Shareholder primacy: the main barrier to sustainable companies

Abstract

The Sustainable Companies Project commenced in 2010 and has involved a team of more than 40 legal scholars mapping the law in 26 jurisdictions across the globe. This document summarises the company law analysis based on that mapping and on further extensive research into the barriers and possibilities company law provides for sustainable companies, conducted by the head of the project, Professor Beate Sjåfjell, together with Professors Andrew Johnston and David Millon, and research assistant Linn Anker-Sørensen. Our focus, like that of the project, is on the environmental dimension of sustainability, with climate change as our case in point. 1

Gender Diversity in the Boardroom and It's Impacts: Is the Example of Norway a Way Forward?

“…However, as a matter of law, this is to a great extent incorrect, especially when the relevant 'purpose' is understood as society's purpose for companies in the aggregate. 83 No company law system insists on boards focusing only on returns to shareholders. 84 All jurisdictions expect boards to ensure compliance with environmental regulation.…”

Policy Hotspots for Sustainability: Changes in the EU Regulation of Sustainable Business and Finance

“…This norm is related to the notion of viewing the corporation as the shareholders' property, or as a 'nexus of contracts' in which the shareholders need to receive the main protection, a norm that does not seem to follow from company law [19][20][21][22][23]. The narrow focus on what the purpose of the corporation is, limits the possibility to change corporate behaviour and there is therefore a need to include regulation and governance of business decision-making in the toolbox for sustainability [22]. It is not something that prevails over all economic activity, but it is an important aspect to consider for enabling sustainable corporate behaviour.…”

“…One implication coming from institutional fragmentation and the usage of the shareholder maximisation norm seems to be a research gap, with very limited systematical analysis of EU business law and financial market law in relation to sustainability [22]. The paper aims to address this gap by first interrogating these two fields of law through a sustainability lens, using the 'safe operating space' for global societal development [1,2] as an entry point for the analysis of where we can find content in line with or related to the sustainable development principle.…”

Corporate Social Responsibility and Contemporary Community Expectations

“…Based on this situation, there must be some method to prompt company to aim at long term and sustainable development, which generally protect the environment and society. The traditional view of Australian companies is acting in the best interest of shareholders, creditors and the companies that would be the barrier to sustainable development (Sjåfjell et al, 2015). This article focuses on corporate social responsibility should be reckon in the company responsibility.…”