The New Geographies of Corporate Law Production

Abstract

This article starts from the understanding of corporate governance as a transnational regulatory field of law production, contestation and policy conflict. It advances three arguments, a historical one, a sociological one and a legal doctrinal/legal theoretical one. Historically, we argue that the evolution of corporate governance norms must be seen against the background of ongoing and continuing transformations in the relationships between states and markets in the provision of a growing range of formerly “public” services and functions. As the societal role of corporations expands beyond an essentially financial role, corporate governance norm production mirrors the diversification of regulatory concerns associated with the firm’s place in society. From a sociological perspective, we argue that the transnationalization of present-day corporate governance regimes constitutes not so much a categorically different state of corporate law in an age of “globalization”, but a continuation of the corporate law’s inherent legal pluralism in terms of co-existing public and private, hard and soft, formal and informal norms. Finally, our legal doctrinal and legal theoretical argument posits that the emerging constellations of corporate governance are mirrored in changing understandings of rules applied to corporate responsibility, director liability or a company’s reporting standards. In order to further explicate the particular dynamics that characterize the new geographies of corporate governance norms today, we take the evolving law of shareholder stewardship as a case-in-point. Our analysis intervenes at the intersection of what is, normatively, a political challenge to the corporate governance understanding of the past twenty years – the latter being confined to a triple fallacy of a vain competition between shareholder versus stakeholder oriented concepts of the firm, a polarization between monolithic national models of corporate governance, and a binary distinction between state-made/hard/binding law and non-state/soft/non-binding law – and, institutionally, the dramatic de-nationalization of market regulation through governmental fiat. We argue that this plurality of corporate governance political economies today can only be scrutinized through a more differentiated, analytical lens which focuses on the emerging actors, norms and processes that constitute the intersecting and overlapping transnational regimes of corporate governance today. Transnational corporate governance is thereby rendered as a methodological laboratory to inquire into emerging forms of authority and legitimacy, scrutinizing competing claims of effectiveness and testing the “real world” impact that emerging regulatory forms, such as stewardship codes, have on a wider set of stakeholders and “affected” populations. In that vein, a critical project of transnational corporate governance prompts a reconceptualization of the “transnationally embedded” corporation and its key actors as a counter model to today’s financialized economic governance framework and has broader implications for corporate law production. Forthcoming in 42 University of Pennsylvania Journal of International Law (2020)