European Company Law in transformation—strive for participation and sustainability

Abstract

European Company Law, a European Union (EU)-level company law (as ‘federal policy’), has passed the 50-year mark these years. Twenty-five of those years were dominated by a market function approach, the ‘black-box’ approach, where the company was seen from outside and guaranteeing necessary information for those outside the corporation, rational information users (namely long-term creditors and investors), was paramount. A transformation away from this approach began some 30 years ago; the last 20 years were dominated, first, by an approach that strongly increased participation and true multiple ‘voices’ in companies—as an approach meant to empower and heat up discussion, it can be termed the ‘red-box’ approach. This is an approach where more structural information and empowerment took place, and relations within the company were more in the focus of the legislature as well. The advent of new economic sociology could also be sensed, as the EU became more of a political Union or the concept of a competition of legislatures became a potential reality, such as with Centros. As a common denominator, the ‘wisdom of the crowds’ would seem to be more in the focus. The second phase of these last 20 years, primarily in the last decade, was then dominated by a fixing of certain long-term goals from the outside, fostering a goal of sustainability. Again, important general trends of theoretical thought emerged, and this phase can therefore be seen as a ‘green-box’ approach. A framework constitution of values is the aim of such an approach. This article brings together EU company law as a federal task and the development of these three phases, including the history of thought and political developments, as well as their theoretical and political underpinning. The article does this mainly for development at the EU level (ius communitatis), but also provides a link to (comparative) national developments and inspiration (ius commune).