Market-Led Sustainability through Information Disclosure: The UK Approach
In Beate Sjåfjell and Christopher M. Bruner (eds), Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability (Cambridge University Press, 2019), Chapter 15.
University of Oslo Faculty of Law Research Paper No. 2019-20
Posted: 8 May 2019 Last revised: 15 Jun 2020
Date Written: May 6, 2019
Abstract
This chapter shows that the UK relies on information disclosure and market forces to steer companies towards greater sustainability, leaving company law and corporate governance largely free to focus on shareholder value. It traces the twentieth century regulatory and policy changes which reoriented the UK’s system from managerialist to shareholder-centric, before analysing the 2006 reforms, which are supposed to promote ‘enlightened shareholder value’ through directors’ duties and disclosure. Finally, the chapter considers recent developments that attempt to use information disclosure to promote a long-term approach, including giving shareholders stewardship responsibilities and a ‘say on pay’, making changes to takeover regulation, and requiring companies to make disclosures in relation to modern slavery. None of these recent measures have been successful, and the chapter concludes that far-reaching reforms to corporate governance are urgently needed.
Keywords: information disclosure, corporate accountability, company law reform, corporate governance reform, shareholder value
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