Publication
Georgia Journal of International and Comparative Law
Volume
52
Page
559
Year
2024
Abstract
The laws and norms of corporate law are changing across the globe. Gone are the days when scholars could confidently predict that shareholder wealth maximization would be the universal metric of corporate success. Instead, corporate leaders, governments, workers, activists, and even shareholders are looking beyond simplistic models of shareholder primacy to a broader understanding of corporate responsibility. This new approach has taken its firmest hold in the European Union, where three directives over the last decade have reshaped reporting requirements and directors’ duties in significant ways, pushing for greater accountability and attention to the needs of stakeholders.
Changes to company disclosure regimes and directors’ duties signal an important shift in the norms of global capital, and they move the dialogue beyond narrow attention to financial performance. This essay, however, provides a note of caution about the ceiling inherent in these directives and similar proposals. Without systems of codetermination or shared stakeholder governance, expectations of a more sustainable approach to governance will be built on somewhat sandy soil. Changing how the corporation governs itself requires changes to governance. Until more structural adjustments, such as an expansion of voting rights or changes to board representation, are undertaken, we cannot expect too much while purely financial interests are still in control.
Part II of this essay examines the efforts to incorporate sustainability imperatives into European corporate law in the last decade. Part III argues that despite these positive developments, structural changes in governance are necessary to reorient corporate governance towards sustainability on a longerterm basis. Part IV concludes.
Recommended Citation
Matthew T. Bodie, Shareholders All the Way Down: EU Corporate Sustainability Reforms and the Structure of Corporate Governance, 52 Ga. J. Int’l & Compar. L. 559 (2024)
