DIRECTORS' DUTIES AND CLIMATE CHANGE - AVOIDING 'TRAGEDY OF THE HORIZONS'

Abstract

This dissertation reviews the evolution of a corporate director’s duties and how various attempts have been made to expand it beyond the narrow definition found in the shareholder primacy doctrine. The dissertation argues that despite climate change having been identified as a material issue for companies1 it has not been incorporated by ‘well-intentioned’ directors in corporate decision making. At the risk of becoming a roadmap of excuses, this dissertation has identified corporate law concepts such as a ‘who is the company’ and ‘how to promote the best interest of the company’, as legal obstacles preventing well-intentioned directors from acting on climate change. It goes further and attempts to expand on these legal concepts to suggest theoretical pathways to incorporate climate change as a duty for directors. History of climate change litigation is also reviewed so as to see how the practical enforcement in courts is progressing or slowing the actual adoption of such a duty amongst directors. The dissertation concludes by recommending on a new form of corporation, ‘B Corporation’ and also a new form of owner, ‘Panvestor’ rather than investor, that would allow for ‘well-intentioned’ director to act on climate change issues without fear of a shareholder primacy breach.