Roy Shapira: Europe’s Corporate Sustainability Directive and Its Impact on U.S. Board Oversight Duties

Apr 28, 2025

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(0:00) Intro

(1:30) About the podcast sponsor: The American College of Governance Counsel

(2:17) Start of interview

(3:01) Roy's origin story.

(6:35) About the EU Corporate Sustainability Due Diligence Directive ("CS3D"). His paper co-authored with Luca Enriques and Matteo Gatti: How the EU Sustainability Due Diligence Directive Could Reshape Corporate America (2025)

(9:28) The Political Climate of ESG, and divide between US and EU. *On March 15, 2025, Tennessee senator Bill Hagerty filed "Protect USA Act", an anti-CS3D bill.

(12:45) Extraterritorial Reach of the CS3D

(14:20) What US board must do to comply with CS3D

(16:32) Oversight Duties Under U.S. Law ("Caremark Duties")

(23:10) Linking Caremark Duties with CS3D

(26:00) Sanctions for Non-Compliance with CS3D

(29:47) Compliance and Enforcement Mechanisms

(33:35) Changes to Delaware Corporate Law. Reference to Delaware's SB21

(34:26) Changes to Section 144 (controlling shareholder transactions)

(37:15) Changes to Section 220, Shareholder Inspection Rights

(41:33) Changes to independent director analysis by Delaware's SB21

(45:29) Geopolitical Tensions and Corporate Governance. "My general theme is that I don't envy being a director right now."

(46:48) The Impact of Specialist Directors. See his 2024 paper with Yaron Nili here.

(48:27) Books that have greatly influenced his life.

(49:10) His mentors.

Professor Mark Roe (Harvard Law School)
Professor Luigi Zingales (Chicago Business School)

(49:50) Quotes that he thinks of often or lives his life by: "Control what you can control."

(50:27) An unusual habit or an absurd thing that he loves.

Roy Shapira is a Professor of Law at Reichman University in Israel. He focuses his research on reputation, regulation, and corporate governance.

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