Corporate and securities law recognises human rights, but only to a limited extent, a UN report compiled with input from two magic circle firms has found.

There is ‘limited to non-existent’ coordination between corporate regulators and government agencies tasked with protecting human rights, and a lack of clarity in corporate and securities law regarding what companies are required and permitted to do, Professor John Ruggie, the special representative of the UN secretary-general on business and human rights concluded in his corporate law project.

Twenty leading corporate law firms spread across 40 jurisdictions worked on a pro bono basis to identify whether corporate and securities law encourages companies to respect human rights. Magic circle firms Clifford Chance and Linklaters, and US firm Weil Gotshal & Manges were among those involved.

The firms found that company directors are rarely required to consider the human rights of non-shareholders; that express references to human rights in companies’ corporate social responsibility reports or codes and guidelines are rare; that requirements for gender or racial representation on company boards are rare; and that incorporation laws do not expressly require companies to recognise a duty to society at the point of incorporation.

The project is believed to be the first comprehensive exploration of the links between corporate and securities law and human rights. It forms part of the UN Protect, Respect and Remedy Framework for business and human rights, which examines the responsibility of corporates to respect human rights.