ABSTRACT
This chapter examines the limits of the law and formal regulation as a sole source of corporate conduct, governance and accountability standards in an open economy and global marketplace that has empowered businesses to operate beyond traditional geopolitically defined boundaries of control. It considers the implications of an increasingly global marketplace for the authority and effectiveness of state-based law and regulation that only prescribes and enforces minimum legal thresholds and that have little or no formal extraterritorial effectiveness. In addition, when the debate over governance regulatory approaches takes on an ‘either/or’ construction it can obscure the reality that in numerous practical instances regulators employ hybrid approaches to considerable effect. More fundamentally, allowing for choice and flexibility rather than staging a debate between regulatory methods avoids creating an artificial dichotomy that suggests that the rules are somehow divorced from the principles that inform them and, vice versa, the principles from the rules that apply them.
