The Corporate Governance Review: Editor's Preface

I am proud to present this new edition of The Corporate Governance Review to you.

In this 12th edition, we are seeing that corporate governance has become an even more vital and all-encompassing topic, especially this second year after the start of the covid-19 pandemic – a year in which we have continued to see climate issues, political instability, technological change, a steady increase in attention to environmental, social and corporate governance (a stakeholder model to which many countries are moving), green finance and the demand from both employees and customers for a sound reputation for the best personal health and moral responsibility. As this Review's previous editor mentioned in his preface, we all realise that the modern corporation is one of the most ingenious concepts ever devised. Our lives are dominated by corporations. We eat and breathe through them, we travel with them, we are entertained by them, and most of us work for them. Most corporations aim to add value to society, and they very often do. There is increasing emphasis on this. Some, however, are exploiting, polluting, poisoning and impoverishing us, which can create a depressed reputation for business. A lot depends on the commitment, direction and aims of a corporation's founders, shareholders, boards, management and employees. Do they show commitment to all stakeholders and to long-term shareholders, or mainly to short-term shareholders? And how do corporations report? It has become increasingly relevant that corporations report on not only financial information, but also on reliable and comparable sustainability information – non-financial information that investors and other stakeholders need.

We fortunately continue to see proposals for new laws, regulations and other initiatives for a global framework of sustainability disclosure that is based upon the needs of investors and the financial markets. I should like to highlight two developments in this respect. First, the EU Corporate Sustainability Reporting Directive (CSRD) proposal of April 2021. It forms part of the European Green Deal. This proposal should assist companies in meeting the increasing demands for sustainability information. Companies within the scope of the CSRD proposal would have to report on a whole range of sustainability issues relevant to the company's business. Sustainability information would cover not just environmental factors but also social and governance factors. Governance factors encompass the role of the corporation's administrative, management and supervisory bodies (including with regard to sustainability matters and their composition; business ethics and corporate culture, including anti-corruption and anti-bribery; the corporation's political engagements, including its lobbying activities; the management and quality of relationships with business partners, including payment practices; and the corporation's internal control and risk management systems, including for the reporting process). The EU has indicated that it is clearly in the interest of the EU and European companies and investors to have standards that are globally aligned, and has indicated that EU standards should aim to incorporate the essential elements of globally accepted standards currently being developed.

This touches upon the second development I want to mention. The trustees of the IFRS Foundation announced the formation of the International Sustainability Standards Board (ISSB) on 3 November 2021 at COP26 in Glasgow. The ISSB will develop – in the public interest – standards that will result in a high-quality, comprehensive global baseline of sustainability disclosures focused on the needs of investors and the financial markets. The aim of the ISSB's standards is to cover important sustainability topics (environmental, social, governance – ESG) on which investors would like to be informed. Climate-related information will be dealt with first, given the urgency in this field. The ISSB has indicated that it will build on the work of existing investor-focused reporting initiatives to become the global standard-setter for sustainability disclosure for the financial markets. These two initiatives – on a regional and a global scale – may prove to bring about a sea change in the way corporations report and – maybe – conduct their business.

Each country has its own laws, codes and measures; however, the chapters in this Review also show a convergence. Understanding differences leads to harmony. The concept underlying the book is that of a one-volume text containing a series of reasonably short, but sufficiently detailed, jurisdictional overviews that permit convenient comparisons, when a quick first look at key issues would be helpful to general counsel and their clients.

My aim as the new editor of this Review will continue to be to achieve a high quality of content so that the Review will be seen as an essential reference work in our field. To meet the all-important content quality objective, it was a condition sine qua non to attract as contributors colleagues who are among the recognised leaders in the field of corporate governance law from each jurisdiction.

I would like to thank my partner and wonderful colleague Willem Calkoen for his outstanding work over the past years as editor of this Review. It is an honour to take over from him, and I fully realise that I have some big shoes to fill. For now, I would like to thank all the contributors who have helped with this project. I hope this book will give you food for thought. Further editions of this work will obviously benefit from the thoughts and suggestions of its readers. We will be extremely grateful to receive comments and proposals on how we might improve the next edition.

Petra Zijp
NautaDutilh
Amsterdam, The Netherlands
March 2022

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