Integrating Sustainable Value Creation in Corporate Governance: Company Law, Corporate Governance Codes and the Constitution of the Company

Abstract

This chapter discusses how to integrate sustainable value creation corporate governance, through company law, corporate governance codes and corporate documents, notably the companies’ constitution. Currently, all of these, law, codes and constitutions, tend mainly to limit themselves to regulating the relationship between the board, senior management and shareholders, making minimal reference to the existence of and crucial contributions by other involved parties and affected interests comprising the business. Potentially laws, codes and constitutions can be remodelled in order to integrate sustainability into the governance of business.
The chapter analyses the emerging concept in company law and corporate governance of sustainable value creation and positions this within a research-based concept of sustainability. On this basis and drawing on a decade of collaborative research, we suggest how sustainable value creation within planetary boundaries could be integrated through a company law reform. We discuss how this could be followed up through reform of corporate governance codes, as a support for a law reform or as an alternative way to promote sustainable business while waiting for a legislative reform. Finally, we explore how the potential of integrating sustainable value creation in company constitutions can contribute to shifting business towards sustainability.

Keywords: sustainability, planetary boundaries, EU law, comparative law, global value chains, sustainability due diligence