United Nations has called for a fairer international tax system and stronger corporate governance, warning that financial inequalities and inadequate business accountability undermine democracy, sustainable development and the protection of human rights.
UN Independent Expert on the promotion of a democratic and equitable international order, George Katrougalos stressed that governments must address weaknesses in global tax arrangements and corporate decision-making to ensure public resources are fairly mobilised and economic inequalities are reduced.
“Fiscal justice is not merely a matter of economic policy. It is a democratic imperative grounded in the right to development, international cooperation and the sovereign equality of States.”
George Katrougalos
An Independent UN report identified growing wealth concentration, large-scale profit shifting by multinational corporations and persistent financial transfers from developing to developed countries as major challenges undermining democratic governance and the realisation of economic, social and cultural rights.
“An international economic order that permits the continuous erosion of public revenues, particularly in developing countries, weakens democratic institutions, entrenches inequality and limits States’ capacity to meet their human rights obligations.”
George Katrougalos
The report raises concerns that existing international tax arrangements have failed to deliver equitable outcomes for developing countries, particularly in ensuring that they retain sufficient resources to finance public services and meet their development obligations.
George Katrougalos called for more transparent, inclusive and representative international tax decision-making, arguing that all countries must participate on equal footing in shaping global tax rules.
He also welcomed ongoing negotiations towards a United Nations Framework Convention on International Tax Cooperation, stating that “the Convention must establish meaningful and enforceable commitments. A framework that promises fairness but lacks concrete obligations will not address the profound inequalities embedded in the current system.”
The report further calls for greater financial transparency, stronger taxing rights for developing countries, protection of their policy space to tax digital services and coordinated measures to ensure that extreme wealth contributes fairly to the public good.
UN Experts Urge Businesses to Put Human Rights at Heart of Governance
On the other hand, UN experts have called on governments and businesses to make respect for human rights a central element of corporate governance, warning that weak oversight and inadequate executive accountability expose workers, communities and other rights holders to abuse.
According to Robert McCorquodale, Chairperson of the Working Group on Business and Human Rights, “The effectiveness of the application of the Guiding Principles on Business and Human Rights by companies relies on good corporate governance and executive leadership to ensure that decision-making and corporate culture are aligned with respect for people and the planet, and that these are embedded throughout operations.”
The report identifies human rights risks, including those arising from environmental damage and climate change, as material concerns that businesses must incorporate into risk management and board-level reporting.
It also calls for relevant human rights expertise within corporate boards.
“Poor corporate governance concerning human rights matters can lead to many human rights abuses, affecting workers, communities and other rights holders. It can also have significant adverse consequences for companies, directors and executives.”
Robert McCorquodale
The experts urged governments to introduce legislation requiring directors and senior executives to consider human rights impacts in corporate decision-making.
They also called for corporate purpose to move beyond shareholder primacy where it prevents adequate consideration of human rights responsibilities.
The report further recommends that governments provide clear guidance on incorporating human rights considerations into executive and senior management remuneration.
It calls for legislation establishing remedies for affected rights holders and sanctions against companies, directors and executives where ineffective oversight and management allow adverse human rights impacts to persist.
Stronger Accountability Needed Across Governments and Businesses
UN experts place renewed emphasis on the relationship between economic governance, institutional accountability and the protection of human rights.
They call for stronger accountability mechanisms across both public institutions and the private sector, ensuring that economic decision-making contributes to human development rather than deepening existing inequalities.
“We call on businesses to integrate respect for human rights with integrated risk management and human rights due diligence systems, into core corporate governance.”
Robert McCorquodale
The recommendations reinforce the need for governments to establish fairer international economic arrangements while ensuring businesses remain accountable for the social and environmental consequences of their operations.
In the end, the experts contend that legal commitments alone are insufficient to safeguard human rights. It calls for accountable business leadership, fair access to public resources, and open tax systems.
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