2024 Global Corporate Governance Colloquium

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The tenth annual GCGC Conference was hosted by Columbia Law School on 14 -15 June 2024 in New York.

GCGC 2024, hosted by Columbia Law School, NYC, showcased innovative research tackling critical governance challenges, with themes that spanned corporate purpose, environmental responsibility, and the evolving role of stakeholders in corporate law, particularly in the Global South. A central theme emerging from the discussions was the movement toward a broader, stakeholder-inclusive view of corporate governance—a trend mirrored across diverse legal and financial landscapes.

One of the most novel contributions came from Mariana Pargendler’s paper on “Corporate Law in the Global South: Heterodox Stakeholderism,” which argued that countries in the Global South are pioneering alternative approaches to stakeholder governance. Unlike the shareholder-centric models prevalent in the Global North, these jurisdictions, including Brazil and South Africa, are implementing legal reforms that emphasize social welfare and accountability to a wider range of stakeholders. The paper highlighted how these legal systems are creating a “reverse convergence,” as Northern jurisdictions increasingly recognize the need for similar stakeholder considerations.

On the environmental front, Pedro Matos presented findings from his co-authored study, “Decarbonizing Institutional Investor Portfolios,” that raise questions about the efficacy of investor-led climate initiatives. The research showed that while climate-conscious investors often decarbonize their portfolios by divesting from high-emission firms, this strategy, termed “portfolio greening,” does not directly reduce emissions. Instead, these divested shares are frequently picked up by investors with less environmental focus, limiting the impact of such efforts on overall emissions. This finding supports the need for regulatory interventions to complement voluntary investor-led initiatives in combating climate change.

Other papers addressed the implications of governance structures and responsibilities. Yaron Nili and Roy Shapira’s study on “Specialist Directors” examined the increasing appointment of board members with specific expertise, such as cybersecurity or climate risk, and the potential impact on board dynamics. While these appointments may bring valuable knowledge to corporate governance, they also risk authority bias and “board washing,” where the mere presence of experts may not necessarily translate to effective change.

The conference offered new insights into corporate activism and the political entanglement of firms, particularly in Jill Fisch and Jeff Schwartz’s paper, “How Did Corporations Get Stuck in Politics and Can They Escape?” The study argued that corporations face growing pressure to take public stances on social issues, often resulting in unpredictable backlash and reputational risks, sometimes finding themselves “caught” in a feedback loop where stakeholders’ demands for political engagement conflict with core business interests. The misalignment between corporate interests and social objectives is challenging for businesses to navigate.

Elisabeth Kempf and Oliver Spalt’s paper analyzed how various corporate actions are perceived as moral issues by the public. Their findings showed that traditional corporate decisions, such as layoffs and CEO pay, are often viewed as moral concerns, sometimes even more critically than certain ESG policies.

Other themes included the rise of private equity and continuation funds; specialized board composition; the mandatory bid rule; the evolution of public markets; and family firm succession. The array of topics highlighted the conference’s focus on governance as a dynamic field, continuously influenced by global shifts, public expectations, and evolving regulatory environments.