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52 N.Y.U. J. Int'l L. & Pol. 641 (2019-2020)
Codetermination and ESG: Viable Alternatives to Shareholder Primacy?

handle is hein.journals/nyuilp52 and id is 645 raw text is: CODETERMINATION AND ESG: VIABLE ALTERNATIVES TO SHAREHOLDER PRIMACY? By PIERRE J. ALLEGAERT* I. INTRODUCTION .................................. 642 II. CODETERMINATION .............................. 647 A. A Comparative Example: Codetermination in Germany .................................... 648 B. Previous Attempts at Codetermination in the United States. ............................ 653 C. Impact of Codetermination................... 655 1. Theoretical Discussions .................. 656 2. Empirical Observations .................... 661 III. THE RISE OF ESG ......................... 665 A. Development of ESG Measures ................ 666 B. Levels of Adoption. ....................... 670 C. Impact of ESG ........................... 672 1. Theoretical Discussions ................... 673 2. Empirical Observations.................. 676 IV. CONCLUSIONS AND PREDICTIONs ................. 679 In 2018, in response to growing concerns over corporate wealth, wage stagnation, and income inequality, Senator Elizabeth Warren proposed a bill that would require U.S. companies with more than one billion dollars in annual revenue to obtain federal corporate charters. Perhaps the most dramatic requirement of this proposed federal law is that it would mandate that at least forty percent of the board members of a corporation subject to the law be elected by employees. As this note will show, the proposal would depart significantly from the recent history of U.S. corporate law. Over the past few years, however, US. corporations have been adopting their own internal changes to ensure greater representation of stakeholder interests-those of employees, customers, and neighbors, as well as other constituencies-in corporate decision making within a framework commonly referred to as ESG (Environmental, Social, and Governance). This note provides a comparative analysis of the advantages and disadvantages of board codetermination, largely through discussion of its historical existence under German law, and ESG in order to determine whether government-enforced * J.D. cum laude and McKay Scholar 2019, New York University School of Law; M.A. 2016, Universittt Leipzig; B.A. with Distinction 2014, Stanford Uni- versity. I would like to thank Professor Ed Rock, whose seminar on corporate governance allowed this note to take shape, and the editors of the Journal of International Law and Politics for their diligent work. 641 Imaged with Permission of N.Y.U. Journal of International Law and Politics

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