Reaction on the European Commission Study on Directors’ Duties and Sustainable Corporate Governance

Last year, the EU Commission launched an initiative on Directors’ Duties and Sustainable Corporate Governance[1]. The objective of this paper is to participate in the debate on the proposal by the EU Commission for including for largest EU companies an obligation to integrate sustainability into their decision making and action mechanisms. This proposal is part of a wider drive on sustainability which the Commission has adopted or is proposing several specific decisions addressing issues of climate change, air pollution, sea plastic pollution, water flooding, etc. There is a wide perception in the population at large that these evils cannot continue if we want our planet to be saved and remain healthy. Some measures call for urgent action, other call for more in-depth changes on the longer term, after having studied all alternatives

GUBERNA generally supports the idea that (listed) companies should contribute to the realization of sustainability objectives, whether in their decision making or in their industrial or commercial action.  GUBERNA and its members are pleased to be able to contribute to this reflection which is at the center of their preoccupations these days.

At a later stage the reflection might usefully be extended to other sources of detrimental environmental behaviour, emanating from local communities, public authorities, not-for-profit organization and small companies.  These entities are already quite aware of the need to contribute to a healthy environment, but the implementation of proactive measures still deserves further attention.

In what follows we elaborate on the key issues that were raised in the initial proposal on sustainable corporate governance as contained in the Final Report under the title “Study on Directors Duties and Sustainable Corporate Governance” as published in July 2020. In the meantime, the discussion is on-going and even interferes with parallel EU initiatives on Corporate Due Diligence[2]. GUBERNA closely follows up on the EU developments in this matter. We refer to the GUBERNA Reflection note[3] for a summary.

See the pdf below to read the full paper from Prof Eddy Wymeersch

[1] EU: Study on directors' duties and sustainable corporate governance", Final Report, July 2020, ( “Study”) DS0320415ENN.en.pdf; Annex 1, DS0320416ENN.en.pdf

[2] https://www.europarl.europa.eu/doceo/document/TA-9-2021-0073_EN.html

[3] GUBERNA Reflection Note : “European initiatives on Sustainable Corporate Governance and Corporate Due Diligence” April 15th 2021.