Sustainable Corporate Governance: A Way Forward?

Knapp Vanessa ()
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Knapp Vanessa: Vanessa Knapp OBE is a visiting professor at Queen Mary University of LondonLawLondon.United Kingdom of Great Britain and Northern Ireland

European Company and Financial Law Review, 2021, vol. 18, issue 2, 218-243

Abstract: This article looks at proposals to improve sustainable corporate governance of companies. These include: how to deal with shareholder primacy; a proposed requirement for companies to have an overarching purpose “to create sustainable value within planetary boundaries;” a directors’ duty to promote the undertaking’s interests to fulfil its overarching purpose; a directors’ duty to balance stakeholders’ interests; a duty to undertake a due diligence sustainability assessment; company and director liability for breaches; stakeholder enforcement of directors’ duties and public enforcement of directors’ duties. It considers problems with the proposals. It suggests alternative ways to make companies’ corporate governance more sustainable, including: improved corporate reporting relating to engagement with key stakeholders and how this contributes to the company’s long-term sustainability; better viability reporting by companies; reporting on capital allocation; better stewardship similar to the UK Stewardship Code 2020; more collaborative engagement by shareholders with companies in a manner similar to that promoted by the UK Investor Forum; making requisitioning of resolutions work better in practice; and, possibly, a vote on whether the company is creating sustainable value in the long term (a say on sustainability).

Date: 2021
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DOI: 10.1515/ecfr-2021-0010

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