Corporate Governance for Sustainability

6 Pages Posted: 7 Jan 2020

See all articles by Andrew Johnston

Andrew Johnston

University of Sheffield - Law School

Jeroen Veldman

Nyenrode Business university

Robert G. Eccles

University of Oxford - Said Business School

Simon Deakin

University of Cambridge - Centre for Business Research (CBR); European Corporate Governance Institute (ECGI); University of Cambridge - Faculty of Law

Jerry Davis

University of Michigan

Marie-Laure Djelic

Sciences Po

Katharina Pistor

Columbia University School of Law

Blanche Segrestin

École Nationale Supérieure des Mines de Paris - Centre de Gestion Scientifique (CGS)

Cynthia A. Williams

York University - Osgoode Hall Law School

David Millon

Washington and Lee University - School of Law

Paddy Ireland

University of Bristol

Beate Sjåfjell

University of Oslo - Faculty of Law

Christopher M. Bruner

University of Georgia School of Law

Lorraine E. Talbot

University of York - York Law School; University of Birmingham - Birmingham Law School

Hugh Christopher Willmott

City University London - Sir John Cass Business School; Cardiff Business School

Charlotte Villiers

University of Bristol

Carol Liao

Peter A. Allard School of Law

Bertrand Valiorgue

Ecole Universitaire de Management Clermont-Ferrand

Jason Glynos

University of Essex

Todd L. Sayre

University of San Francisco - School of Business and Management

Bronwen Morgan

University of New South Wales (UNSW) - Faculty of Law

Rick Wartzman

Drucker Institute

Prem Sikka

Essex Business School

Filip Gregor

Frank Bold

David Carroll Jacobs

Morgan State University

Roger Gill

Durham Business School

Roger Brown

Liverpool Hope University

Vincenzo Bavoso

University of Manchester - School of Law

Neil Lancastle

De Montfort University - Faculty of Business and Law

Julie Matthaei

Wellesley College - Department of Economics

Scott Taylor

University of Birmingham

Ulf Larsson-Olaison

Linnaeus University

Jay Cullen

University of York; University of Oslo

Alan J. Dignam

Queen Mary University of London - School of Law

Thomas Wuil Joo

University of California, Davis - School of Law

Ciarán O'Kelly

Queen's University Belfast - School of Law

Con Keating

affiliation not provided to SSRN

Roman Tomasic

University of South Australia - School of Law; Durham University - Law School

Simon Lilley

University of Leicester - Management Centre

Kevin Tennent

University of York

Keith Robson

HEC Paris

Willy Maley

University of Glasgow

Iris H-Y Chiu

University College London - Faculty of Laws

Ewan McGaughey

School of Law, King's College, London; Centre for Business Research, University of Cambridge; University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law

Chris Rees

Royal Holloway, University of London

Nina Boeger

University of Bristol - School of Law

Adam Leaver

University of Sheffield

Marc T. Moore

University College London, Faculty of Laws

Leen Paape

Nyenrode Business University

Alan D. Meyer

University of Oregon - Department of Management

Marcello Palazzi

Rotterdam School of Management, Erasmus University

Nitasha Kaul

University of Westminster

Juan Felipe Espinosa-Cristia

Universidad Andres Bello

Timothy Kuhn

University of Colorado at Boulder

David J. Cooper

University of Alberta - Department of Accounting, Operations & Information Systems

Susanne Soederberg

Queen’s University

Andreas Jansson

School of Business and Economics, Linnaeus University

Susan Watson

University of Auckland Faculty of Law

Ofer Sitbon

Zefat Academic College

Joan Loughrey

University of Leeds

David Collison

University of Dundee - Department of Accountancy & Business Finance

Maureen McCulloch

affiliation not provided to SSRN

Maureen McCulloch

Oxford Brookes Business School

Navajyoti Samanta

School of Law, University of Sheffield

Daniel J.H. Greenwood

Hofstra University College of Law

Grahame F. Thompson

The Open University - Department of Political Economics

Andrew R. Keay

University of Leeds - School of Law

Alessia Contu

University of Massachusetts

Andreas Rühmkorf

University of Sheffield, School of Law

Richard Hull

ICCE, Goldsmiths, University of London

Irene-Marie Esser

University of Glasgow

Nihel Chabrak

College of Business, United Arab Emirates University

Date Written: December 11, 2019

Abstract

The current model of corporate governance needs reform. There is mounting evidence that the practices of shareholder primacy drive company directors and executives to adopt the same short time horizon as financial markets. Pressure to meet the demands of the financial markets drives stock buybacks, excessive dividends and a failure to invest in productive capabilities. The result is a ‘tragedy of the horizon’, with corporations and their shareholders failing to consider environmental, social or even their own, long-term, economic sustainability.

With less than a decade left to address the threat of climate change, and with consensus emerging that businesses need to be held accountable for their contribution, it is time to act and reform corporate governance in the EU.

The statement puts forward specific recommendations to clarify the obligations of company boards and directors and make corporate governance practice significantly more sustainable and focused on the long term.

Keywords: corporate governance, company law, director duties, board obligations, sustainable finance action plan, sustainability strategy, ESG, shareholder primacy, sustainable development, climate change

JEL Classification: G30, G32, K22, M1, M14, M41

Suggested Citation

Johnston, Andrew and Veldman, Jeroen and Eccles, Robert G. and Deakin, Simon F. and Davis, Jerry and Djelic, Marie-Laure and Pistor, Katharina and Segrestin, Blanche and Williams, Cynthia A. and Millon, David K. and Ireland, Philip and Sjåfjell, Beate and Bruner, Christopher M. and Talbot, Lorraine E. and Willmott, Hugh Christopher and Villiers, Charlotte Louise and Liao, Carol and Valiorgue, Bertrand and Glynos, Jason and Sayre, Todd L. and Morgan, Bronwen and Wartzman, Rick and Sikka, Prem and Gregor, Filip and Jacobs, David Carroll and Gill, Roger and Brown, Roger and Bavoso, Vincenzo and Lancastle, Neil and Matthaei, Julie and Taylor, Scott and Larsson-Olaison, Ulf and Cullen, Jay and Dignam, Alan J. and Joo, Thomas Wuil and O'Kelly, Ciarán and Keating, Con and Tomasic, Roman A. and Lilley, Simon and Tennent, Kevin and Robson, Keith and Maley, Willy and Chiu, Iris H-Y and McGaughey, Ewan and Rees, Chris and Boeger, Nina and Leaver, Adam and Moore, Marc T. and Paape, Leen and Meyer, Alan and Palazzi, Marcello and Kaul, Nitasha and Espinosa-Cristia, Juan Felipe and Kuhn, Timothy and Cooper, David J. and Soederberg, Susanne and Jansson, Andreas and Watson, Susan Mary and Sitbon, Ofer and Loughrey, Joan and Collison, David J. and McCulloch, Maureen and McCulloch, Maureen and Samanta, Navajyoti and Greenwood, Daniel J.H. and Thompson, Grahame F. and Keay, Andrew R. and Contu, Alessia and Rühmkorf, Andreas and Hull, Richard and Esser, Irene-Marie and Chabrak, Nihel, Corporate Governance for Sustainability (December 11, 2019). Available at SSRN: https://ssrn.com/abstract=3502101 or http://dx.doi.org/10.2139/ssrn.3502101

Andrew Johnston (Contact Author)

University of Sheffield - Law School ( email )

Sheffield
United Kingdom

Jeroen Veldman

Nyenrode Business university ( email )

Straatweg 25
P.O. Box 130
Breukelen, 3620 AC
Netherlands

Robert G. Eccles

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Simon F. Deakin

University of Cambridge - Centre for Business Research (CBR) ( email )

Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+ 44 1223 335243 (Phone)

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

Jerry Davis

University of Michigan

Marie-Laure Djelic

Sciences Po ( email )

27 rue Saint-Guillaume
Paris Cedex 07, 75337
France

Katharina Pistor

Columbia University School of Law ( email )

435 West 116th Street
New York, NY 10025
United States
212-854-0068 (Phone)
212-854-7946 (Fax)

Blanche Segrestin

École Nationale Supérieure des Mines de Paris - Centre de Gestion Scientifique (CGS) ( email )

60, boulevard Saint-Michel
Paris Cedex 06, 75272
France

Cynthia A. Williams

York University - Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-5545 (Phone)

David K. Millon

Washington and Lee University - School of Law ( email )

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

Philip Ireland

University of Bristol ( email )

Beate Sjåfjell

University of Oslo - Faculty of Law ( email )

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Oslo, 0130
Norway

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

Christopher M. Bruner

University of Georgia School of Law ( email )

225 Herty Drive
Athens, GA 30602
United States

Lorraine E. Talbot

University of York - York Law School ( email )

University of York
Heslington, York YO10
United Kingdom

University of Birmingham - Birmingham Law School ( email )

Edgbaston
Birmingham, AL B15 2TT
United Kingdom

Hugh Christopher Willmott

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Cardiff Business School ( email )

Cardiff CF10 3EU
United Kingdom

HOME PAGE: http://https://sites.google.com/site/hughwillmottshomepage

Charlotte Louise Villiers

University of Bristol ( email )

University of Bristol,
Senate House, Tyndall Avenue
Bristol, BS8 ITH
United Kingdom

Carol Liao

Peter A. Allard School of Law ( email )

University of British Columbia
1822 East Mall
Vancouver, British Columbia V6T 1Z1
Canada

HOME PAGE: http://www.allard.ubc.ca/faculty-staff/carol-liao

Bertrand Valiorgue

Ecole Universitaire de Management Clermont-Ferrand ( email )

Clermont Ferrand, 63000
France

Jason Glynos

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Todd L. Sayre

University of San Francisco - School of Business and Management ( email )

San Francisco, CA 94117
United States

Bronwen Morgan

University of New South Wales (UNSW) - Faculty of Law ( email )

Kensington, New South Wales 2052
Australia

Rick Wartzman

Drucker Institute

Prem Sikka

Essex Business School ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Filip Gregor

Frank Bold ( email )

Rue d'Edimbourg 26
Bruxelles, 1050
Belgium

David Carroll Jacobs

Morgan State University ( email )

1700 E. Cold Spring Ln
Baltimore, MD 21251
United States

Roger Gill

Durham Business School ( email )

Millhill Lane
Durham, Durham DH1 3LB
United Kingdom

Roger Brown

Liverpool Hope University

Taggart Avenue
Liverpool, L16
United Kingdom

Vincenzo Bavoso

University of Manchester - School of Law ( email )

Oxford Road
Manchester M13 9PL, M139PL
United Kingdom

Neil Lancastle

De Montfort University - Faculty of Business and Law ( email )

United Kingdom

HOME PAGE: http://neil.lancastle.com/

Julie Matthaei

Wellesley College - Department of Economics ( email )

106 Central Street
Wellesley, MA 02181
United States
617-283-2181 (Phone)
617-283-2177 (Fax)

Scott Taylor

University of Birmingham

Birmingham B15 2TT, Birmingham B15 2TT
United Kingdom

Ulf Larsson-Olaison

Linnaeus University

Växjö, S-35195
Sweden

Jay Cullen

University of York ( email )

Heslington
University of York
York, YO10 5DD
United Kingdom

University of Oslo ( email )

PO Box 6706 St Olavs plass
Oslo, N-0317
Norway

Alan J. Dignam

Queen Mary University of London - School of Law ( email )

67-69 Lincoln's Inn Fields
London, WC2A 3JB
United Kingdom
0207 8828123 (Phone)

HOME PAGE: http://www.law.qmul.ac.uk/staff/dignam.html

Thomas Wuil Joo

University of California, Davis - School of Law ( email )

Martin Luther King, Jr. Hall
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Davis, CA 95616-5201
United States
(530) 754-6089 (Phone)
(530) 752-4704 (Fax)

Ciarán O'Kelly

Queen's University Belfast - School of Law ( email )

School of Law
Belfast BT7 1NN, BT7 1NN
Ireland

Con Keating

affiliation not provided to SSRN

Roman A. Tomasic

University of South Australia - School of Law ( email )

GPO Box 2471
Adelaide SA 5001
Australia

Durham University - Law School ( email )

Palatine Centre
Stockton Road
Durham, Durham
United Kingdom

HOME PAGE: http://www.durham.ac.uk

Simon Lilley

University of Leicester - Management Centre ( email )

United Kingdom

Kevin Tennent

University of York ( email )

Heslington
University of York
York, YO10 5DD
United Kingdom

Keith Robson

HEC Paris ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Willy Maley

University of Glasgow ( email )

Adam Smith Business School
Glasgow, Scotland G12 8LE
United Kingdom

Iris H-Y Chiu

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Ewan McGaughey

School of Law, King's College, London; Centre for Business Research, University of Cambridge ( email )

Somerset House East Wing
Strand
London, WC2R 2LS
United Kingdom

HOME PAGE: http://kclpure.kcl.ac.uk/portal/ewan.mcgaughey.html

University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law

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Berkeley, CA 94720-7200
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Chris Rees

Royal Holloway, University of London ( email )

HOME PAGE: http://www.easyurl.net/chris.rees

Nina Boeger

University of Bristol - School of Law ( email )

Wills Memorial Building
Queen's Road Clifton
Bristol BS8 1RJ, BS8 1RJ
United Kingdom

Adam Leaver

University of Sheffield ( email )

17 Mappin Street
Sheffield, Sheffield S1 4DT
United Kingdom

Marc T. Moore

University College London, Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Leen Paape

Nyenrode Business University ( email )

Straatweg 25
P.O. Box 130
Breukelen, 3620 AC
Netherlands

Alan Meyer

University of Oregon - Department of Management ( email )

Eugene, OR 97403-1208
United States

Marcello Palazzi

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Nitasha Kaul

University of Westminster ( email )

309 Regent Street
London, W1R 8AL
United Kingdom

Juan Felipe Espinosa-Cristia

Universidad Andres Bello ( email )

Chile

Timothy Kuhn

University of Colorado at Boulder ( email )

1070 Edinboro Drive
Boulder, CO 80309
United States

David J. Cooper

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada

Susanne Soederberg

Queen’s University ( email )

Kingston, Ontario K7L 3N6
Canada

Andreas Jansson

School of Business and Economics, Linnaeus University ( email )

Växjö, S-35195
Sweden
+46470708230 (Phone)

Susan Mary Watson

University of Auckland Faculty of Law ( email )

Private Bag 92019
Auckland Mail Centre
Auckland, 1142
New Zealand

Ofer Sitbon

Zefat Academic College ( email )

11 Jerusalem St.
Zefat, 1320611
Israel

Joan Loughrey

University of Leeds ( email )

Leeds, LS2 9JT
United Kingdom

David J. Collison

University of Dundee - Department of Accountancy & Business Finance ( email )

Dundee, Scotland DD1 4HN
United Kingdom
+44(0)1382 344857 (Phone)

Maureen McCulloch

affiliation not provided to SSRN

Maureen McCulloch

Oxford Brookes Business School

Gipsy Lane
Headington
Oxon. OX33 1HX, OX3 0BP
United Kingdom

Navajyoti Samanta

School of Law, University of Sheffield ( email )

Bartolome House, Winter Street
Sheffield
Sheffield, South Yorkshire S3 7ND
United Kingdom
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HOME PAGE: http://https://www.shef.ac.uk/law

Daniel J.H. Greenwood

Hofstra University College of Law ( email )

121 Hofstra University
Hempstead, NY 11549
United States
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HOME PAGE: http://law.hofstra.edu/greenwood

Grahame F. Thompson

The Open University - Department of Political Economics ( email )

Walton Hall
Milton Keynes, MK6 7AA
United Kingdom

Andrew R. Keay

University of Leeds - School of Law ( email )

Corporate and Commercial Law
Leeds LS2 9JT
United Kingdom
0113-343-6389 (Phone)

Alessia Contu

University of Massachusetts

333 Faunce Corner Road
North Dartmouth, MA 02747
United States

Andreas Rühmkorf

University of Sheffield, School of Law ( email )

Bartolome House
Winter Street
Sheffield, Sheffield S3 7ND
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HOME PAGE: http://https://www.shef.ac.uk/law/staff/academic/aruhmkorf

Richard Hull

ICCE, Goldsmiths, University of London ( email )

Lewisham Way
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United Kingdom

HOME PAGE: http://https://www.gold.ac.uk/icce/staff/r-hull/

Irene-Marie Esser

University of Glasgow ( email )

School of Law
Glasgow, Scotland G12 8LE
United Kingdom

HOME PAGE: http://www.gla.ac.uk/schools/law/staff/irene-marieesser/

Nihel Chabrak

College of Business, United Arab Emirates University ( email )

P.O. Box 15551
Al-Ain
United Arab Emirates

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