KISH PARELLA, Washington and Lee University - School of Law
Email: vinayagamoorthyk@wlu.edu

International law and corporate governance share a special relationship: each can offer a way to address shortcomings in the other. International law offers potential solutions to negative externalities generated by corporate activity that harm consumers, employees, local communities, and a variety of non-shareholder parties. A variety of international agreements, customary international law, and non-binding recommendations address many of these externalities and can improve corporate conduct if adopted within corporate governance. The challenge is that international law norms are often under-enforced by state actors, thereby limiting their reach to corporate actors. However, corporate actors can address this shortcoming by directly incorporating international law into board oversight, management practices, and contract design. The incorporation of international law into corporate governance confronts both the corporate governance gap by addressing corporate externalities and the global governance gap by addressing international law’s enforcement challenge. This Chapter explained that a variety of stakeholder mechanisms apply international law norms to corporate governance and are therefore integral to making this symbiosis effective.

TODD PHILLIPS, Center for American Progress, Duke University School of Law
Email: c.todd.phillips@gmail.com

Leo Strine, Kirby Smith, and Reilly Steel make an important contribution to the corporate governance literature. In their article, Caremark and ESG, Perfect Together: A Practical Approach to Implementing an Integrated, Efficient, and Effective Caremark and EESG Strategy, they make the compelling case that Caremark’s obligation that directors "be reasonably informed concerning" the activities of their corporations—and be subject to legal liability if they are not—provides a foundation upon which directors can and should inform themselves as to whether their companies are acting in ESG-forward or otherwise ethical manners.

While Strine, Smith, and Steel include discussions of Caremark liability and associated legal gloss, the practical “takeaway” from their article is that directors must be engaged with their companies' ESG (or, as the authors write, EESG) efforts, addressing those matters that pose moral risk to their firms as well as those that only pose legal ones. And importantly, director engagement on ESG should not just be something that corporate boards implement, but that shareholders should be demanding.