught in the middle. I was in France a couple of weeks ago and met with a group of French business executives who that morning had received a letter from the US embassy in France asking them to take down DEI references on their websites. These are French companies operating in France and the US government is asking them to take down these references. It is a crazy world we are living in. Any company operating both in Europe and the US is experiencing a sense of whiplash. They are being told one thing in one place, and the complete opposite in the other.

Companies need to remember, however, that the same administration will not be in power forever. One day, in the foreseeable future, there will be pushback against what Trump and his team are doing. If you take a broad look at where the world is right now, we recognize that globalization has brought a lot of benefits (creating jobs, lifting people out of poverty) but we have not yet developed the rules of the road for companies operating globally. We are now starting to do that, partly because there is more pressure. Certain demographics, such as younger people and women, care more about these issues and are advocating more than ever through participation in their workforce, consumer activism, and in financial markets. We are therefore going to see more pressure on companies to be attentive to these issues. The smartest companies are prioritizing these issues now despite the current climate.

6. Another part of the de-escalation and deregulation in the US, is the scaling back of federal agencies overseeing questions of international diplomacy and responsible business conduct. This shift appears to be creating a vacuum—one that businesses may now need to step in and help fill. How can businesses step up to this challenge?

This is a very precarious time for businesses to work out when to speak up and when to keep your head down.

I would like to see business leaders be more attentive to the larger landscape and the challenges being raised against our democratic system and the hollowing out of government agencies.

These are issues that transcend partisan politics, relating to the foundational elements of the US economy. For almost 250 years our system has been rooted in a constitutional framework, with independent courts, free press, and healthy commercial competition largely free from cronyism and corruption. All of this is now being challenged. It is incumbent on business leaders to recognize that the broader foundation of democracy is being challenged. Collectively, companies need to think about what is both in the best interest of business and the country and work together to help achieve this.

7. What do you hope business leaders reading your book today take away from it?

Human rights are not impossible issues to tackle. They may be hard, risky, and incur some cost, but in the 21st century, these are essential business questions. A smart business leader ought not to view these issues as impossible constraints to success, but important challenges to be overcome.

At our Center, we say we are pro-business but press for high standards. Businesses should adopt this approach. Business can make a profit, be successful, and competitive, and in a way that is responsible and meets the needs of all the stakeholders involved. I hope my book inspires business leaders to take the most acute human rights issues in their industries seriously and take necessary actions to be part of the solution.