Response to Commission Consultation Document Proposal for an Initiative on Sustainable Corporate Governance

Consultation response
Finance Watch Cover page: Consultation response
Download the publication 30 pages, English

Finance Watch calls for an EU framework on director duties and due diligence in its 8 February consultation response.

They include:

  • A call for an EU framework specifying directors’ duty to act in the company’s long-term interest while taking into account broader stakeholder interests – moving away from the ‘shareholder primacy’ or ‘profit maximization model’ to a stakeholder-focused economic model.
  • Setting the right incentives can be a powerful tool to encourage certain behaviours and corporate decisions. Finance Watch strongly suggests to align corporate directors’ pay with corporate sustainability targets  (50% of variable remuneration).
  • Complement EU rules on directors’ duties with a mandatory environmental and human rights due diligence in corporate operations and global value chains.
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