Directors’ Duties and Sustainable Corporate Governance

The videos are available here

The summary report is available here

The programme can be downloaded here.

About this workshop

The European Commission recently published a study by Ernst & Young (EY) on directors’ duties and sustainable corporate governance commissioned in 2019. Studies of this type are usually a stepping stone for policy proposals that will be put forward for consideration by EU Member States and the European Parliament. In the words of the Commission:

“the Study found a clear trend of short-termism in the focus of EU companies. It identified key drivers of this issue, ranging from the narrow interpretation of directors duties and the company’s interest with the tendency to favour the short-term maximisation of financial value, through growing pressure from investors and the lack of a strategic perspective on sustainability all the way to the limited enforcement of the directors’ duty to act in the long-term interest of company. In order to lengthen the time horizon in corporate decision-making and to promote a corporate governance that is more conducive to sustainability, the Study also identified specific objectives that EU intervention could aim to reach".

The study identifies a number of policy options for the European Commission to consider (summarised at pp. 51-60), which may deeply impact corporate law and governance across the European Union. Topics include directors’ duties, the company’s purpose, corporate disclosures, executive compensation, and engagement with stakeholders. The European Commission has conducted a public consultation on these policy options, that closed on 8 October 2020, and is expected to issue proposals at the beginning of 2021, if not earlier.

ECGI held an online roundtable to discuss the report, the academic literature, and recommendations on the topics referenced in the report.

Useful links:

Watch recordings of the workshop | Summary Report

EY Report: https://bit.ly/3jcBBUt
All Public Responses to the Consultation: https://bit.ly/3khuNGq
Submitted Response from Wolf-Georg Ringe: https://bit.ly/3jhTxgx
Submitted Response from Paul Davies and Rolf Skog (ECLE group): https://bit.ly/3dPqY95
Submitted Response from Mark Roe and Holger Spamann: https://bit.ly/2TdHRkp
Submitted Response from Alex Edmans: https://bit.ly/2TdxBIJ
Submitted Response from Steen Thomsen: https://bit.ly/3kfjuyJ and https://bit.ly/2Hb9Xui