Corporate governance for sustainability : Statement

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

The EU’s approach to environmentally sustainable business : can disclosure overcome the failings of shareholder primacy?

Achieving sustainability requires that business not only complies with environmental law, but also that business goes beyond that which is expressly regulated by environmental law. This chapter examines regulatory approaches that seek to integrate environmental sustainability into the decision-making of business. In canvassing the EU’s main policy and legislative initiatives, we find strong reliance on various forms of disclosure, insufficient to mitigate the destructive social norm of shareholder primacy. This Anglo-American, law-and-economics inspired concept is not rooted in EU law, but has spread and gradually colonised the discretionary space that European company law gives corporate decision-makers to decide on how to best run the companies. The result is a prioritisation of short-term maximisation of shareholder returns. A fundamental shift towards coherent and more stringent regulation is needed to mitigate shareholder primacy and realise the potential of European business to contribute to sustainability

The EU and the Proliferation of Integration Principles under the Lisbon Treaty

The entry into force of the Lisbon Treaty has brought about a proliferation of “integration principles”. In addition to the environmental integration principle, which has been part of the EU legal framework for some time, the Lisbon Treaty introduced the principles of gender equality integration, social policy integration, non-discrimination integration, consumer protection integration as well as animal welfare integration. Furthermore, a general principle of integration policy objectives is contained in Article 7 TFEU, requiring that the Union must ensure consistency between its policies and activities, taking all relevant policy requirements listed under the TFEU into account in the adoption of any legislative measure. These integration principles must be pursued, or at least taken into account, when decisions are being taken in almost any area of EU policy-making. However, there is considerable uncertainty regarding the normative implications of the various integration principles as well as their legal value and practical relevance for EU policymaking. This book addresses the implications of the proliferation of sectorial integration principles and the introduction of a universal requirement of policy consistency in terms of the division of competences between the Union and the Member States as well as the scope for judicial review of the EU legislative process. In particular, it explores whether the introduction of various integration principles has led to an extension of Union competences and whether it has limited the scope for judicial review by extending the discretionary power of the Union institutions

Takeover Bids European Law and Corporate Governance

Le norme relative all'offerta pubblica d'acquisto (OPA) sono pacificamente considerate un elemento centrale nel dibattito in tema di corporate governance. Il rischio di un'OPA – e del conseguente avvicendamento nel controllo della società – dovrebbero motivare gli amministratori ad agire nel miglio interesse degli azionisti (c.d. disciplinary mechanism). Le norme europee sull'OPA sono dettate nella Direttiva 2004/25/EC, che trova applicazione alle offerte di strumenti finanziari di emittenti assoggettati agli ordinamenti degli Stati Membri. Il lavoro analizza le regole europee sull'OPA, sottolineando le diverse scelte di attuazione compiute, ove possibile, dai singoli Stati Membri. Il lavoro si occupa inoltre del processo di riforma della Direttiva che dovrebbe basarsi, innanzitutto, sui vantaggi e gli svantaggi dell'applicazione della Direttiva registrati dal 2004 ad oggi.The rules on takeover bids are generally considered to be an important factor within the debate on corporate governance. The risk of a takeover bid – and of a consequent change in company control – should motivate a company’s board to act in the best interests of the shareholders (the so-called disciplinary mechanism). The European rules on takeover bids are enshrined in Directive 2004/25/EC (which is also known as the Thirteenth Directive on Company Law), which applies to bids for securities of companies (issuers) governed by the laws of Member States. This chapter analyses the European rules on takeover bids, and highlights certain national options for implementing the Directive, although a revision of the European Directive, which will be based, among other things, on an examination of the advantages and disadvantages of its application, has been under way since 2004. The chapter also considers the revisions currently being proposed by the European Commission and the European Parliament