Leading wherever they want? CSR, ESG and directors’ duties

Speaker: Professor Jens Hinrich Binder (LSE Law School Visiting Professor)
Chair: Professor Jo Braithwaite (LSE)

Focusing on the European perspective, this talk explores company directors’ duties in the context of the debate about promoting environmental and social (ESG) interests. It argues that, in contrast to traditional, shareholder-oriented concepts of directors’ duties, new stakeholder-oriented obligations have been established, inter alia, by new European legislation rooted in international standards. While far more detailed and prescriptive than traditional duties, however, the effect of these new obligations, in the absence of effective sanction regimes, may well turn out to widen, rather than narrow, the scope for discretionary, exploitative corporate decisions. The talk therefore ties in with the increasing critique of stakeholderist theories of corporate governance, particularly in the US legal literature, and highlights the differences between the US and European systems of corporate governance in this regard.