A Proposal for Reform of EU Member States’ Corporate Governance Codes in Support of Sustainability

Sustainability 2020, 12, 4328 part of the Special Issue 'Corporate Sustainability Reforms: Securing Market Actors’ Contribution to Global Sustainability'

25 Pages Posted: 8 Jun 2020

See all articles by Georgina Tsagas

Georgina Tsagas

Brunel University London, Law School

Date Written: May 25, 2020

Abstract

An overview of the European Union’s varying policies on the harmonisation of Member States’ company and securities laws dating back to the 1970s showcases the Commission’s averseness to deviate from the path dependence of the shareholder primacy norm and the existence of a series of policies that superficially afford attention to ‘stakeholders’ rights’, ‘sustainability’ and ‘corporate social responsibility’. The article seeks to demonstrate that the ‘greenwashing’ attempts it identifies in several of the Commission’s documents and legislative initiatives have given rise to problematic outcomes, one of which is the subsequent whitewashing of recent initiatives that aim to provide real support to sustainability concerns. The question the article sets out to answer is whether, at this stage in time, the main sociolegal challenges in the form of tensions that the Commission was faced with, in an attempt to address corporate governance at European level in a uniform manner, can now be resolved so as to better support sustainability. If so, what ‘softer’ options are available to the legislator to signal a renewed approach to corporate governance and a deviation from the path dependence shareholder primacy norm? The argument that the article puts forward is that in order to better complement the latest, more positive attempts, that aim to support corporations’ sustainable practices, a reform of European Union Member States’ Corporate Governance Codes to include a robust stakeholder friendly provision may well constitute one pragmatic way forward.

Keywords: corporate governance, corporate governance codes, ESG, sustainability, EU Company Law, Company Law, CSR, Harmonisation

JEL Classification: K

Suggested Citation

Tsagas, Georgina, A Proposal for Reform of EU Member States’ Corporate Governance Codes in Support of Sustainability (May 25, 2020). Sustainability 2020, 12, 4328 part of the Special Issue 'Corporate Sustainability Reforms: Securing Market Actors’ Contribution to Global Sustainability', Available at SSRN: https://ssrn.com/abstract=3613637 or http://dx.doi.org/10.2139/ssrn.3613637

Georgina Tsagas (Contact Author)

Brunel University London, Law School ( email )

Kingston Lane
Elliott Jaques Building
Uxbridge, Middlesex UB8 3PH
United Kingdom

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