What does sustainability mean in concrete terms for the duties and liabilities of directors? And how far does their responsibility extend under current corporate law? These questions lie at the heart of the PhD research of Irem Akin, who earned her PhD at Erasmus School of Law within the Law & Business department. In her dissertation, ‘The Impact of Corporate Sustainability on Directors’ Duties and Liabilities: A Comparative Legal Study’, she examines how sustainability influences the codification and interpretation of directors’ duties and liabilities within the European Union, with a particular focus on France and the Netherlands. Her research was supervised by Maarten Verbrugh, Professor of Corporate Law and Vice Dean for master education, and Kid Schwarz, Emeritus Professor of Corporate Law. Akin defended her dissertation on 5 December 2025.
The choice of this topic stems from a broader interest in the role of companies within society. “I was drawn to this topic because I became deeply interested in the relationship between ‘the modern corporation’ and its reciprocal relationship with the broader society and environment in which it operates,” Akin explains. According to her, this relationship is not static but constantly evolving. “I also found it fascinating to reflect on how our ideas about certain concepts and actors have shaped, and continue to do so, the dynamics of this relationship.” It was precisely this interaction between law, corporate governance and societal expectations that prompted her to pursue this research.
Sustainability within existing legal frameworks
In recent years, sustainability has become a central theme in policymaking, case law and business practice. This development also affects directors. “As sustainability has gained prominence in recent years, its implications for companies and their directors have become increasingly significant for a wide range of groups, including, but not limited to, legislators, lawyers, activist groups, and judges,” says Akin. European initiatives such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) illustrate this shift.
At the same time, her research indicates that sustainability does not necessarily lead to a fundamental rupture with corporate law. “I found that sustainability is gradually reshaping both the understanding and application of directors’ duties, but always within the boundaries of long-established legal frameworks.” Even when legislation is amended, as was the case with the French Loi Pacte (2019), traditional corporate law principles remain the leading principles. However, there is room for change through the courts. Akin explains: “At the same time, I discovered that significant expansion could occur through judicial interpretation even if the underlying statutory duties remain unchanged. Nevertheless, such interpretive developments can raise questions of legitimacy and lead to problems regarding legal certainty.” In other words, sustainability does not transform corporate law overnight, but rather gradually shifts the meaning of existing rules, with judges playing a vital role, which raises questions about the clarity and predictability of the law.
Internal and external liability: How does it work?
A key aspect of Akin’s dissertation is the distinction between the internal and external liability of directors. Not all legal avenues are equally accessible for sustainability-related claims. “I also came to the conclusion that, under current law, the mechanisms available under corporate law for internal liability tend to be more accessible for sustainability-related claims than the external liability mechanisms available under tort law.” This finding is particularly relevant for legal practice. High evidentiary thresholds and legal uncertainty often characterise sustainability litigation. Akin’s research provides insight into the categories of claimants and the legal grounds available for holding directors accountable, highlighting both opportunities and limitations.
The difference between internal and external liability
Internal liability concerns the relationship between a director and the company itself. A company may hold a director liable if they have failed to perform their duties properly and the company has suffered damage as a result. This form of liability is based on corporate law. External liability, by contrast, refers to the liability of directors towards third parties, such as creditors, consumers, or other stakeholders. This form of liability is typically grounded within the broader framework of liability law.
What impact do directors’ choices have on society?
The relevance of Akin’s research extends beyond corporate law alone. “My research is not only academically but also socially highly relevant. It addresses one of the central challenges of our time: how corporations and their directors should respond to the sustainability crisis,” she emphasises. According to Akin, managerial decision-making has direct consequences for people and the environment. “The decisions taken by directors, and ultimately by the companies they manage, play a decisive role in shaping our social and environmental reality.”
This brings the role of the legislator into sharp focus. Without clear statutory guidance, fragmentation is likely to occur. “Without explicit legislative guidance, sustainability-related obligations risk remaining fragmented and disproportionately shaped by judicial interpretation,” Akin warns. For this reason, her dissertation includes a proposal for reform. “One of the key policy recommendations is that policymakers should provide clearer statutory guidance to reduce fragmentation and avoid overreliance on judicial interpretation.”
Reflecting on the norms of tomorrow
What Akin ultimately seeks to demonstrate is that the law is not detached from the reality it governs. “The way we formulate, understand, and interpret the law ultimately shapes the reality we create,” she argues. This, in her view, calls for careful reflection within the field of legal scholarship. “Therefore, today’s academic narratives about corporate law should be told carefully, as they may become tomorrow’s legal and societal norms.” Her research aims to contribute to that awareness and invites reflection on how directors’ duties, sustainability and liability are legally framed.
When that reflection leads to new perspectives, her objective has been achieved. “I would consider my research a success if it triggers a rethinking of our assumptions about the role and limits of corporate law in both legal doctrine and practice.”
- PhD student
