Abstract
Traditional corporate governance is in trouble. The shareholder value paradigm underlying the traditional levers of corporate governance – such as directors’ duties, performance-based compensation, and shareholder rights – are put under scrutiny by the need to move to a more sustainable economy. In line with this trend, we see an increasing number of corporations becoming certified B corporations, i.e. a group of externally verified corporations that meet the highest social and environmental standards. In this paper, we perform an empirical analysis of the corporate governance levers in place in B corporations. In particular, we analyse the articles of associations and corporate governance guidelines of a sample of publicly traded B corporations and determine the governance levers in place. The analysis shows that – while B corporations have made strong commitments to redefine their business in order to build a more inclusive and sustainable economy – these commitments are not always reflected in the incentives provided to their corporate decision-makers through executive compensation, directors’ duties, and shareholder rights. The paper concludes that more strongly tying these incentives to concrete sustainability targets could be an important step forward to building a more sustainable economy.
Registration
Please register your participation
If you have any questions, please contact our administration.