Student name: Anna López Herreros

RUN-EU institution: University of Burgos, Spain

Abstract

The European Union is developing regulations to ensure that company directors make their decisions on the basis of the stakeholder interest principle instead of the shareholder interest principle, as is currently the case. This principle is very important when assessing the appropriateness of their decisions and the possible liability arising from them.

It would appear that the shift in the content of this principle to include the interests of all stakeholders and not only those of shareholders is a step towards achieving corporate sustainability. Here we understand corporate sustainability the way the United Nations defined it, i. e., the creation by businesses of medium- and long-term environmental, social and economic value, in addition to generating financial profitability. However, the principle of stakeholder interest creates uncertainties as to the primacy of interests in each case (it must be borne in mind that the interests of different stakeholders can often be competing) and what type of interests must be satisfied and to what degree. European regulations, for the time being, do not provide any guidance on how to interpret this principle.

In this paper we discuss whether we should stick to the principle of shareholder interests or apply, instead, the principle of stakeholder interests with a view to achieving corporate sustainability.