The question is almost as old as globalization itself: When corporations expand their operations around the world, do they have the same social obligations as they do at home, such as avoiding complicity in human-rights violations? Not long ago, CEOs had a ready answer—such issues are not their problem, because supposedly a corporation’s sole duty is to maximize shareholder value. Today, few CEOs think life is so simple. A corporation that ignores the rights of its workers or its impact on communities and the environment risks being branded a bad corporate citizen, a label that can cause enormous harm to its image, brand identity, worker morale, and even credit profile.

But there have been limits to business leaders’ willingness to embrace corporate social responsibility. Their watchword has been voluntarism; regulation has been instinctively anathema. Slowly, however, that is beginning to change.

Part of the reason for the change is growing public realization that the current patchwork of voluntary codes of conduct, often written in high-minded language but with few concrete commitments, is rarely enough to force compliance. Pressure is building on corporate leaders to accept the need for tougher, and enforceable, government regulation. Moreover, corporate instincts aside, changes in the business environment could make predictable and fair codes with teeth a matter of corporate self-interest.

Various global standards are now under development. Internet companies, for example, recently adopted a code in the wake of scandals over their operations in China. Broad slogans, such as Google’s “Don’t be evil,” haven’t kept them from violating their own free-speech principles and succumbing to Chinese pressure to censor blogs and Web searches. Nongovernmental organizations (NGOs) participating in the negotiations for this new code demanded that these companies make themselves accountable to the public by providing a way to monitor compliance.

A similar evolution is occurring in extractive industries, such as mining and oil drilling, that operate in war-torn countries. The first standards were developed in 2000 after negotiations among companies, NGOs, and governments. The aim was to ensure that companies don’t use their legitimate need for security to abet unlawful violence and intimidation by armed forces. Now it is clear that stronger procedures are needed to guarantee that companies actually follow those standards. New negotiations are under way.

Litigation, too, has shifted the corporate mind-set. Several US companies have been sued under the Alien Tort Claims Act, which holds them liable for damages they inflict anywhere in the world. The theory behind the suits is that if a corporation abets unlawful violence abroad—for instance, by using armed forces with a known record of atrocities—the victims deserve compensation. Several of these civil suits are working their way through the courts, two have been settled, and one jury found in favor of the company that was sued.

The traditionally cautious United Nations has begun a three-year study to determine whether compulsory regulation of corporate conduct is needed. In 2008, the US Senate, with an eye toward regulation, held unprecedented hearings on human rights and corporate responsibility in the extractive and Internet industries.

The shortcomings of voluntary standards also have become more glaring in the broader business environment. A series of upheavals, beginning with the Enron and WorldCom scandals and culminating in the current financial crisis, has profoundly shaken the belief that companies are best policed by themselves. Some multinationals are starting to recognize the merits of regulation.

Voluntary standards usually rely on public pressure to force compliance. Large, highly visible companies are particularly susceptible to this scrutiny when their problems are exposed. Because such companies face a greater risk to their reputations, they may disproportionately assume the costs of meeting corporate-conduct codes. That can give lesser-known competitors that operate under the public radar an advantage: for example, they can pay lower wages by employing children or barring labor unions from their factories. Only enforceable rules, applicable to all, can eliminate that double standard.

This would not be the first time corporations have recognized the advantages of broad, enforceable standards. In 1977, the US Congress passed the Foreign Corrupt Practices Act, which made it illegal for companies operating in the United States to bribe foreign officials. Thereafter, US companies complained that they were at a disadvantage to foreign competitors, which remained free to secure business through bribery. Twenty years later, those complaints prodded the Organisation for Economic Cooperation and Development (OECD), whose 30 member nations account for some 70 percent of world trade and $1.82 trillion in foreign direct-investment output, to adopt a treaty requiring its members to criminalize bribery.

The OECD should adopt a similar treaty that would require its members to enact laws compelling companies to follow social-responsibility standards. Violators would face civil and, conceivably, criminal penalties; existing OECD guidelines could serve as a good starting point. Meanwhile, the United Nations might provide a forum to negotiate a universal treaty.

Enforceable standards would prescribe a minimum for corporate conduct in all countries. Codes might, for example, recognize core worker rights: freedom from forced labor, child labor, and workplace discrimination, as well as the right to organize and bargain collectively. Companies would have to ensure that these rights were respected in their own operations and in those of their suppliers and subcontractors.

Special circumstances might apply in some cases, of course. China, a crucial manufacturing base, refuses to permit independent labor unions, so companies there may have to follow interim best-practice guidelines until the country meets international norms. Companies in extractive industries should be held to an unusually high standard of financial transparency because they often contribute more money to governments than taxes do. Companies operating in conflict zones should be required to take reasonable steps to avoid complicity in unlawful violence.

Few if any of the guidelines likely to appear in a social-responsibility treaty would be difficult for most multinationals to embrace. Enforceable codes would, however, hobble unfair competition from their less savory competitors. As skepticism about self-regulation grows, it is time to acknowledge the advantages of enforceable social-responsibility standards. By ensuring that globalization proceeds on the basis of respect for the rights of those affected, regulation would also be one of the most effective ways to guarantee that globalization continues.

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