Corporate Governance for Sustainability




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Peer reviewed



The current model of corporate governance needs reform. There is mounting evidence that the practices of shareholder primacy drive company directors and executives to adopt the same short time horizon as financial markets. Pressure to meet the demands of the financial markets drives stock buybacks, excessive dividends and a failure to invest in productive capabilities. The result is a ‘tragedy of the horizon’, with corporations and their shareholders failing to consider environmental, social or even their own, long-term, economic sustainability. With less than a decade left to address the threat of climate change, and with consensus emerging that businesses need to be held accountable for their contribution, it is time to act and reform corporate governance in the EU. The statement puts forward specific recommendations to clarify the obligations of company boards and directors and make corporate governance practice significantly more sustainable and focused on the long term.



corporate governance, company law, director duties, board obligations, sustainable finance action plan, sustainability strategy, ESG, shareholder primacy, sustainable development, climate change


Johnston, Andrew and Veldman, Jeroen and Eccles, Robert G. and Deakin, Simon F. and Davis, Jerry and Djelic, Marie-Laure and Pistor, Katharina and Segrestin, Blanche and Williams, Cynthia A. and Millon, David K. and Ireland, Philip and Sjåfjell, Beate and Bruner, Christopher M. and Talbot, Lorraine E. and Willmott, Hugh Christopher and Villiers, Charlotte Louise and Liao, Carol and Valiorgue, Bertrand and Glynos, Jason and Sayre, Todd L. and Morgan, Bronwen and Wartzman, Rick and Sikka, Prem and Gregor, Filip and Jacobs, David Carroll and Gill, Roger and Brown, Roger and Bavoso, Vincenzo and Lancastle, Neil and Matthaei, Julie and Taylor, Scott and Larsson-Olaison, Ulf and Cullen, Jay and Dignam, Alan J. and Joo, Thomas Wuil and O'Kelly, Ciarán and Keating, Con and Tomasic, Roman A. and Lilley, Simon and Tennent, Kevin and Robson, Keith and Maley, Willy and Chiu, Iris H-Y and McGaughey, Ewan and Rees, Chris and Boeger, Nina and Leaver, Adam and Moore, Marc T. and Paape, Leen and Meyer, Alan and Palazzi, Marcello and Kaul, Nitasha and Espinosa-Cristia, Juan Felipe and Kuhn, Timothy and Cooper, David J. and Soederberg, Susanne and Jansson, Andreas and Watson, Susan Mary and Sitbon, Ofer and Loughrey, Joan and Collison, David J. and McCulloch, Maureen and McCulloch, Maureen and Samanta, Navajyoti and Greenwood, Daniel J.H. and Thompson, Grahame F. and Keay, Andrew R. and Contu, Alessia and Rühmkorf, Andreas and Hull, Richard and Esser, Irene-Marie and Chabrak, Nihel, Corporate Governance for Sustainability (December 11, 2019). Available at SSRN: or


Research Institute

Finance and Banking Research Group (FiBRe)