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Toward Sustainable Corporate Governance: Where Are We Headed? At What Speed?
Europe and the United States are moving in the same direction, but at different speeds, toward a model of sustainable corporate governance. In the United States, corporate law is a matter of state law (not federal), and Delaware law therefore reigns. In part for this reason, the longstanding shareholder primacy model has not been seriously challenged (although it is certainly debated). Europe, the European Commission is the pivotal body, and it has announced stewardship codes and other statements that emphasize responsibilities to stakeholders and the environment. In both countries, however, there is a movement to expand “ESG” disclosures (an acronym for”Environmental, Social and Governance”), and the SEC is moving aggressively to require mandatory disclosures that public corporations will be required to make regularly with regard to climate change, carbon emissions, diversity goals and progress, and related matters. Equally important, new bodies are being created to establish metrics for such disclosures. We may eventually see “generally accepted sustainability principles” that will be melded into generally accepted accounting principles. This panel will trace recent developments and offer predictions as to what will happen next.