Sustainable Corporate Governance: A Way Forward

Rarely has the report of a private consultancy caused so many reactions, in particular, criticism, in such a short period of time, as the 'Study on directors' duties and sustainable corporate governance' that Ernst and Young recently prepared for the European Commission DG Justice and Consumers (EY report). (Ernst & Young, Study on directors' duties and sustainable corporate governance, July 2020, available at, https://op. europa.eu/de/publication-detail/-/publication/e47928a2-d20b-11ea-adf7-01aa75ed71a1/language-en). In addition to the responses of various groups of scholars from both Europe and the US, (See, for instance Paul Kruger Andersen, Andri Begthorsson et al. Response to the Study on Directors' Duties and Sustainable Corporate Governance by Nordic Company Law Scholars (7 October 2020). Nordic & European Company Law Working Paper No. 20-12, available at, https://ssrn.com/abstract=3709762; Mark J. Roe, Holger Spamann, Jesse M. Fried and Charles C. Y. Wang, The European Commission's Sustainable Corporate Governance Report: A Critique (14 October 2020). European Corporate Governance Institute - Law Working Paper 553/2020, available at, https://ssrn.com/abstract=3711652) the Oxford Business Law Blog has launched a specific new series (More details and all contributions available at https://www.law.ox.ac.uk/business-law blog?terms_15=All&terms_16=All&author=All&date%5Bvalue%5D%5Bmonth%5D=&field_display_date_value_1%5Bvalue%5D%5Byear%5D=&keywords=Directors%E2%80%99+Duties+and+Sustainable+Corporate+Governance&jurisdiction=All&sort_order=DESC&sort_by=field_display_date_value&terms=) and the European Corporate Governance Institute has organized a three-day policy workshop, in order to bring together the presentations of over 20 distinguished scholars. (Programme and presentations available at https://ecgi.global/content/directors%E2%80%99-duties-and-sustainable-corporate-governance#!event-programme). This intensive debate demonstrates the importance of the topic for future EU policymaking in the area of corporate governance. In this piece, we argue that the main reason the EY report has attracted so much criticism is because it simply started out on the wrong foot. However, this shortcoming should not induce the Commission to misjudge company law's potential for sustainability. We discuss various measures that target both directors and shareholders, but also other stakeholders. Adopting these measures promises to be the way forward for a more sustainable, corporate governance framework.