Ref. Ares(2021)5245063 - 24/08/2021
one-sided academic sources, the lack of rigorous evidence and biased reasoning. Even
one of the key world figures on responsible business conduct, John Ruggie, the architect
directors are not the main driver of short-termism and advises against a corporate
governance reform. Consequently, the policy recommendations stemming from the
analysis are deeply flawed and should not guide the future initiative. In the words of the
recently published Commission communication2 scientific evidence is another
cornerstone of better regulation vital to establishing an accurate description of the
problem, a real understanding of causality and therefore intervention logic; and to
evaluate impact. The present impact assessment needs to live up to this important
principle.
Notwithstanding this flow of substantial criticisms on the study, the subsequent public
consultation running until February 2021 refers directly to the conclusions of the study,
basing many of its questions on the findings and assumptions made in the former.
In the same vein as the study, several questions of the consultation document were
biased and did not allow responders to express dissenting opinions3. Such dissenting
opinions will therefore risk not appearing in the consultation feedback report. The
the
drafters of the questionnaire have ignored an elementary principle of questionnaire
design which is that it should aim to ensure that the answers to the questions asked
reveal the full extent of social reality (in this case the full extent of the views held) rather
than suppor
of the questionnaire design undermines the very fundamentals of better regulation. It is
our understanding that such flaws as appear in the consultation document might also go
against the
Our main research areas are stewardship
(responsible, long-term ownership), board work, and compliance. We find that the EY Study has
serious and systematic flaws in all three areas
I personally benefit from
evidence claiming that the current system is short-termist and needs to be radically reformed.
However, I believe even more strongly in the importance of following the most rigorous
evidence, regardless of what it finds
Response from 21 Nordic law professors:
ts approach and so
openly and excessively political in furthering a specific regulatory outcome, that we find
Comments by Harvard Law School at
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12548-Sustainable-
corporate-governance/F594640 and from Law School of Columbia University at
https://clsbluesky.law.columbia.edu/2020/11/09/the-european-commissions-sustainable-
corporate-governance-report-a-critique/
2 Commission communication on better regulation, 29 April 2021, page 6:
https://ec.europa.eu/info/sites/default/files/better regulation joining forces to make better laws e
n.pdf
3 See, questions 1, 8 and 10 which make assumptions on short-term behaviour and disregard of
stakeholders interests by companies and their directors; question 22 which assumes sustainability
expertise in boards does not exist.
2