Roy Shapira: Europe’s Corporate Sustainability Directive and Its Impact on U.S. Board Oversight Duties
Roy Shapira is a Professor of Law at Reichman University in Israel focused on reputation, regulation, and corporate governance. We explore his recent paper on the European Union's Corporate Sustainability Due Diligence Directive (CS3D) and its implications for U.S. corporate directors, particularly in relation to human rights and environmental obligations. Roy highlights the contrasts between the proactive regulatory environment in Europe and the growing opposition to ESG in the U.S., addressing the legal risks and potential oversight liabilities American directors may face under these new standards. We also examine the impact of recent amendments in Delaware law on inspection rights and the ensuing accountability for directors, alongside geopolitical factors shaping governance strategies. The episode concludes with insights on trends in board composition and the complexities of navigating corporate culture in today's complex environment. If you enjoy this episode, please consider subscribing, leaving a review, or sharing this podcast on social media. You can also support the podcast by subscribing to the Boardroom Governance Newsletter at evanepstein.substack.com This podcast is sponsored by the American College of Governance Counsel.
Boardroom Governance with Evan Epstein · Roy Shapira, Evan Epstein
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Show Notes
(0:00) Intro
(1:30) About the podcast sponsor: The American College of Governance Counsel
(2:17) Start of interview
(3:01) Roy's origin story.
(6:35) About the EU Corporate Sustainability Due Diligence Directive ("CS3D"). His paper co-authored with Luca Enriques and Matteo Gatti: How the EU Sustainability Due Diligence Directive Could Reshape Corporate America (2025)
(9:28) The Political Climate of ESG, and divide between US and EU. *On March 15, 2025, Tennessee senator Bill Hagerty filed "Protect USA Act", an anti-CS3D bill.
(12:45) Extraterritorial Reach of the CS3D
(14:20) What US board must do to comply with CS3D
(16:32) Oversight Duties Under U.S. Law ("Caremark Duties")
(23:10) Linking Caremark Duties with CS3D
(26:00) Sanctions for Non-Compliance with CS3D
(29:47) Compliance and Enforcement Mechanisms
(33:35) Changes to Delaware Corporate Law. Reference to Delaware's SB21
(34:26) Changes to Section 144 (controlling shareholder transactions)
(37:15) Changes to Section 220, Shareholder Inspection Rights
(41:33) Changes to independent director analysis by Delaware's SB21
(45:29) Geopolitical Tensions and Corporate Governance. "My general theme is that I don't envy being a director right now."
(46:48) The Impact of Specialist Directors. See his 2024 paper with Yaron Nili here.
(48:27) Books that have greatly influenced his life.
(49:10) His mentors.
- Professor Mark Roe (Harvard Law School)
- Professor Luigi Zingales (Chicago Business School)
(49:50) Quotes that he thinks of often or lives his life by: "Control what you can control."
(50:27) An unusual habit or an absurd thing that he loves.
Roy Shapira is a Professor of Law at Reichman University in Israel. He focuses his research on reputation, regulation, and corporate governance.
You can follow Evan on social media at:
X: @evanepstein
LinkedIn: https://www.linkedin.com/in/epsteinevan/
Substack: https://evanepstein.substack.com/
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