By Beate Sjåfjell, Benjamin J. Richardson
This research of the limitations to and possibilities for selling environmental sustainability in corporation legislations presents an in-depth comparative research of corporation legislation regimes the world over. The social norm of shareholder primacy is the best barrier combating growth, and it additionally is helping clarify why voluntary motion by means of businesses and traders is inadequate. via deconstructing the parable that shareholder primacy has a criminal foundation and difficult the industrial postulates on which mainstream company governance debate relies, corporation legislation and Sustainability unearths an incredibly huge unexplored strength inside present corporation legislation regimes for firms to reorient themselves in the direction of sustainability. It additionally indicates attainable tools of reforming the prevailing criminal infrastructure for corporations and offers a tremendous contribution to the wider debate on find out how to in attaining sustainability.
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Additional info for Company Law and Sustainability: Legal Barriers and Opportunities
Such reform should include an express redefinition of the purpose of companies and its implications for the role, duties, and liability of the board. This has the potential to make more effective the external regulation of companies and realise the potential within each company to make its own independent, creative, and active contribution to society’s transformation to sustainability. The analysis of corporate boards of directors is continued in Blanaid Clarke’s more specialised Chapter 4, ‘The role of board directors in promoting environmental sustainability’.
Both shareholders and non-shareholders stand to gain, so this version of CSR has the potential to overcome objections based on shareholder primacy. Two caveats are made. First, shareholders may still object if they are unwilling to tolerate the near-term costs of investment in stakeholder well-being in return for financial benefits that will materialise, if at all, only in the long run. Additionally, because the costs of strategic CSR are justified by financial benefits, there is a built-in limit; companies will invest in environmental sustainability and other stakeholder benefits only if they perceive that they stand to profit.
She discusses the role that boards and individual directors can play in ensuring that their companies act in a manner that promotes sustainability. Clarke considers how this role has developed in recent times with a view to what is expected of boards and what discretion is afforded to them in this respect. She describes the manner in which corporate boards are regulated, with particular emphasis on UK and EU-level regulation. The chapter examines the evolution of the role of non-executive directors and considers their role in embedding sustainability within the business organisational framework.