Sustainable Corporate Governance:A Way Forward

Abstract

Rarely has the report of a private consultancy caused so many reactions, in particular, criticism, in such a short period of time, as the “Study on directors’ duties and sustainable corporate governance” that Ernst and Young recently prepared for the European Commission DG Justice and Consumers (EY report).1 In addition to the responses of various groups of scholars from both Europe and the US,2 the Oxford Business Law Blog has launched a specific new series3 and the European Corporate Governance Institute has organized a three-day policy workshop, in order to bring together the presentations of over 20 distinguished scholars.4 This intensive debate demonstrates the importance of the topic for future EU policymaking in the area of corporate governance. In this piece, we argue that the main reason the EY report has attracted so much criticism is because it simply started out on the wrong foot. However, this shortcoming should not induce the Commission to misjudge company law’s potential for sustainability. We discuss various measures that target both directors and shareholders, but also other stakeholders. Adopting these measures promises to be the way forward for a more sustainable, corporate governance framework. directors’ duties, corporate governance, sustainability