Response to the Study on Directors’ Duties and Sustainable Corporate Governance by Nordic Company Law Scholars

Abstract

The Study on Directors’ Duties and Sustainable Corporate Governance (hereinafter ‘The Study’) was published on 30 July 2020 and is accompanied by a Commission Inception Impact Assessment and a consultation deadline of 8 October 2020. The Assessment adds very little to the Study and this response is consequently made to the Study by a group of Nordic company law scholars.

Resume of Findings
The Study displays a lack of understanding of the nature of legal discourse and presents a biased, unrepresentative and highly politically motivated survey of literature and empirics.

The Study misrepresents fundamental concepts of company law and fails to understand how corporate governance works.

The Study exaggerates the problem of climate change and neglects the many other, equally serious, problems facing both company directors and EU legislators in their obligations to their respective constituencies.

The policy pursued by the Study contravenes both fundamental concepts of ownership rights inherent in European law and the basic policies that underlie the founding treaties of the European Union and its assumptions are equally incompatible with EU secondary legislation on company law and capital markets.

The Study underestimates the many existing measures adopted by EU legislators and their potential to serve as alternatives to its own far-reaching measures in a way that fundamentally would void the principle of subsidiarity and deprive Member States of control with their own economies.

The regulatory options recommended by the Study would seriously harm European business and prevent it from continuing to contribute to the sustainable growth and prosperity that the Union needs to fulfil its overall policies.

On this basis, we find that the Study cannot serve as the basis for contemplating the proposed regulatory initiatives and that any discussion must proceed on a better informed foundation brought about by a free and unbiased discourse.

Keywords: directors' duties, sustainable corporate governance

JEL Classification: K22