European Business Law Review
Volume 35, Issue 3/4 (2024) pp. 367 – 382

https://doi.org/10.54648/eulr2024023

Abstract

This essay explores possible shareholder claims in the United States that may arise if and when member states of the European Union implement the proposed Directive on Corporate Sustainability Due Diligence. As a doctrinal matter, legal compliance obligations for corporations incorporated in Delaware extend beyond the borders of the United States. Under Delaware law, shareholders can bring viable fiduciary suits against directors and officers when corporations violate applicable “positive law.” This jurisprudence, principally aimed at ascertaining whether directors and officers betrayed shareholders by engaging in or facilitating lawbreaking, is not limited to complying with American law. As Delaware corporations expand their operations globally, their compliance obligations necessarily include sources of non-American law, including the laws of European nations. Interestingly, the Directive may require American corporations to comply with international treaties that the political branches of the United States have not incorporated as binding sources of domestic law. While exploring scenarios where shareholder claims may be viable, this essay also highlights several limiting principles that may constrain the Directive from opening the floodgate to shareholder suits in the United States.

Extract

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