Realising the Potential of the Board for Corporate Sustainability

In Beate Sjåfjell and Christopher M. Bruner (eds), Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability (Cambridge University Press, 2019), Chapter 49.

University of Oslo Faculty of Law Research Paper No. 2019-51

Posted: 8 May 2019 Last revised: 15 Jun 2020

See all articles by Beate Sjåfjell

Beate Sjåfjell

University of Oslo - Faculty of Law

Date Written: May 6, 2019

Abstract

The board has a crucial role in determining the strategy and the direction of the corporation. However, currently the function of the corporate board is constrained through the social norm of shareholder primacy, reinforced through the intermediary structures of capital markets. This chapter argues that a reform of EU corporate law is key to integrating sustainability into mainstream corporate governance, into the core duties of the corporate board, to change corporations from within. While previous attempts at harmonising core corporate law at the EU level have failed, there are now three drivers for reform that may facilitate a change: the EU’s Sustainable Finance Initiative, which concentrates mainly on the environmental aspects of sustainability; the push to introduce legal requirements for due diligence on human rights; and experimentation by some national legislators within the EU with reforms of their own.

Keywords: duties of the board, planetary boundaries, social foundation, human rights, global value chains

Suggested Citation

Sjåfjell, Beate, Realising the Potential of the Board for Corporate Sustainability (May 6, 2019). In Beate Sjåfjell and Christopher M. Bruner (eds), Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability (Cambridge University Press, 2019), Chapter 49., University of Oslo Faculty of Law Research Paper No. 2019-51, Available at SSRN: https://ssrn.com/abstract=3383574

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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