3rd Scientific Conference CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Piran, Slovenia, 23 June 2025 BOOK OF CONFERENCE ABSTRACTS 3rd Scientific Conference CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Piran, Slovenia, 23 June 2025 BOOK OF CONFERENCE ABSTRACTS Koper 2025 3rd SCIENTIFIC CONFERENCE CONTENTS CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Book of Conference Abstracts Editors / Urednika in urednica: Rado Bohinc, Jeff Schwartz, Anita Hrast 5 WELCOME ADDRESSES Editor-in-Chief of Annales ZRS / Glavni urednik založbe Annales ZRS: Tilen Glavina 7 CONFERENCE PRESENTATION Co-authors / Soavtorji: according to the conference program / skladno s programom konference 11 CONFERENCE PROGRAM Technical Editor / Tehnična urednica: Alenka Obid Design / Oblikovanje: Alenka Obid 14 PHOTOGALLERY Layout / Prelom: Alenka Obid Cover / Naslovnica: Alenka Obid ABSTRACTS Publisher / Izdajatelj: Znanstveno-raziskovalno središče Koper, Annales ZRS / Science and Research Centre Koper, Annales ZRS PANEL 1: SHAREHOLDER VOTING For the publisher / Za izdajatelja: Rado Pišot 21 Rado Bohinc Koper, 2025 CSR as Directors’ Duty? Comparative Reflections and Findings On-line edition / Spletna izdaja, pdf Available at / Dostopno na: https://doi.org/10.35469/978-961-7195-91-0 30 Jill Fisch & Jeff Schwartz Can Shareholders Vote their Values? The conference is part of a research project entitled SOCIAL RESPONSIBILITY OF COMPANIES der: ZRS Koper, Law Institute. / Konferenca je del raziskovalnega projekta z naslovom DRUŽ- 31 AS THE RESPONSIBILITY OF DIRECTORS (ARIS registration number: J5-4582), project hol- Jill E. Fisch & Adriana Z. Robertson BENA ODGOVORNOST PODJETIJ KOT ODGOVORNOST DIREKTORJEV (evidenčna številka Corporate Political Disclosure And Shareholder Voting ARIS: J5-4582), nosilec projekta: ZRS Koper, Pravni inštitut. All contributions were in double scientific reviews. / Vsi prispevki so bili dvojno recenzirani. 33 Sergio Alberto Gramito Ricci, Christina M. Sautter The authors are responsible for the authenticity of the texts. Papers are not proofread. The opi- Corporate Disenfranchisement nions of authors are not necessarily the opinions of the editorial board. / Za verodostojnost besedil so odgovorni avtorji. Prispevki niso bili lektorirani. Mnenja avtorjev niso nujno tudi PANEL 2: CORPORATE GOVERNANCE mnenja uredniškega odbora. The publication is free of charge. / Publikacija je brezplačna. 36 Kobi Kastiel, Yaron Nili Opting Out of Court? Reputation and Informal Norms in Private Equity 38 Sergio Alberto Gramito Ricci, Daniel J.H. Greenwood, Christina M. Sautter The Shareholder Democracy Lie Kataložni zapis o publikaciji (CIP) pripravili v Narodni in univerzitetni knjižnici v Ljubljani COBISS.SI-ID 240288771 ISBN 978-961-7195-91-0 (PDF) CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG 40 Jerneja Prostor Dear Ladies and Gentlemen, Business Decisions by Artificial Intelligence 44 Dušan Jovanovič, Nikola Jovanović We are pleased to invite you to the 3rd Scientific Conference, titled Corpo- Corporate Social Responsibility – Quo Vadis? rate Governance and Technology in the ESG Era, to be held in Piran, Slovenia (onsite & online), on June 23, 2025. PANEL 3: DIGITAL RIGHTS, ESG & SECURITIES ENFORCEMENT The organizer of the conference is the Science and Research Centre Koper 46 Alessio (ZRS Koper), and the co-organizers are EMUNI University and IRDO (Insti- Bartolacelli tute for the Development of Social Responsibility), all from Slovenia. The Guess Who’s Coming to Dinner? Instruments to Internalize the conference is part of a research project titled SOCIAL RESPONSIBILITY OF Stakeholders in the Companies: A European View COMPANIES AS THE RESPONSIBILITY OF DIRECTORS (ARIS registration 48 number: J5-4582), project holder: Science and Research Centre Koper - Law Rado Bohinc Institute. Legal Aspects of Digitalisation The authors will present papers at the intersection of corporate govern- 51 Urška Velikonja ance and technology, with an emphasis on how boards can represent share- The Point of Jarkesy holder views and values, and the responsibilities of boards to operate their companies sustainably. ADDITIONAL PAPER CONTRIBUTIONS FROM PARTICIPANTS Conference participation is for free. Registration is demanded for all par- 54 Marica Mazurek May 2025 at latest. ticipants (online & onsite). Final conference program will be published in The innovation in the Canadian educational institution and cultural differences in managerial approach – University of Waterloo, We look forward to your participation and discussion at this important Canada conference. Sincere thanks in advance for your interest! With kind regards, Prof. Dr. Rado Bohinc, President of the Conference Program Committee, EMUNI University CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Ladies and Gentlemen, Distinguished Guests CONFERENCE PRESENTATION of the 3rd Scientific Conference: Corporate Governance and Technology in the ESG Era, Esteemed Colleagues of the Science and Research Centre Koper, the EMU- CORPORATE GOVERNANCE AND TECHNOLOGY IN NI University and IRDO Institute. THE AGE OF ESG It is a pleasure and an honour for me to greet you all here in Slovenia, in the beautiful coastal town of Piran. We are privileged to organize such a On June 23, 2025, the 3rd International Scientific Conference will be held in conference, with many renowned legal scientists, experts, scholars and prac- Piran, where several top legal experts from different countries of the world will titioners from many countries around the world. give lectures. Participation in the conference is free of charge. Your insights will undoubtedly shape the future of corporate governance and technology regulations - both with awareness on importance of social responsibility and sustainability. (Koper, June 18, 2025) On June 23, 2025, the 3rd International Sci- A special word of gratitude goes to Prof. Dr. Rado Bohinc, the President of entific Conference entitled Corporate Governance and Technology in EMUNI, and Professor Dr. Jeff Schwartz from Utah Law School, for their idea the ESG Era will be held in Piran, at the premises of EMUNI University, to organize it and for their invaluable contributions to this event. Kidričevo nabrežje 2, Slovenia, EU. The conference will be held both, on-site and online. Our institution, ZRS Koper, is proud to work closely with EMUNI. Together, we strive for research excellence and innovation in the Mediterranean area. Ten top authors will discuss corporate governance and technology. The As you embark on your legal discussions, let us embrace the exchange conference will bring together leading scientists from Slovenia and the world to discuss you enjoy not only the intellectual stimulation of the conference but also the between corporations and what is the public good. charm of Piran, Koper and entire Slovenian Coast. The participants will be greeted by Prof. Dr. Rado Pišot, Director of the Looking forward for fruitful cooperation with you - today and in the fu-of ideas and foster partnerships that drive meaningful progress. We hope their decision-making and to what extent technology can bridge the gap how boards can integrate broader societal interests into ture, to create better science and better world. Science and Research Centre Koper , and Prof. Dr. Rado Bohinc, Presi- dent of the EMUNI University and Chairman of the Conference Program Thank you for your presence and contributions. Committee. The lectures will be given by the following professors of law: Alessio Bartolacelli, Rado Bohinc, Jill Fisch, Dušan Jovanovič, Yaron Nili, Jerneja Prostor, Sergio Alberto Gramitto Ricci, Christina Sautter, Jeff Prof. dr. Rado Pišot, Schwartz, Urška Velikonja. Director of ZRS Koper Participation in the conference is for free, you can register here: https:// us02web.zoom.us/meeting/register/50fnXVq1Q_O0nXaC0uH0Zw#/regis- tration The conference is organized by the Science and Research Centre Koper, the co-organizers are EMUNI University and IRDO - Institute for the De- CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG velopment of Social Responsibility , all from Slovenia, EU. The conference ORGANISER is part of the research project entitled CORPORATE SOCIAL RESPONSIBIL- Science and Research Centre Koper (ZRS Koper) ITY AS THE RESPONSIBILITY OF DIRECTORS (ARIS number: J5-4582), project leader: Science and Research Centre Koper - Institute of Law. The co-financer is ARIS – Slovenian Research and Innovation Agency. # CO-ORGANISERS EMUNI University Co-financer: IRDO – Institute for the Development of Social Responsibility ACKNOWLEDGMENT The conference is part of a research project entitled SOCIAL RESPONSIBILITY OF COMPANIES AS THE RESPONSIBILITY OF DIRECTORS (ARIS registration Additional information: number: J5-4582), project holder: ZRS Koper, Law Institute, funded by the Science and Research Centre Koper, Garibaldijeva 1, SI - 6000 Koper, Slovenia Slovenian Research and Innovation Agency. https://www.zrs-kp.si/instituti-in-enote/pravni-institut/ Contact: 031 344 883 (Anita Hrast), e-mail: anita.hrast@zrs-kp.si CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CONFERENCE COMMITTEES CONFERENCE PROGRAM PROGRAMME COMMITTEE: 3rd Scientific Conference Dr. Rado Bohinc, President CORPORATE GOVERNANCE AND TECHNOLOGY IN THE ESG ERA Dr. Bojan Tičar, Vice-president Piran, Slovenia, June 23, 2025 Dr. Jeff Schwartz, Vice-President Dr. Rado Pišot, Member 8:30 Dr. Roberto Biloslavo, Member Registration, morning coffee Dr. Andreja Primec, Member Dr. Dušan Jovanovič, Member 9:00–9:20 Dr. Borut Bratina, Member INTRODUCTION Dr. Morten Huse, Member Moderator: Anita Hrast Dr. Parameswar Nayak, Member Prof. Rado Pišot, PhD, Director of Science and Research Centre Koper ORGANISATIONAL BOARD: MSc. Anita Hrast, President Prof. Rado Bohinc, PhD, Dr. Bojan Tičar, Vice-President President, EMUNI University Rade Trivunčević, Vice-President Prof. Jeff Schwartz , Mateja Vraneš, Member Hugh B. Brown Presidential Professor of Law, University of Utah, Erika Čok, Member S.J. Quinney College of Law Nika Štravs, Member Lina Kaldana, member Ana Šajn, Member Denis Čurić, Member Maša Kezunovič, member Alenka Obid, Member Andrej Kapun, Member Gal Pastirk, Member CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG 9:20–10:40 Panel Discussion Panel 1: SHAREHOLDER VOTING 12:20–13:20 Moderator/Discussant: Yaron Nili, J.S.D. Lunch & Networking Rado Bohinc CSR as Directors’ Duty? Comparative Reflections and Findings 13:20–14:40 Panel 3: DIGITAL RIGHTS, ESG & SECURITIES ENFORCEMENT Jeff Schwartz: Moderator/Discussant: Rui Dias Can Shareholders Vote their Values? Alessio Bartolacelli: Jill Fisch: Guess Who’s Coming to Dinner? Instruments to Internalize the Stakeholders Corporate Political Disclosure and Shareholder Voting in the Companies: A European View” Christina Sautter: Rado Bohinc: Corporate Disenfranchisement Legal Aspects of Digitalisation Panel Discussion Urška Velikonja: The Point of Jarkesy 10:40–11:00 Panel Discussion Coffee break & networking 14:40–15:00 11:00–12:20 3rd Scientific Conference conclusions Panel 2: CORPORATE GOVERNANCE Discussion with Participants, Feedforward, Conclusions of the conference Moderator/Discussant: Jeff Schwartz Moderators: Jeff Schwartz, Anita Hrast Kobi Kastiel and Yaron Nili: Opting Out of Court? Reputation and Informal Norms in Private Equity Sergio Alberto Gramitto Ricci The Shareholder Democracy Lie Jerneja Prostor : Business Decisions by Artificial Intelligence (Dušan Jovanovič: Supervisory Body – Quo Vadis?, abstract without presentation) CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG PHOTOGALLERY (photo by Tomaž Primožič) CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG ABSTRACTS CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CSR AS DIRECTORS’ DUTY? COMPARATIVE REFLECTIONS AND FINDINGS Rado BOHINC1 ABSTRACT This article examines whether corporate social responsibility (CSR) and sustainability obligations are part of directors’ fiduciary duties. Using a com- parative legal approach, it analyses EU, UK, French and German corporate law frameworks. It focuses particularly on the EU Corporate Sustainability Due Diligence Directive (CSDDD) as a landmark regulatory development. Panel The study explores the duty of loyalty, duty of care, and the duty to promote 1: the success of the company in the context of sustainability, risk management, SHAREHOLDER VOTING and stakeholder engagement. It argues that CSR is increasingly becoming legally embedded in directors’ duties, marking a convergence of corporate governance theory and legal practice. Keywords: CSR, corporate governance, fiduciary duty, sustainability, di- rector Introduction Corporate governance is undergoing a profound transformation as sus- tainability and corporate social responsibility (CSR) reshapes the traditional shareholder-centric model. Directors are increasingly expected to consider environmental, social, and governance (ESG) factors in strategic decision- making. This article investigates whether CSR obligations are or should be considered part of directors’ fiduciary duties. The focus is on comparative legal perspectives, with emphasis on EU developments, including the Corpo- rate Sustainability Due Diligence Directive (CSDDD). The analysis addresses the duties of loyalty, care, and to promote the success of the company, exam- ining their scope in the context of sustainability and risk management. It also 1 Euro-Mediterranean University (EMUNI), Piran CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG considers stakeholder engagement as part of directors’ duties and explores Directors’ Fiduciary Duties and Sustainability how emerging jurisprudence and regulation are shaping these obligations. Fiduciary duties traditionally include the duty of loyalty, the duty of care, The contemporary evolution of corporate governance increasingly chal- and, in some jurisdictions, the duty to promote the success of the company. lenges the traditional shareholder-centric model of the corporation. The In the sustainability era, these duties are being reinterpreted in light of envi- integration of corporate social responsibility (CSR) and sustainability into ronmental, social, and governance (ESG) challenges. the legal duties of directors reflects a paradigm shift in corporate law the- ory—from maximizing shareholder value to ensuring long-term corporate sustainability and social legitimacy. Duty of Loyalty This paper explores whether, and to what extent, directors’ fiduciary du- The duty of loyalty requires directors to act in the best interests of the ties under corporate law encompass sustainability obligations. It examines company. Historically, this meant prioritizing shareholders. However, con- this question through comparative analysis of European, UK, and interna- temporary interpretations recognize that long-term company interests are tional developments, with a focus on recent EU legislation, particularly the intertwined with environmental, social, and governance outcomes. OECD Corporate Sustainability Due Diligence Directive (CSDDD). Guidelines (2023) and the UN Guiding Principles on Business and Human The central question is: as part of their loyalty obligation. Thus, sustainability considerations may be To what extent does the law transform CSR and Rights (2011) suggest that directors must consider wider societal impacts sustainability into binding directors’ duties? legally within the scope of loyalty duties. The duty to act in the best interests of the company, traditionally has been Theoretical Framework interpreted as the interests of shareholders collectively. However, as Hans- The theoretical debate on CSR and directors’ duties draws on both cor- mann and Kraakman (2001) observed, the “end of history” for corporate porate law and management literature. Stakeholder theory, as articulated law—its convergence on shareholder primacy—was premature. by Freeman (1984), emphasizes that corporations have responsibilities not Increasingly, the “interests of the company” are being understood to in- only to shareholders but to a broader set of stakeholders including employ- clude long-term sustainability and the company’s purpose beyond immedi- ees, customers, suppliers, and communities. ate profits. This approach aligns with the principle articulated by the OECD mization; however, recent scholarship, including Stout (2012) and Keay Fiduciary duty theory traditionally prioritizes shareholder wealth maxi- Guidelines for Multinational Enterprises (2023) and the UN Guiding Princi- ples on Business and Human Rights (2011), which emphasize that compa- nies have responsibilities that extend beyond their shareholders to society (2010), proposes the notion of ‘enlightened shareholder value’, where long- and the environment. term corporate success is inherently linked to sustainable practices. Thus, the key question emerges: Does acting in the company’s best interests in- This theoretical lens provides a basis for understanding why directors’ clude ensuring the sustainability of its operations, stakeholders, and ecological legal duties may extend to sustainability considerations. Risk management context? If so, sustainability is not merely a policy choice—it becomes part of theory also supports this approach: environmental and social risks can gen- the loyalty duty itself. erate material financial consequences, making their management part of the directors’ duty of care. Finally, corporate purpose literature highlights that companies are social institutions whose responsibilities include creating value for society while pursuing economic success CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Duty of Care – the impact of operations on the community and the environment, and The duty of care obliges directors to make informed, prudent decisions. – the company’s reputation and standards of conduct. ESG-related risks—including climate change, biodiversity loss, and human This provision integrates the logic of CSR directly into company law, blur- rights issues—can pose significant financial and reputational threats. There- ring the line between voluntary responsibility and legal obligation. It dem- fore, directors are expected to integrate these risks into strategic and opera- onstrates a model of “enlightened shareholder value”—a balance between tional decision-making. profit and purpose, as theorized by Keay (2010) and Stout (2012). To make informed, prudent, and diligent decisions in the sustainability context requires directors to understand and manage sustainability-related Risk Management, Strategy, and Oversight risks—including climate risks, biodiversity loss, human rights violations, and supply chain vulnerabilities. Boards must integrate sustainability into enterprise risk management frameworks, corporate strategy, As the Task Force on Climate-related Financial Disclosures (TCFD) and In-ternational Sustainability Standards Board (ISSB) frameworks demonstrate, capital allocation, and research and development. Directors are increas-ingly expected to align executive incentives with sustainability performance, failure to consider sustainability risks can lead to material financial harm reflecting fiduciary duties in the modern ESG context. Failure to do so may and, therefore, to breaches of the duty of care. result in both material financial loss and potential liability under evolving European jurisprudence is increasingly recognizing this link. In Milieu-corporate law. defensie v. Shell (The Hague District Court, 2021), directors’ failure to adopt Sustainability is no longer an adjunct to corporate strategy—it is a core adequate climate policies was argued to breach their duty of care to the com-governance responsibility. Boards are expected to identify and integrate pany and society. This signals an emerging judicial understanding of sustain-sustainability-related risks (climate change, human rights, regulatory shifts) ability as a component of due diligence and risk oversight. into enterprise risk management (ERM) frameworks. Duty to Promote the Success of the Company This expectation extends beyond voluntary ESG reporting. It forms part of the directors’ obligation to ensure resilience and long-term value creation. Eccles and Klimenko (2019) UK Companies Act 2006, Section 172, explicitly requires directors to con- As note, investors increasingly expect boards to sider long-term consequences, employee and community interests, and en- demonstrate how sustainability shapes strategy, capital allocation, and R&D objectives are increasingly embedded in statutory directors’ duties, aligning Furthermore, executive remuneration and incentives are now commonly with the ‘enlightened shareholder value’ concept vironmental impact. This provision exemplifies how CSR and sustainability priorities. linked to sustainability performance indicators, reinforcing the idea that sus- The UK Companies Act 2006, Section 172, provides perhaps the most tainability is not only an ethical imperative but a strategic fiduciary concern. explicit statutory formulation of sustainability-oriented governance. It re- quires directors to act in a way they “consider, in good faith, would promote the success of the company for the benefit of its members as a whole,” and in Stakeholder Engagement as a Governance Duty doing so, to have regard to: Modern corporate law and governance practice recognize that directors – the long-term consequences of decisions, must engage with a broad set of stakeholders. This includes employees, cus- – the interests of employees, suppliers, and customers, tomers, investors, regulators, and local communities. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Understanding stakeholder expectations on diversity, climate, human 2026, with application staggered across company size and sector. Directors rights, and supply chain ethics is becoming an implicit legal expectation. EU must integrate sustainability into strategy, risk management, and corporate directives, such as the CSRD, operationalize these duties, requiring compa- oversight, making CSR legally enforceable. nies to account for stakeholder interests in corporate reporting and strategy. However, the Stop-the-Clock Directive (Directive (EU) 2025/794, OJ L 794, Modern corporate law recognizes that sustainable success depends on 16 April 2025) postpones certain CSRD and CSDDD application deadlines trust and engagement with broader stakeholders—employees, consumers, by one to two years, providing legal certainty and alignment with national suppliers, regulators, and communities. implementation timelines. The broader Omnibus package, currently under tions on diversity, human rights, climate impact, and ethical conduct. The EU Directors are therefore expected to understand stakeholder expecta- negotiation, aims to amend thresholds, ESRS reporting requirements, and transposition schedules but is not yet adopted. Corporate Sustainability Reporting Directive (CSRD) requires precisely this These provisions effectively transform sustainability oversight from a Sjåfjell and Rich form of stakeholder-based materiality assessment. voluntary CSR measure into a legal fiduciary obligation. As - ardson (2015) have argued, this marks a turning point in European corpo- The question is whether stakeholder engagement is a legal duty or a soft rate law—a move from “corporate social responsibility” to “corporate social obligation. Comparative developments suggest a gradual move toward the accountability.” former: while EU company law still prioritizes the “interests of the compa- ny,” the interpretation of that interest is expanding to include stakeholder well-being as a precondition for corporate continuity. Comparative Perspectives Comparative analysis highlights converging trends across jurisdictions. Legal Regulation in the European Union These examples demonstrate a convergence legally embedding sustainabil- sustainability into directors ‘duties. The Corporate Sustainability Due Dili-The EU has introduced a regulatory framework that increasingly embeds ity in directors’ fiduciary duties. While the EU approach is regulatory and systemic, other jurisdictions show complementary trends: Companies Act 2006 gence Directive (CSDDD), adopted in 2024 and effective from 2026/2027 In the United Kingdom, the sets the legislative foun- (Directive (EU) 2024/1760, OJ L 1760, 5 July 2024), mandates human rights dation for stakeholder-oriented governance. and environmental due diligence for large companies. Directors are legally In Germany: Gesetz über die unternehmerischen Sorgfaltspflichten in obliged to oversee and implement due diligence measures, integrate sus- Lieferketten (LkSG) — adopted 16 July 2021, entered into force 1 Janu- tainability into corporate strategy, and manage related risks. This effectively ary 2023 (initially for companies with ≥3 000 employees) and extended in transforms CSR from voluntary guidance to a binding legal duty, consistent 2024 to companies with ≥1 000 employees. Also the AktG §93 on the duty of with fiduciary obligations. care is being interpreted in light of sustainability risk management, aligning CSDDD, adopted in 2024 represents a significant step in integrating sus- with EU due diligence principles. tainability into directors’ duties. Article 25 introduces explicit duties for In France, the Loi PACTE (n°2019486, 22 May 2019, JORF n°0119, directors to consider the consequences of their decisions on human rights, 23 May 2019) allows companies to define a raison d’être —a social or envi- climate change, and environmental sustainability. Article 26 requires direc- ronmental purpose that informs corporate decisions and obliges boards to tors to oversee due diligence implementation and to integrate it into corpo- integrate social/environmental objectives into strategy. Amendments to the rate strategy. The CSDDD, mandates human rights and environmental due Civil Code (Art. 1833) and Commercial Code reinforce board accountability diligence for large companies. Member States must transpose it by 26 July CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG for corporate purpose. Boards are expected to consider ESG factors in risk EU—demonstrates that sustainability has entered the core of fiduciary gov- oversight, strategy, and executive compensation, aligning with the EU CSDDD ernance. framework. Directors today are expected to ensure that corporate strategies promote Outside Europe, Canada’s Supreme Court (BCE Inc. v. 1976 Debenture- long-term resilience, environmental stewardship, and respect for human holders, 2008) and India’s Companies Act (2013) also recognize that direc- rights. Failure to do so may increasingly expose them not only to reputa- tors must consider stakeholder and community interests in decision-making. tional risks, but also to legal liability under corporate and due diligence laws. The EU CSDDD, the Stop-the-Clock directive, and national frameworks As Lynn Stout reminded us, “corporations are social institutions, not in Germany and France demonstrate a clear trend: directors’ fiduciary du- merely private property.” The transformation of directors’ duties to include ties are expanding beyond shareholder wealth to include sustainability, hu- sustainability is a necessary step in aligning corporate governance with this man rights, and ESG considerations. These obligations now span strategy, broader societal role. risk management, capital allocation, and stakeholder engagement, reflecting a convergence of corporate law, governance theory, and sustainable busi- ness practice. Together, these developments suggest a convergence toward References (selected) sustainability-oriented fiduciary duties, albeit with national variations in en- Hansmann, H. & Kraakman, R. (2001). The End of History for Corporate Law? forcement and interpretation. Georgetown Law Journal, 89(2). Keay, A. (2010). The Enlightened Shareholder Value Principle and Corporate Gov- Conclusion: From CSR to Legally Embedded Sustainability ernance. Routledge. Stout, L. (2012). The Shareholder Value Myth. Berrett-Koehler. rectors’ duties. The combination of EU directives, pending Omnibus amend- Sjåfjell, B. & Richardson, B. (2015). Company Law and Sustainability: Legal Barri- ers and Opportunities CSR and sustainability are no longer peripheral; they are central to di- ments, and national legislation in Germany and France shows that . Cambridge University Press. legal en-forcement of sustainability obligations is now a core aspect of fiduciary OECD (2023). Guidelines for Multinational Enterprises on Responsible Business duties. Directors must integrate ESG considerations into decision-making to Conduct. ensure long-term corporate success aligned with societal and environmental Directive (EU) 2024/1760 of the European Parliament and of the Council of responsibility. 13 June 2024 on corporate sustainability due diligence, OJ L 1760, 5 July 2024. CSR and sustainability are no longer merely ethical or strategic consid- Directive (EU) 2025/794 of the European Parliament and of the Council of erations; they are increasingly integral to directors’ fiduciary duties. The EU 14 April 2025 (“Stop-the-Clock”), OJ L 794, 16 April 2025.UN (2011). Guiding Prin-CSDDD represents a landmark regulatory shift, making sustainability over- ciples on Business and Human Rights. sights a legally binding obligation. Directors must now integrate ESG consid- Germany: Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten erations into corporate strategy, risk management, and stakeholder engage- (LkSG) — adopted 16 July 2021, entered into force 1 January 2023 sustainable business practice, ensuring that companies pursue long-term France: Loi n° 2019-486 du 22 mai 2019 relative à la croissance et la transforma- tion des entreprises (PACTE) — introduced corporate “raison d’être”, board obliga- ment. This reflects a convergence of corporate law, governance theory, and success while respecting social and environmental responsibilities. tions to consider social/environmental issues; amends Civil Code Article 1833 and The debate on whether CSR constitutes a directors’ duty is no longer Commercial Code. purely theoretical. The legal and regulatory evolution—especially in the CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CAN SHAREHOLDERS VOTE THEIR VALUES? CORPORATE POLITICAL DISCLOSURE AND SHAREHOLDER VOTING Jill FISCH1 & Jeff SCHWARTZ2 Jill E. FISCH3 & Adriana Z. ROBERTSON4 Corporate decision-making is suffused with political and moral considera- tions, from existential questions about the propriety of producing potentially We combine empirical analysis and qualitative research to offer new in- harmful products to routine packaging choices. Polarization and heightened sights into the shareholder voting process. Our research focuses on share- scrutiny of issues such as diversity, climate change, and corporate philan- holder proposals requesting increased disclosure of corporate political ac- thropy have sharpened focus on the role of values in business. Under the tivity. These proposals are notable for three reasons. First, they are among director-primacy model of corporate law, boards of directors retain broad the most enduring categories of shareholder proposals and have consist- discretion over these matters, constrained only by the duty to act in share- ently received substantial amounts of support from shareholders. Second, holders’ interests and protected by the business judgment rule if they act in because political disclosure proposals tend to be relatively low salience, they good faith. Yet this discretion raises a fundamental question: should direc- shed light on the dynamics of the proposal process when it is least likely to tors’ choices reflect shareholder values? attract outside attention. Finally, the Supreme Court in Citizens United placed cietal norms, bolster managerial legitimacy, and reduce capricious shifts in We argue that shareholder input could align corporate values with so- corporate political influence squarely in the realm of corporate governance. Studying political disclosure proposals sheds light on the effectiveness of this mechanism in providing transparency about corporate political activity. corporate stances, ultimately resounding to the financial benefit of the cor- poration, but that shareholders are today stymied in providing such input. We analyze the basis on which issuers are targeted with political disclo- We identify how institutional intermediation obscures shareholder values, sure proposals, the result of such targeting, and the targeted firms’ subse- as does the structure of corporate governance, and recommend ways to pro- quent disclosure practices. In sum, we find that a diverse array of investors vide shareholders with greater say. sponsored the political disclosure proposals in our sample (2015-2023), the proposals tended to be relatively successful, and disclosures tended to im- prove in subsequent years. On average, both the targeting and voting appear to reflect existing disclosure practices and political contributions rather than firm performance. We also uncover important institutional details of the shareholder pro- posal process. Roughly a third of political disclosure proposals are settled and withdrawn, meaning that studies that rely exclusively on voting results convey an incomplete picture. At the same time, the absence of an authori- tative source of all shareholder proposals complicates the analysis. We also 1 Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Carey Law 3 Jill E. Fisch is the Saul A. Fox Distinguished Professor of Business Law at the University of School, Fellow, European Corporate Governance Institute. Pennsylvania Carey Law School and is an ECGI Fellow. 2 Hugh B. Brown Presidential Professor of Law, University of Utah, S.J. Quinney College of 4 Adriana Z. Roberston is Donald N. Pritzker Professor of Business Law at the University of Law. Chicago Law School and is an ECGI Research Member. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG document the involvement of a critical governance entrepreneur – the Cent- CORPORATE DISENFRANCHISEMENT er for Political Accountability – and demonstrate its central role in the sub- mission and apparent success of political disclosure proposals. [We also study voting support across various institutional investors. Here Sergio Alberto GRAMITO RICCI1, Christina M. SAUTTER we uncover high levels of investor engagement but levels of support that 2 vary across investors and investor types. Even among those investors who support such proposals, we find strikingly low correlation among individual voting decisions. We further identify factors that appear to influence specific This article examines the fundamental failures of collective decision- investor voting decisions.] making in corporate shareholder meetings by drawing historical parallels to ancient Athenian democracy. Despite formal equality in participatory rights, both the Athenian ekklesia and modern shareholder meetings are dominat- ed by elite voices while effectively excluding everyday participants, reveal- ing persistent patterns of elite dominance across millennia. Contemporary corporate governance mirrors ancient democratic limitations. Just as only skilled orators with sufficient resources could meaningfully participate in Athenian assemblies despite theoretical isegoria (equal speech rights), to- day’s shareholder meetings are controlled by institutional investors, activ- ist hedge funds, and the “Big Three” asset managers, while individual retail shareholders remain marginalized despite formal voting rights. Central to this analysis is the U.S. proxy system’s evolution from its 1930s origins, when it was designed to address management manipulation of share- holder voting, to its current form that paradoxically perpetuates sharehold- er disenfranchisement. Complex proxy machinery creates insurmountable barriers for retail investors: electronic delivery systems that reduce voting participation, confusing proxy statements requiring specialized knowledge to navigate, and inadequate notification procedures that leave shareholders uninformed about their rights. A critical examination of the shareholder proposal system reveals how Rule 14a-8 has become increasingly restrictive over eight decades. While initially allowing any qualified shareholder to submit proposals regardless of ownership size, amendments introduced escalating ownership require- ments culminating in 2020’s three-tier system requiring between $2,000 1 Associate Professor of Law, Hofstra University Maurice A. Deane School of Law; Co-Founder, President, & Board Director, Center for Retail Investors & Corporate Inclusion. 2 Professor of Law, Southern Methodist University (SMU) Dedman School of Law; Co-Found- er, Secretary, & Board Director, Center for Retail Investors & Corporate Inclusion. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG and $25,000 in holdings with extended holding periods, effectively exclude smaller retail investors from proposing governance reforms. We contrast this exclusionary system against historical examples of independent share- holders like the Gilbert brothers and Wilma Soss, who used wealth, educa- tion, and persistence to challenge corporate management in mid-20th cen- tury shareholder meetings. Their activism led to governance improvements now considered standard practice, yet today’s proxy system makes such in- dividual advocacy nearly impossible. Finally, we use virtual shareholder meetings as a case study in technol- ogy’s failed promise to democratize corporate governance, showing how companies have used virtual formats to further limit rather than expand shareholder engagement. The proxy system functions as a “proxy card in a vacuum,” representing a fundamental departure from shareholder participa- tion toward a model favoring concentrated wealth over distributed owner- Panel 2: ship. CORPORATE GOVERNANCE CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG OPTING OUT OF COURT? REPUTATION AND INFORMAL NORMS plications of this non-litigious environment for investor protection, market IN PRIVATE EQUITY efficiency, and regulatory oversight, questioning whether reliance on reputa- tion and extralegal mechanisms is sustainable in the face of growing indus- try complexity. Kobi KASTIEL1, Yaron NILI2 Private equity, an industry characterized by high-stake investments and complex contractual arrangements, operates almost entirely outside of courts. Despite the substantial financial stakes involved—billions of dollars locked in for years—and the potential for fiduciary conflicts, litigation be- tween limited partners (LPs) and general partners (GPs) who manage the investment is exceptionally rare. In stark contrast to public markets, where shareholder litigation plays a prominent role in deterring misconduct and shaping corporate norms, the private equity world is largely defined by its absence. The puzzle, then, is this: In an industry where fiduciary breaches or misaligned incentives are not uncommon, why do LPs almost never turn to courts to enforce their rights? Drawing on proprietary documents, public records, and qualitative interviews with market players, this article provides the first account of the rarity of litigation in private equity and the ecosys- tem of extralegal relations and informal norms that serve as a substitute for formal legal channels. This article makes three contributions to the literature on private equity. First, using hand-collected data, the article provides the first empirical ac- count of the non-litigious private equity landscape and its underlying causes. It also highlights how opting out of court is a result of reputational concerns, contractual barriers, and institutional disincentives. Second, the article in- vestigates how private equity resolves disputes and enforces norms without recourse to courts. Based on a unique set of interviews with LPs, GPs, and legal advisors, this article sheds light on the alternative mechanisms that dominate the private equity landscape. Third, the article explores the im- 1 Professor of Law, Tel Aviv University; Senior Research Fellow, Harvard Law School; Re- search Member, the European Corporate Governance Institute; Affiliated Fellow, Stigler Cent- er, Chicago Business School. 2 Professor of Law, Duke University School of Law; Research Member, the European Corpo- rate Governance Institute. We would like to thank [to be added]. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG THE SHAREHOLDER DEMOCRACY LIE The article analyzes the so-called “de-retailization” of share ownership, showing how institutional investors now control approximately 70% of U.S. public company shares. The “Big Three” asset managers—BlackRock, Van- Sergio Alberto GRAMITO RICCI1, guard, and State Street—have become the largest shareholders in nearly all Daniel J.H. GREENWOOD2, S&P 500 companies, wielding unprecedented voting power through small, Christina M. SAUTTER3 demographically homogeneous stewardship teams. Most critically, proxy advisory firms like ISS and Glass Lewis have effectively captured corporate governance by providing voting recommendations to institutional investors. This article systematically debunks the myth of “shareholder democracy” These firms exercise consequential influence over shareholder votes despite by demonstrating that neither corporate governance structures nor share having no financial stake in the companies they evaluate, effectively trans- ownership patterns in America resemble democratic principles. The term ferring control from shareholders to entities with no skin in the game and “shareholder democracy,” first popularized in the 1920s by Wall Street firms potential conflicts of interest. and the NYSE to attract retail investors while resisting government regula- “Shareholder democracy” constitutes dangerous rhetoric that obscures tion, fundamentally misrepresents the mechanics of corporate power and fundamentally undemocratic corporate power structures. This mischarac- control. terization has significant implications beyond corporate law, as corporate Corporations lack basic democratic features such as equal voting rights, power substantially influences political and social institutions. An accurate protections for minority voices, or mechanisms for loyal opposition. Unlike and deep understanding of the dynamics that govern corporate control and political democracies where votes cannot be purchased, corporate govern- ownership and rejecting deceitful rhetoric is essential for meaningful re- ance operates on a one-share-one-vote basis that enables the wealthy to forms that foster transparent and fair corporate laws. buy electoral control. Directors are explicitly prohibited from representing shareholder interests, instead serving as fiduciaries to the corporation itself, while incumbent management can use corporate resources to defend their positions against challengers. A comprehensive analysis of share ownership inequality exposes how centuries of discrimination, including slavery, Jim Crow laws, and employ- ment discrimination, created enduring barriers to stock market participa- tion for minorities and women. The article sheds light on how discrimina- tory employment practices not only excluded minorities from jobs but also from employee stock ownership plans (ESOPs), perpetuating intergenera- tional wealth gaps that persist today; we dub this phenomenon “minorities double jeopardy.” 1 Associate Professor of Law, Hofstra University Maurice A. Deane School of Law; Co-Founder, President, & Board Director, Center for Retail Investors & Corporate Inclusion. 2 Professor of Law, Hofstra University Maurice A. Deane School of Law. 3 Professor of Law, Southern Methodist University (SMU) Dedman School of Law; Co-Found- er, Secretary, & Board Director, Center for Retail Investors & Corporate Inclusion. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG BUSINESS DECISIONS BY ARTIFICIAL INTELLIGENCE tain sectors – such as logistics, marketing, and finance – AI-generated outputs have already proven to be of substantial practical value. As a result, members of corporate governing bodies who disregard the development, implementa- Jerneja PROSTOR1 tion, or outputs of AI systems in relevant decision-making contexts may risk falling short of the standard of care required by law. Corporate directors and officers are generally bound by the duty to act with the care of a reasonably Despite isolated initiatives aimed at integrating artificial intelligence (AI) prudent businessperson, assessed according to objective benchmarks. Ac- into corporate management (or supervisory) bodies, current legal frame- cordingly, if peer companies within a particular industry and of comparable works preclude AI from formally assuming such roles. At present, AI can size have adopted AI systems and derived demonstrable benefits from them, only function as a tool to support the decision-making processes of these a failure by similarly situated firms to consider or utilize such tools could bodies, rather than as an autonomous actor within them. Even if members potentially amount to negligence in fulfilling fiduciary duties. of a corporate governance body consent to incorporate AI-generated out- Should a governing body make a fundamentally flawed business decision put (AI-derived recommendations) into the decision-making process, such due to its failure to consider relevant outputs generated by AI, it may be held output can, at most, function as an assistive tool rather than an autonomous liable for resulting damages on the grounds of inadequate preparation and decision-making entity. Accordingly, the role of AI in company law remains insufficient information. In such cases, the decision-making process may be limited, particularly when contrasted with the more immediate and pressing deemed to have fallen short of the standards of due care. More specifically, legal challenges posed by AI in areas such as intellectual property law, hu- the refusal to engage with or rely upon AI solutions that have demonstrably man rights law, data protection, and health and safety regulation. Nonethe- yielded effective results within a given industry could, under certain circum- less, in the longer term, the continued advancement of AI technologies and stances, justify the removal of a member of the management body for failure its mass use may challenge fundamental assumptions underpinning com- to fulfill their fiduciary responsibilities. pany law, potentially necessitating a reconsideration of core legal principles. Conversely, if a corporate management body relies on AI-generated out- This paper explores the legal implications of business decisions made by puts when making business decisions, such outputs – at best from the per- corporate management bodies with the assistance of AI outputs. It examines spective of AI-developing entities – may be functionally analogous to the the standards by which such decisions should be assessed under existing opinions of retained experts (e.g., chartered business valuators or legal ad- corporate law, particularly with respect to the duty of care. The paper fur- visors) or, in the case of internally developed AI, comparable to input from ther considers the legislative changes that would be required should AI be domain-specific middle management. However, if the AI-generated output granted formal roles within management (or supervisory) bodies. In addi- is manifestly erroneous, or if the management fails to provide the AI system tion, it offers a forward-looking perspective on the possibility of fully auton- (or, analogously, the expert) with all critical and correct facts necessary for omous companies operated exclusively by AI systems, analyzing the poten- an informed assessment, the management remains liable for any damage re- tial impact on the legal relationships between the company, its shareholders, sulting from decisions made based on such incomplete or incorrect informa- creditors, and AI-driven management. Finally, while outlining these develop- tion. It is important to emphasize a key distinction: certified human experts ments, the author expressly states a normative position against the replace- are professionally accountable for their advice, often under the threat of dis- ment of human decision-makers with AI in corporate governance structures. ciplinary measures, including revocation of licensure. In contrast, AI systems Artificial intelligence (AI) systems currently exist at varying stages of de- lack formal accountability structures, and even in the most severe case – e.g., velopment, and their relevance differs significantly across industries. In cer- dissolution of the company offering the AI system – there is no structural 1 University of Maribor, Faculty of Law CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG barrier to the redeployment of the same or similar technology under a new ly if the AI system had been developed internally and appointed to manage- corporate entity. ment functions by the shareholders themselves. In this context, the principle At present, the relevance of AI to company law manifests in two primary of volenti non fit iniuria would apply, as those who voluntarily assume a risk ways. First, where a governing body fails or refuses to develop and utilize AI cannot later claim injury. For interactions with third parties, such a company could be represented by a human proxy or legal representative, while the systems that are already well established and widely adopted within a par- company itself would be treated as operating a high-risk system. As such, it ticular industry, such inaction may constitute negligence under corporate would be subject to enhanced regulatory oversight, including requirements law standards. Second, when a management body does rely on AI-generated related to (strict product) liability, insurance coverage, and the acquisition of outputs in its business decision-making, its conduct should be assessed ac- certification attesting to legal compliance in order to maintain the legitimacy cording to the same legal criteria that would apply if the decision had been of its operations in the legal and economic system. made without the involvement of AI. In other words, the use of AI neither diminishes nor heightens the duty of care; it remains the quality and rea- Although these prospective alternatives may currently appear conceptu- sonableness of the decision-making process that is subject to scrutiny. As a ally remote and impractical, it is likely that some form of experimentation natural person, a member of the management body is legally and ethically will eventually take place, potentially paving the way for their gradual inte- required to exercise the duty of care characteristics of a diligent and prudent gration into corporate governance frameworks. From a normative perspec- manager. This fiduciary obligation entails accountability for decisions and tive, the notion that a member of a governing body could exonerate them- actions undertaken on behalf of the company. Such decisions are typically selves from responsibility on the grounds that an AI system failed to provide assessed under the business judgment rule, which provides a framework for adequate output – analogous, for instance, to relying on a property valuation evaluating managerial conduct based on the reasonableness and informed in the absence of any red flags – challenges established principles of manage- nature of the decision-making process rather than its outcomes. rial accountability. Nonetheless, given the increasing trend of states compet- Looking ahead, there are two conceivable scenarios in which AI might ing to establish attractive legal environments for capital investment, it would be prudent to begin considering the regulatory implications of AI integration driven consultancy service, thereby being appointed as a member of another natural persons to serve as members of management bodies, such develop- ments would require fundamental legislative reform. 2 company’s management body. Under current Slovenian legislation, however, legal entities cannot serve as members of management bodies, implying organization of a corporate structure wherein the company provides an AI- into corporate management. As current Slovenian legislation permits only assume a role within a company’s management body. The first involves the that such an arrangement would necessitate a legislative amendment. The second, more speculative, scenario entails granting AI systems’ legal per- sonality. From a legal-theoretical perspective, there appears to be neither a compelling normative basis nor a practical justification for such a move. AI systems, as company assets, should remain subject to human governance and control, operating in alignment with the directives of the economic own- ers of the firm. In an even more speculative, future-oriented scenario, it is conceivable cases, the company would remain a legal entity with identifiable sharehold- 2 The text was originally translated from Slovenian into English using the DeepL tool and then improved using the ChatGPT-4o (instruction: scientific text suitable for publication in that fully autonomous, AI-managed companies could emerge. Even in such ers, who would bear the consequences of AI’s business decisions – particular- the American scientific journal). The free version was used for both tools. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE SOCIAL RESPONSIBILITY – QUO VADIS? Dušan JOVANOVIČ1, Nikola JOVANOVIĆ2 The article examines the homogenization of information flow in corpo- rate governance and oversight facilitated by modern technologies. The „push & pull“ principle enabled by digital tools significantly impacts decision-mak- ing processes and the accountability of management. It discusses the con- cept of extended management, focusing on the increasing supervisory role of boards and the consequent limitations on the exculpation of management boards. Technological advancements are altering the application of the busi- ness judgment rule, raising questions about its current scope and effective- Panel 3: ness. The analysis includes the decision and practical example in the Luka Koper case, evaluating whether the outcome might have been different if DIGITAL RIGHTS, ESG & these technologies and expanded supervisory mechanisms had been fully SECURITIES ENFORCEMENT implemented. Finally, the article critically examines the future role of super- visory boards in corporate governance. Key Words: digitalization, standardization, CG (Corporate Governance), supervisory role, liability, BJR (Business judgment role), case study 1 Assoc. Prof. Dr., Faculty of Economics and Business, University of Maribor and Faculty of Management, University of Primorska 2 Asist., Institut for economic and corporate governance Maribor and Faculty of Economics and Business, University of Maribor and Faculty of Management, University of Primorska CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG GUESS WHO’S COMING TO DINNER? INSTRUMENTS TO thereby institutionalizing stakeholder engagement within the corporate de- INTERNALIZE THE STAKEHOLDERS IN THE COMPANIES: A cision-making process. EUROPEAN VIEW Ultimately, the study calls for a reconceptualization of shareholder pri- macy—not as a mandate for short-term profit maximization, but as a flexible Alessio BARTOLACELLI sition toward more sustainable corporate practices. By leveraging financial 1 principle that accommodates non-financial objectives and supports the tran- instruments to internalize stakeholder interests, firms can enhance ESG ac- The paper examines the role of corporate finance instruments in em- broader societal goals. 2 countability, foster innovation in governance, and contribute meaningfully to bedding stakeholders (and therefore also) sustainability within corporate governance structures. It argues that sustainability—understood in its full environmental, social, and governance (ESG) dimensions—must be treated as a normative imperative rather than a discretionary strategic choice. The analysis challenges the traditional shareholder primacy paradigm, advocat- ing instead for a governance model that enables stakeholder integration through financial and legal mechanisms. The discussion is grounded in a liberal, contractarian view of the corpo- ration, wherein shareholders retain ultimate authority to define the firm’s purpose and governance structure. Within this framework, stakeholder in- volvement is not imposed externally but emerges from shareholder intent— whether driven by ethical commitments, reputational considerations, or long-term value creation strategies. The paper also considers the practical and legal implications of such arrangements, including the potential for con- flicts, the need for safeguards against greenwashing, and the importance of aligning financial instruments with measurable sustainability outcomes. In light of the fragmented and often insufficient regulatory landscape, particularly at the international level, the author emphasizes the importance of market-based incentives and voluntary best practices. The paper explores how equity instruments (e.g., special share classes), hybrid securities, and sustainability-linked debt instruments can be designed to confer governance rights or influence to stakeholders. These rights may include enhanced in- formation access, voting privileges on ESG matters, or board representation, 1 Assoc. Prof., University of Modena e Reggio Emilia, Department of Law 2 Based on A. , Promoting Sustainability by Means of Corporate Finance Instruments with Influence on Governance: Some Observations, in A. (ed), The Prism of Sustainability. Multi- disciplinary Profiles, Editoriale Scientifica, Naples, 2025, 151-198. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG LEGAL ASPECTS OF DIGITALISATION digital sovereignty. It builds on the EU Charter of Fundamental Rights and guides EU digital policy and legislation. Rado BOHINC • Digital Services Act (DSA, 2022) governs online platforms and in- termediaries, focusing on illegal content, transparency in advertising, disinformation, and user rights such as explanations on content mod- General on social impact of digital transition eration and algorithmic transparency. It aims to protect fundamental Human-centered approach to digital transition aims to human well-be- rights online while ensuring safe and reliable digital services. ing, meaning to develop digital technology towards people, because of their • General Data Protection Regulation (GDPR) (implied from data needs, because of the more efficient, easier and faster performance of vari- protection references) is a foundational EU regulation protecting per- ous tasks, therefore for the benefit of people and not simply because of faster sonal data and privacy, closely linked to digital rights. economic growth and profit. The application of AI as digital tools is espe- cially challenging from the point of view of greater risks to fundamental hu- man rights and sustainable development violations. This is the EU vision, Digital rights and principles (Declaration on digital rights) digitization is closely monitored and comprehensively supported by legal formation , meaning universal access to inclusive technology that upholds regulation and followed by education. however far from being implemented. It is crucial that the rapidly growing 1. Putting people and their rights at the centre of the digital trans- EU rights. Everyone should have access to affordable and high-speed digital AI has a transformative role in the creative industry, offering tools that en- connectivity, be able to acquire the education and skills necessary to enjoy hance, automate, and inspire various creative fields, enhancing and expand- the benefits of digital technology, have fair and just working conditions, have ing the ways in which creators work, allowing creators to automate tasks access to key digital public services. and collaborate in innovative ways. However, it’s crucial that the creative 2. Supporting solidarity and inclusion; universal access to inclusive community, balance between human intuition and AI’s capabilities, ensuring technology that upholds EU rights means that everyone should have access that technology is used responsibly and ethically. The development of digital to affordable and high-speed digital connectivity. be able to acquire the edu-technologies must be human-oriented not just profit driven; the fundamen-cation and skills necessary to enjoy the benefits of digital technology, have tal goal of digital transition cannot be economic effect and profit only, but fair and just working conditions, have access to key digital public services primarily benefits for people, the community and sustainable development. 3. Ensuring freedom of choice online. This includes when interacting with artificial intelligence systems, which should serve as a tool for people, EU legal regulation on digital rights with the ultimate aim to increase human well-being. The EU and Member ing digital rights in the EU, addressing privacy, freedom of expression, plat- line with EU values. form accountability, and user empowerment in the digital space: 4. Fostering participation in the digital public space. Everyone should • The following legal acts form the core regulatory framework safeguard- artificial intelligence systems, which are used in a transparent way and in States notably commit to promote human-centric, trustworthy and ethical European Declaration on Digital Rights and Principles (Declara- have access to a trustworthy, diverse and multilingual online environment tion on digital rights) sets out digital rights grounded in EU values and should know who owns or controls the services they are using. This en- such as freedom of expression, data protection, privacy, inclusion, and courages pluralistic public debate and participation in democracy. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG 5. Increasing safety, security and empowerment of individuals (es- THE POINT OF JARKESY pecially young people), meaning that everyone should have access to safe, secure and privacy-protective digital technologies, products and services. The EU and Member States notably commit to protect the interests of peo- Urška VELIKONJA ple, businesses and public services against cybercrime, and to ensure that everyone has effective control over their personal and non-personal data in line with EU law. The regulation of securities markets in the United States is a creature of 6. Promoting the sustainability of the digital future. While digital administrative law. Surprisingly, it has also become a vehicle for changing technologies offer many solutions for climate change, we must ensure they administrative law. Jarkesy v. the Securities and Exchange Commission, was do not contribute to the problem themselves. Digital products and services a blockbuster case by the U.S. Supreme Court in June 2024, generated a lot should be designed, produced, and disposed of in a sustainable way. of attention and consternation among those whose work is affected by the federal government. And yet, for securities lawyers, Jarkesy was beside the point by the time it was decided, a waste of judicial resources and newsprint. The SEC stopped bringing enforcement actions before administrative law judges that work for the SEC after Lucia in 2018; it has sued them in federal district court, like it used to before Dodd-Frank expanded ALJ jurisdiction. The last initial decision by an ALJ was issued in May 2023. So what was the point of Jarkesy if it did not change SEC enforcement? Congress has revisited securities laws since 2018, so it could have amended the jurisdictional provision but did not. Perhaps the case was about right to a jury, which was the basis for the Supreme Court’s decision to bar litigation of fraud cases before ALJs. But as is widely known, very few cases make it to a jury, even for defendants set on litigating: summary judgment disposes of all but a small share of cases. Jarkesy was never about the SEC, securities laws or juries. Jarkesy, Lucia, Kokesh, etc., were useful vehicles to advance conservative causes and reduce the power and size of the administrative state using Article II appointments and removal challenges, equal protection, and now the Seventh Amendment. If that’s right, nondelegation doctrine and perhaps even the First Amend- ment will soon be revived as mechanisms to limit the administrative state, possibly in cases originally brought as SEC enforcement actions. The SEC was not the only agency that conservatives re-purposed as a ve- hicle to advance their agenda: the CFPB was also thus used. But the CFPB is a post-Financial Crisis agency with novel features, while the SEC is approach- ing its 100th birthday. My contention in this paper is that the SEC is attrac- CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG tive for a number of reasons: (1) over the decades, much of SEC enforcement was governed by the common law of securities, mostly supported by courts exercising equitable jurisdiction, not statutes; (2) it’s work is important but not so important that it would upend the lives of many; (3) defendants who push the administrative law envelope are not large financial institutions but rather small-time and ambitious financiers who have nothing to lose, while the victims of securities fraud are not particularly sympathetic; and (4) sur- prisingly effective albeit misleading reporting by the Wall Street Journal and the NYT. ADDITIONAL PAPER CONTRIBUTIONS FROM PARTICIPANTS CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG THE INNOVATION IN THE CANADIAN EDUCATIONAL According to Reinisto (2003), not only economic indicators influence INSTITUTION AND CULTURAL DIFFERENCES IN MANAGERIAL competitiveness in cities but also the satisfaction and quality of life of their APPROACH – UNIVERSITY OF WATERLOO, CANADA inhabitants and entrepreneurs living in the city. Marica MAZUREK and fulfill the criteria of the ethical approach to development. Even partner- 1 ships are more open to common collaboration and trust if the partners in Soft factors are also crucial for image, reputation, and competitiveness the territory achieve a good reputation and image. This has been confirmed ABSTRACT by several authors, as for instance Kotler (2002b), and this especially under- cesses depending on the environment, country, and culture. Some generic The innovation has generally specific rules in managerial decision pro- lines the importance of co-operation of businesses and government entities in destinations, where the question of image and reputation is crucial. rules are valid in all cultures and environments, but several specific rules are more typical for countries with different cultures, for instance for the multicultural countries like Canada. The cohabitation of these three aspects 2 Place branding and partnerships, Triple Helix model (innovation, digitization, and sustainability) will be declared as a fact in the In the concept of place branding is crucial to mention also the importance competitive landscape. A case study approach was used with an emphasis on of partnerships among the partners in a destination. This idea was support- the new system of processes in educational institution of Waterloo, Ontario, ed by Go and Govers (2009). The growing importance of partnerships im- Canada. Cohesion between the purpose of this study and practice could be proves the competitiveness of destinations. explained as a need to see educational institutions as an important factor The Triple Helix model means a partnership among the partners in the of innovation, economic development, and cultural diversity. Based on this city, and especially the most important partner, besides the public sector case, several cities might be influenced and willing to follow a journey of Wa- and the entrepreneurship environment, is the existence of a competitive terloo-Kitchener Technological Triangle and Canada generally by respecting university in a city. This means a real knowledge base for increasing the the 3T values – talent, tolerance and transparency. city’s economic potential, and the idea was also supported by Cai (2013). Key words: Innovation, Process Innovation, Culture, Multiculturalism, Etzkowitz and Leydesdorff (2000, 2011), Etzkowitz and Zhou (2007) sup- Tolerance, Governance ported the idea of co-operation of partners in destinations by the creation of strategic alliances at the universities with partners in the city. Lewis (2003) 1 man (1995) in his work “New Economic Geography” and Porter (1995) in his Introduction confirmed these ideas in his work “Theory of Growth,” as did authors Krug- A territory is a place where economic and social processes transform. The work “Competitive Advantage.” city applying a modern strategic approach to marketing and planning with These authors underlined in their academic discourse the importance of an innovative goal should also be concerned by the modern approach to gov- support of educational activities in destinations, the creation of alliances and erning a territory (a city). The concept of Triple Helix means closer coopera- the impact on the quality of educational institutions (especially universities). tion and partnerships among the partners, as are, for instance, the universi- This means a rapid growth of the knowledge potential in a city, the enlarge- ties and the other representatives of the public and private sectors in a city. ment of mutually beneficial bases, and the forming of clusters. This inno- vation based on institutional collaboration in cities has been discussed by 1 PhD., Žilina University in Žilina, Univerzitná 8215, 010 26 Žilina, Slovakia, e-mail: mari- Hjalager (2002) and Morschett et al. (2009). The following amended scheme ca0011@yahoo.ca CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG presents some of the ideas of Morschett et al. dealing with the creation of There is a visible switch in the approach to marketing in destinations knowledge infrastructure in cities. from classical marketing to place branding, driven by the ideas of partner- ships and value creation with customers. It supports the continual switch from the Chicago School to Neoliberalism. The authors, Lusch and Webster (2011), depicted in the following amended scheme the development dis- cussed above. Table 1: Marketing and the change of value for the consumer Creation of value Consumer focused Value with the User Value marketing consumer Source of value Value in exchange Use of a value Meaning of value Technical equipment Base of concept Organization Partnerships Aim The property of value Profit Partners and their Scheme 1: Infrastructure of co-operation at universities. Source: amendment based on Mor- co-owners schett et al. (2009). Value for customers Goal Satisfaction of needs Value creation Financial flow of customers ademic institution but is oriented on entrepreneurship activities, and this In this scheme is crucial to the idea that the university is not only an ac- Financial return of Financial meaning Profit Customers service investments means using a more interactive and co-operative approach. The formerly used Purpose of Satisfaction of needs Value creation Knowledge marketing of customers linear model has been replaced by the following innovative interactive model as has been drawn and amended by the authors, Rothwell and Zegveld (1985). Information about Sources Natural Knowledge customers concepts centralization, implementation, Customers´ demand competences control Main managerial Analyzing, planning, Specialization, Educational spreading Reaction to demand Companies Marketing unions Rights of humans Private companies, Ecology Management, Planning Source: Amended upon Lusch and Webster (2011), Marketing’s Changing Contribution to Value, Journal of Macromarketing, 31(2) 129-134. Scheme 2: The Model of Innovation based on the interactive relationship in education. Source: amended and based on Rothwell and Zegveld (1985). CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Ashworth and Kavaratzis (2008) discussed in their work the importance The authors Vargo and Lusch (2006) discussed in their work that “the cli- of collaboration in cities and the importance of co-creation. Similarly, the ent is always a value generator” and these ideas were supported also by the authors, Kotler (2002a), Ashworth and Voogd (1990), Rainisto (2001and authors Prahalad and Ramaswarny (2000, 2004). For this reason, it is crucial Hankinson (2001, 2004, 2005) agreed with this opinion. Kotler and Gertner to take into account governance and its role, partnerships, and the meaning (2002), confirmed the importance of cooperation for a community and the of value creation in cities for competitiveness improvement. According to meaning of trust and ethics for the partnership creation. Asplund (1993), the above statement, Boisen (2007), Baarn, and Daniels (1995) discussed in Crouch and Ritchie (2003,) similarly to Kotler, supported the idea of growing their work that the traditional approach to marketing can be joined with the importance of sustainability, improved life quality, and stronger support for neoliberal approach, which includes crucial concepts such as governance, such factors as education and culture in territorial development strategies. partnership creation (collaborative governance), and co-creation. This type Sundbo (2008) underlined the importance of psychographic factors in of city governance is called participatory governance. One of the trends that have been proposed recently in city development strategies is the creation management to marketing means a discourse based on Vargo and Lusch of smart cities and creative clusters. Some of these concepts have been dis- marketing and their growing impact. The continual change from marketing (2004), Lusch (2007) the authors of a New Dominant Logic. These ap- cussed by academics as Buhalis (2014). proaches promote such ideas as the value of services, exchange processes, and connections as partnerships. The concept of partnerships has also been described in Poon’s model of competitiveness. For this reason, cities have to be focused on value creation with their customers, e.g., inhabitants and entrepreneurs. The following scheme depicts the progress in marketing development over a 60-year pe- riod, as presented by Lusch et al. (2007) after amendments. Scheme 4: Smart city. Source: Amended upon Buhalis (2014). Scheme 3: Marketing ideas and its development. Source: amended upon Lusch et. al. (2007). The authors, such as Anthopouls et al. (2011), Carvalho et al. (2015), Hol- lands (2015), Kitchin (2015), Nam et al. (2011), Shelton (2015), Suzuki et al. (2013), Suzuki (2017), also discussed the idea of smart cities and this idea has been depicted in the following scheme: CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Co-creation, customer-centric marketing, and the Triple Helix Model are approaches to successful development in cities and in marketing strategies. Canada, with its Technological Triangle of Kitchener-Waterloo-Guelph Can- ada became a suitable place for a description of a case study because it is a country with excellent results in competitiveness, and it also means com- petitiveness in the creation of innovative centers of excellence at universities based on the concept of Triple Helix. Innovation and sustainability are also driving forces for this country, and the University of Waterloo and the cities Scheme 5: Components of smart city. Source: Amended and based on of Stratford and Kitchener are good examples of the innovativeness based on www.smart-cities.eu , digitalization in service sector (education). 2016. City innovation means a mutual co-existence of trends in technical de- 3 Innovation, Competitiveness and Knowledge velopment with an ethical approach and social rules. This means that co- There exists mutual connectivity among knowledge, innovation and com- creation principles and consumer-centric marketing are good examples of petitiveness leading to the creation of knowledge economy. Competitiveness this approach. The following scheme, which was based on the work of Len- and innovation are inextricably linked, with innovation serving as the back- del (2009) and slightly amended, contains the concept of consumer-centric bone of destination competitiveness. In today’s pressured global economy, marketing. more competitive dynamics and need for innovation are rising. Drucker (1993) and Metcalfe (2005) admitted in their work the importance of knowl- edge and knowledge economy for innovation. Cooper (2005) and Malthora (2002) underlined the importance of tacit knowledge transfer for the inno- vation especially due to the inability to transfer or copy this knowledge so easily. This creates the competitive advantage for specific places, where this knowledge is originated. Competitiveness and knowledge are interrelated and innovation means knowledge transfer. Innovation and changes accompanying innovation processes have been discussed by the authors as Hoelzl et al. (2005) and Slappendel (1996). Fig- ure 2 showed the differences between the revolutionary, incremental, and architectural innovations and explained the content of the transilience mod- el as has been described by Abernathy and Clark (1998). Aside from current technologies, education belongs to the crucial sources of innovation. It entails the establishment of educational, knowledge, spin- offs, wisdom clusters, and modern businesses, as well as places for the ap- Scheme 6 : 6 Concept of customer-centric marketing - Stars model amended for the territo plication of new technologies and environmental protection, innovations in - rial purposes. Source: amended upon Lendel, 2009. social environment and the provision of the sustainable places with a high quality of life and focused on wellbeing and happiness of their inhabitants. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG “Knowledge is the only relevant resource today,” according to Drucker (1993, p. 38); nevertheless, this may be a little deceptive, because knowledge is not only about having it, but also about disseminating and applying it in companies, regions and the whole country. A city›s educational institution could be a fantastic illustration of inventive and wise initiatives that lead to increased competitiveness. Hjalager (2002) supported the idea of the importance of the institutional innovations and universities are for this reason are places, where these innovations could be found due to their knowledge capital. Similarly, Ward (1998) agreed that the educational institutions as for instance the universities are crucial for inno- vations, smart technologies. 4 Methodology Qualitative research was conducted in this study and a case study approach has been applied. It was based on the collection of data by applying the re- search techniques of primary and secondary research. Primary research was conducted by the collection of questionnaires and by the application of the structured and unstructured interviews. Secondary research was based on the collection of materials from academic publications and materials about the studied destination, existing projects, and internet materials. The University of Waterloo was a place of research and a major research activity during the post-graduate study stay in the years from 2006 to 2010 and later were collected additional sources. The questionnaires were delivered by using social networks; however, in some cases were applied the direct interviews with the academics at the Uni- versity of Waterloo by using the structured and unstructured interviews in order to complete the final view about the studied problematic. Fig. 1: The Abernathy & Clark Approach to Tourism Innovations. Source: Abernathy and 5 Findings Clark, 2002, In Hjalager, A. M. (2002) (Eds.). The studied area of Waterloo is called the Technological Triangle and Knowledge Triangle of Canada and is compared to the American Silicon Val- ley in some ways. The population size of this region is about half a million. The City of Waterloo, as one of these three cities in the Technological and CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Knowledge Triangle of Waterloo, with a population of over 113 thousand governance; and transparency. The respondents also valued good invest- people, plays an important role in this agglomeration. The designation Tech- ment and entrepreneurship prospects; excellent opportunities to promote nological and Knowledge Triangle was given to the city of Waterloo due to culture; the quality of the educational institutions, health care facilities, well- the existence of a well-known university, Waterloo University, in the area of governed social services; and the abundant employment opportunities. It the city as well as the existence of a second university, Wilfred Laurier Uni- could be stated that Waterloo ranks 25th in the world as the most productive versity. Waterloo University has been ranked as one of the most innovative city for ecosystems and start-ups. In order to keep this designation, Waterloo universities in Canada and in the world (http://www.macleans.ca/educa- should become a leader in partnerships, technical expertise, and in the aca- tion/national-reputational-ranking-2016). demic prestige built by two already mentioned universities. The science-oriented character of the university with a strong co-op pro- Crucial for the designation of the innovative city and the innovation and gram allowing students to combine their studies with practical experience technological hub is the collaboration of the University of Waterloo with the enables them to support the entrepreneurship activities and the creation of city representatives, with the second university, Wilfred Laurier University, start-ups not only among the students but also among the small entrepre- and with the start-up companies. The Business Educational Partnerships neurs of the city. The existence of RIM (Science and Technological Park Re- program, promoted by the government of Canada as well as the provincial search in Motion and The Centre for International Governance Innovation government, enables students to participate in hands-on learning at local and the Institute for Quantum Computing) enabled us to provide a positive businesses. The government is also providing financial support from the scientific environment for research and innovative activities. In the last dec- public budget and private companies are also participating in the financing ade, the university has focused on technical field studies on nanotechnolo- of technological research at the University of Waterloo. gies. The second university, Wilfred Laurier University, in Waterloo, is busi- There exist several companies in the city of Waterloo that co-operate ness-oriented and is within walking distance of Waterloo University, which tightly in the programs of creating start-ups and innovation activities, and allows students to combine the programs and study courses. Wilfred Laurier among such companies are, for instance, a company called Communitech University, which has an excellent business department, is also located in and the Accelerator Centre, which are famous for the support of entrepre- Waterloo. neurship in high-technologies. The University of Waterloo created alliances It should be stated that the Waterloo region has, due to its education po- with the Waterloo Region and also cities of Waterloo, Kitchener, Cambridge, tential, a skilled and educated labor force, and excellent leadership and gov- Stratford, Dumfries, Wellesley, Wilmont, and Woolwich. Partnerships are im- ernance, the ability to attract investors, to create businesses, and to achieve portant for success and mutually beneficial growth. financial success. The innovation component in the development of this city Important is the collaboration of the University of Waterloo with the is evident in the presence of an enormous number of high-tech companies, as, Chamber of Commerce and the Deputy for Entrepreneurship. The partner- for example, the above mentioned RIM (Research in Motion), Desire2Learn, ship has also been created with the company Communitech. This coopera- OpenText, McAfee, Agfa, Sybase, Google, Electronic Arts, Dalsa,; and Sandvine, tion with public sector entities and companies is beneficial for the whole Kik Interactive, Miovision Technologies, Thalmic Labs, etc. Research in the region and enables cities to attract new investors, students, visitors to the field of physics is situated at the Perimeter Institute for Theoretical Physics. region and all neighboring cities. Several Ontario government activities were The City of Waterloo ranks at the top positions in the number of patents, focused on the start-up creation. entrepreneurship incubators, and start-ups in Canada. In the primary re- Silicon Valley in the United States and the Ontario Technology Corridor search, conducted in the city of Waterloo were mostly valuated in the re- are closely interrelated, especially through the educational institutions that sponds such qualities as the ethical principles, which were used by the local tightly cooperate. There are exchange study stays for students and special- governmental representatives; an excellent image of a city; well-established CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG ists. Entrepreneurs and companies from the USA visit the University of Wa- approximately 160 entrepreneurs to create or run their businesses, raise terloo and provide an employment campaign in order to hire the best gradu- money, and provide new employment opportunities in the city. This company ates for their companies. is also strongly supported by the Ontario and Canadian governments in their try in the special centre of the city, is allowed to employ approximately 250 The city of Waterloo, by housing over 6,000 enterprises in the IT indus- activities. Since 2008, the activities of this company have been named as the Velocity Residence, Velocity Garage, Velocity Alpha, Velocity Science, Veloc- ity Foundry, and Velocity Fund Finals (VFF). The last mentioned company is thousand employees. A good example is the Ontario Technology Corridor. It involved in the forming of start-ups in education and due to the partnership is important to mention in connection to this fact that the existing potential with the University of Waterloo were established 75 new companies. The in the Waterloo Region, which has been strongly supported by the govern- University of Waterloo and their partners pay attention to the inclusion and ment and the city representatives as well as academia, is generating by the support of young entrepreneurs in their entrepreneurial activities, which application of new IT technologies about 20% of Canada’s GDP. means creation of conditions for their business activities, the financial sup- One good example of the partnerships is the companies Intuitive Busi- port in the first stages of their business activities. Velocity Fund, for example, ness Intelligence Today and OpenText, which also contributed to the fact that provides a cash award of 375 thousand CAD to young entrepreneurs each Waterloo has become an intelligent city with the most innovative technolo- year in exchange for their entrepreneurial support. gies and approaches. city with a designation as one of the world’s intelligent communities. The Therefore, it is no surprise that in 2007, the city of Waterloo became a 6 Conclusion city admitted that one reason might also be a tight collaboration between the In this paper have been proposed several examples of mutual co-oper- city and both universities. ation and partnership creation and co-creation in the Waterloo-Kitchener operate with numerous think tanks, for example, the already mentioned Pe-It is really beneficial that the municipality and the academic partners co- region. Waterloo is a city defined by the existence of two universities, one of which has been designated as the most innovative university in Canada. The designation is strongly based on the mutual cooperation of the university rimeter Institute and the Center for International Governance, and the other with its partners in the city and region, as well as the creation of a milieu creative business entities. There have been two case studies that have been on the university campus that supports the idea of entrepreneurship among described as good practice cases of collaboration between Waterloo Univer- students and local start-ups. In this process, a strong foundation has been sity and other city partners for the case study purpose. These cases are two established for the growth of knowledge capital, the knowledge economy, companies, e. g., Communitech and Velocity. and smart technologies, which are part of the innovative activities. This has The company’s Communitech goal is innovation, leadership, networking, been strongly supported by the authors (Etzkowitz and Leydesdorff (2000) and promotion. This alliance is a partnership of 450-members and its mis- and also Hjalager, 2002). sion is to provide support for technological companies in a region and build The City of Waterloo and Waterloo University, as well as the cities of Kitch- technological clusters. Important is also a network of partners the cities of ener and Stratford, are excellent examples of this success, and the Triple He- Waterloo and Kitchener and the whole region. A good example is the crea- lix Model (the educational co-operation among partners in the city) is a valu- tion of the Canadian Digital Media Network (CDMN) and MIN (Manufactur- able case of good practice. It enables us to promote a process of innovation in ing Innovation Network). the academic environment and to provide good conditions for innovations, Another case of the productive mutual collaboration of the University of digitalization, and also sustainable development in the service sector, where Waterloo with a practice is Velocity. This company has helped, since 2008, education belongs, as well as in the entrepreneurship environment. CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG CORPORATE GOVERNANCE AND TECHNOLOGY IN THE AGE OF ESG Educational services, the digitalization process, and the quality of life in University of Technology, Institute of Strategy and International Business, Doctoral Disserta- a territory could all be fully enhanced through the innovation process. The tions 2003/4. the entire country and continent of North America, and Waterloo University at the 51st World Conference of the International Federation of Housing and Planning (IFHP), Copenhagen, 23-26 September, Denmark. is one of Canada’s most creative universities. Waterloo region is one of the most developed regions not only in Ontario, but Boisen, Martin 2007a. City Marketing in contemporary urban governance, paper presented The examples of the city of Waterloo and its Waterloo University, as well Boisen, Martin 2007. Strategic Marketing for middle-sized cities in the Netherlands. Master as Kitchener and Stratford, are good examples of successful cooperation, Boisen, Martin 2007. Thesis, University of Utrecht, Utrecht. which could be beneficial for different parts of Canada and the world as well. The role of city marketing in contemporary urban governance. As- sessed from http://bestplaceinstytut.org/www/wp-content/uploads/2012/08/Boisen- It could be finally stated that even if there exist similar cities, it is not 2007-City-marketing-in-Contemporary-Urban-Governance.pdf regions apply the same management or marketing techniques, there are on city tourism „New paradigms in City Tourism Development“, v Barcelona, December 9-10th, 2014. http://blogs.bournemouth.ac.uk/ekotourismlab/research-projects/phd-projects/ still more factors influencing their differences or success. It might be, for in- guaranteed that these cities achieve the same result. Even if these cities or Buhalis, Dimitrios 2014. Contribution on smart tourism to the UNWTO 3rd Global Summit stance, safety, security, image, reputation, trust. smart-tourism-destinations-explore-how-smartness-increases-competitiveness-in-the -con- text-of-tourism-destinations. Assessed from http:// www.smart-cities.eu Cai, Liping 2002. Cooperative branding for rural destinations. 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