Shareholder Primacy: The Main Barrier to Sustainable Companies

Company Law and Sustainability: Legal Barriers and Opportunities, Beate Sjåfjell and Benjamin J. Richardson (eds), Cambridge University Press, 2015

University of Oslo Faculty of Law Research Paper No. 2015-37

69 Pages Posted: 25 Sep 2015

See all articles by Beate Sjåfjell

Beate Sjåfjell

University of Oslo - Faculty of Law

Andrew Johnston

Warwick Law School

Linn Anker-Sørensen

Ernst & Young Norway

David Millon

Washington and Lee University - School of Law

Date Written: September 23, 2015

Abstract

This investigation of the barriers to, and opportunities for, promoting environmental sustainability in company law provides an in-depth comparative analysis of company law regimes across the world. The social norm of shareholder primacy is the greatest barrier preventing progress, and it also helps explain why voluntary action by companies and investors is insufficient. By deconstructing the myth that shareholder primacy has a legal basis, and challenging the economic postulates on which mainstream corporate governance debate is based, this chapter reveals a surprisingly large, unexplored potential within current company regimes for companies to reorientate themselves towards sustainability. Together with other chapters in the same book, this chapter also suggests possible methods of reforming the existing legal infrastructure for companies and provides an important contribution to the broader debate on how to achieve sustainability.

Suggested Citation

Sjåfjell, Beate and Johnston, Andrew and Anker-Sørensen, Linn and Millon, David K., Shareholder Primacy: The Main Barrier to Sustainable Companies (September 23, 2015). Company Law and Sustainability: Legal Barriers and Opportunities, Beate Sjåfjell and Benjamin J. Richardson (eds), Cambridge University Press, 2015, University of Oslo Faculty of Law Research Paper No. 2015-37, Available at SSRN: https://ssrn.com/abstract=2664544

Beate Sjåfjell (Contact Author)

University of Oslo - Faculty of Law ( email )

PO Box 6706 St Olavsplass
Oslo, 0130
Norway

HOME PAGE: http://www.jus.uio.no/ifp/english/people/aca/beatesj/

Andrew Johnston

Warwick Law School ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

HOME PAGE: http://https://warwick.ac.uk/fac/soc/law/people/andrew_r_johnston/

Linn Anker-Sørensen

Ernst & Young Norway ( email )

Oslo
Norway

David K. Millon

Washington and Lee University - School of Law ( email )

Lexington, VA 24450
United States
540-458-8993 (Phone)
540-458-8586 (Fax)

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