Consultation response
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.
