Regulating for Corporate Sustainability: Why the Public-Private Divide Misses the Point

In 'Understanding the Modern Company' (Barnali Choudhury and Martin Petrin, eds.), Forthcoming

University of Oslo Faculty of Law Research Paper No. 2016-03

20 Pages Posted: 30 Mar 2016

See all articles by Beate Sjåfjell

Beate Sjåfjell

University of Oslo - Faculty of Law

Date Written: March 30, 2016

Abstract

The intellectually interesting debate on whether the company is a public or private entity may serve as a deflection device, keeping bright academic minds occupied with discussing the nature of the company. Going into the debate risks exacerbating unnecessarily entrenched positions on the nature, purpose and responsibility of the company. It also risks enforcing an impression of a more hard-lined dichotomy between public and private, shareholders and other stakeholders, social responsibility and corporate governance, than there actually is a basis for. Accordingly, it may not help, but rather make more difficult, the discussion of the more important question: How do we regulate for corporate sustainability?

A fundamental barrier for businesses shifting voluntarily away from business as usual and onto a path of corporate sustainability is the social norm of shareholder primacy, as has been argued by several commentators and substantiated further through the comparative company law research of the Sustainable Companies Project. This provides the basis for the conclusion that legal reform is necessary. The company law debate we need to have is what such a legal reform should look like and how we can show businesses, policy-makers and legislators that such reform needs to be adopted.

This chapter briefly summarizes the comparative company law research on barriers to sustainability and the basis for the argument that company law reform is necessary. Thereafter, a tentative reform proposal for a first step towards corporate sustainability on EU level is presented. The chapter closes with some reflections on what future research should look into and on the hope for achieving sustainable policies.

Suggested Citation

Sjåfjell, Beate, Regulating for Corporate Sustainability: Why the Public-Private Divide Misses the Point (March 30, 2016). In 'Understanding the Modern Company' (Barnali Choudhury and Martin Petrin, eds.), Forthcoming ; University of Oslo Faculty of Law Research Paper No. 2016-03. Available at SSRN: https://ssrn.com/abstract=2756410

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/

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