This paper analyses a real options model of mergers and takeovers between two firms experiencing different, but correlated, uncertainty. It is assumed that mergers do not just lead to efficiency gains, but are also an act of diversification. Due to the latter assumption the region where a merger is optimal is a bounded interval and not a half-space as in most real options models. It is shown that if the roles of the bidder and the target are determined endogenously the option value of the mergers vanishes completely, implying that, in equilibrium, the mergers occur sooner than when these roles are exogenously given. It is also shown that mergers can be optimal even if synergies are negative.
{"title":"Optimal and Strategic Timing of Mergers and Acquisitions Motivated By Synergies and Risk Diversification","authors":"J. Thijssen","doi":"10.2139/ssrn.1003785","DOIUrl":"https://doi.org/10.2139/ssrn.1003785","url":null,"abstract":"This paper analyses a real options model of mergers and takeovers between two firms experiencing different, but correlated, uncertainty. It is assumed that mergers do not just lead to efficiency gains, but are also an act of diversification. Due to the latter assumption the region where a merger is optimal is a bounded interval and not a half-space as in most real options models. It is shown that if the roles of the bidder and the target are determined endogenously the option value of the mergers vanishes completely, implying that, in equilibrium, the mergers occur sooner than when these roles are exogenously given. It is also shown that mergers can be optimal even if synergies are negative.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123084850","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In his essay, Toward Common Sense and Common Ground?, Delaware Vice Chancellor Leo Strine seeks to identify common concerns of corporate management, labor, and shareholders. In so doing, Strine endorses a vision of the corporation as "a social institution that, albeit having the ultimate goal of producing profits for stockholders, also durably serves and exemplifies other societal values." Accordingly, he directs our attention to the prospects of creating "a corporate governance structure that better fosters [the corporation's stakeholders'] mutual interest in sustainable economic growth." There is much that is admirable in Strine's analysis of what ails corporate governance and his proposals for reform, as well as much that is debatable. In this brief comment, I identify three aspects of Strine's analysis that strike me as underdeveloped. First, what do we mean when we call the corporation "a social institution"? Second, do managers and laborers really have common interests threatened by shareholders? Finally, even if Strine's search for common ground is a worthwhile project, is corporate law and governance the appropriate arena in which to find it? Taken together, these issues raise serious questions about the viability of Strine's project.
{"title":"The Shared Interests of Managers and Labor in Corporate Governance: A Comment on Strine","authors":"Stephen M. Bainbridge","doi":"10.2139/ssrn.985683","DOIUrl":"https://doi.org/10.2139/ssrn.985683","url":null,"abstract":"In his essay, Toward Common Sense and Common Ground?, Delaware Vice Chancellor Leo Strine seeks to identify common concerns of corporate management, labor, and shareholders. In so doing, Strine endorses a vision of the corporation as \"a social institution that, albeit having the ultimate goal of producing profits for stockholders, also durably serves and exemplifies other societal values.\" Accordingly, he directs our attention to the prospects of creating \"a corporate governance structure that better fosters [the corporation's stakeholders'] mutual interest in sustainable economic growth.\" There is much that is admirable in Strine's analysis of what ails corporate governance and his proposals for reform, as well as much that is debatable. In this brief comment, I identify three aspects of Strine's analysis that strike me as underdeveloped. First, what do we mean when we call the corporation \"a social institution\"? Second, do managers and laborers really have common interests threatened by shareholders? Finally, even if Strine's search for common ground is a worthwhile project, is corporate law and governance the appropriate arena in which to find it? Taken together, these issues raise serious questions about the viability of Strine's project.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"469 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-05-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125840776","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This short Essay addresses three topics on one aspect of the hedge fund industry - the SEC's recent efforts to regulate hedge funds. First, this Essay summarizes the regulation of hedge funds under U.S. federal securities laws insofar as protecting hedge funds is concerned. The discussion highlights four basic choices facing the SEC: (1) do nothing; (2) substantively regulate hedge funds directly; (3) regulate hedge fund managers; and (4) regulate hedge fund investors. Second, this Essay addresses the boundary between market discipline and government intervention in hedge fund regulation. To what extent should hedge fund investors be left to fend for themselves? Third, this Essay highlights two factors impacting regulatory decision making that help explain why the SEC pivoted in 2004 to regulate hedge funds when it had abstained from doing so in the past. These two factors are politics and psychology.
{"title":"Hedge Funds and the SEC: Observations on the How and Why of Securities Regulation","authors":"Troy A. Paredes","doi":"10.2139/SSRN.984450","DOIUrl":"https://doi.org/10.2139/SSRN.984450","url":null,"abstract":"This short Essay addresses three topics on one aspect of the hedge fund industry - the SEC's recent efforts to regulate hedge funds. First, this Essay summarizes the regulation of hedge funds under U.S. federal securities laws insofar as protecting hedge funds is concerned. The discussion highlights four basic choices facing the SEC: (1) do nothing; (2) substantively regulate hedge funds directly; (3) regulate hedge fund managers; and (4) regulate hedge fund investors. Second, this Essay addresses the boundary between market discipline and government intervention in hedge fund regulation. To what extent should hedge fund investors be left to fend for themselves? Third, this Essay highlights two factors impacting regulatory decision making that help explain why the SEC pivoted in 2004 to regulate hedge funds when it had abstained from doing so in the past. These two factors are politics and psychology.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129145722","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This essay first describes the differences in the ownership structure of companies in the three main economies of continental Europe - Germany, France, and Italy - with comparisons to the United States and the United Kingdom. Next, it summarizes the corporate governance issues that arise in firms with a dominant shareholder. Then, it provides a brief account of the major European corporate scandal, Parmalat, as an extreme example of investor expropriation in a family-controlled corporation. After outlining in general the legal tools that can be used to tackle abuses by controlling shareholders (internal governance mechanisms, shareholder empowerment, disclosure, public enforcement), it describes the corporate governance reforms enacted by France, Germany, and Italy between 1991 and 2005 and assesses the way in which investor protection in the three countries has changed.
{"title":"Corporate Governance Reforms in Continental Europe","authors":"L. Enriques, P. Volpin","doi":"10.1257/JEP.21.1.117","DOIUrl":"https://doi.org/10.1257/JEP.21.1.117","url":null,"abstract":"This essay first describes the differences in the ownership structure of companies in the three main economies of continental Europe - Germany, France, and Italy - with comparisons to the United States and the United Kingdom. Next, it summarizes the corporate governance issues that arise in firms with a dominant shareholder. Then, it provides a brief account of the major European corporate scandal, Parmalat, as an extreme example of investor expropriation in a family-controlled corporation. After outlining in general the legal tools that can be used to tackle abuses by controlling shareholders (internal governance mechanisms, shareholder empowerment, disclosure, public enforcement), it describes the corporate governance reforms enacted by France, Germany, and Italy between 1991 and 2005 and assesses the way in which investor protection in the three countries has changed.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114357849","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The community of corporate law scholars in the United States is fragmented. One group, heavily influenced by economic analysis of corporations, is exploring the merits of increasing shareholder power vis-a-vis directors. Another group, animated by concern for social justice, is challenging the traditional, shareholder-centric view of corporate law, arguing instead for a model of stakeholder governance. The current disagreement within corporate law is as fundamental as in any area of law, and the debate is more heated than at any time since the New Deal. This paper is part of a debate on the audacious question, Can Corporate Law Save the World? In the first part of the debate, Professor Kent Greenfield builds on his book, THE FAILURE OF CORPORATE LAW: FUNDAMENTAL FLAWS AND PROGRESSIVE POSSIBILITIES, offering a provocative critique of the status quo and arguing that corporate law matters to issues like the environment, human rights, and the labor question. In response, Professor Smith contends that corporate law does not matter in the way Professor Greenfield claims. Corporate law is the set of rules that defines the decision making structure of corporations, and reformers like Professor Greenfield have only two options for changing corporate decision making: changing the decision maker or changing the decision rule. More specifically, he focuses on board composition and shareholder primacy. Professor Smith argues that changes in corporate law cannot eradicate poverty or materially change existing distributions of wealth, except by impairing the creation of wealth. Changes in corporate law will not clean the environment. And changes in corporate law will not solve the labor question. Indeed, the only changes in corporate law that will have a substantial effect on such issues are changes that make the world worse, not better.
{"title":"The Dystopian Potential of Corporate Law","authors":"D. Smith","doi":"10.2139/ssrn.976742","DOIUrl":"https://doi.org/10.2139/ssrn.976742","url":null,"abstract":"The community of corporate law scholars in the United States is fragmented. One group, heavily influenced by economic analysis of corporations, is exploring the merits of increasing shareholder power vis-a-vis directors. Another group, animated by concern for social justice, is challenging the traditional, shareholder-centric view of corporate law, arguing instead for a model of stakeholder governance. The current disagreement within corporate law is as fundamental as in any area of law, and the debate is more heated than at any time since the New Deal. This paper is part of a debate on the audacious question, Can Corporate Law Save the World? In the first part of the debate, Professor Kent Greenfield builds on his book, THE FAILURE OF CORPORATE LAW: FUNDAMENTAL FLAWS AND PROGRESSIVE POSSIBILITIES, offering a provocative critique of the status quo and arguing that corporate law matters to issues like the environment, human rights, and the labor question. In response, Professor Smith contends that corporate law does not matter in the way Professor Greenfield claims. Corporate law is the set of rules that defines the decision making structure of corporations, and reformers like Professor Greenfield have only two options for changing corporate decision making: changing the decision maker or changing the decision rule. More specifically, he focuses on board composition and shareholder primacy. Professor Smith argues that changes in corporate law cannot eradicate poverty or materially change existing distributions of wealth, except by impairing the creation of wealth. Changes in corporate law will not clean the environment. And changes in corporate law will not solve the labor question. Indeed, the only changes in corporate law that will have a substantial effect on such issues are changes that make the world worse, not better.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"17 5","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131775032","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper addresses the question of whether EC freedom of establishment covers identity-preserving company law changes, which is one of the most debated issues in today's EC company law. This issue is significant because it was not tackled by the recent development of European Court of Justice (ECJ) case law, which concerned only the transfer of the administrative seat from the viewpoint of the country of arrival. ECJ faced the limits placed by the country of departure only in the case Daily Mail, which allows countries of departure to place whatever limits they prefer to the emigration of national companies. Regarding the application of national law, the main idea of this paper is that conflict rules can decide whether a transfer of the administrative seat and/or the registered office should lead to a change of the applicable law; on the contrary, substantive company laws decides on the liquidation of the emigrating company. The issue of the continuity of the legal identity raises the question as to whether EC freedom of establishment allows Member States to liquidate national companies transferring their registered office and/or administrative seat abroad. Despite a common view arguing to the contrary, I suggest that EC freedom of establishment does not allow Member State to wind-up emigrating companies, since, if this were the case, freedom of establishment would be only granted to shareholders as individuals, who should incorporate a new company in the country of arrival, and not to companies. The issue of the continuity of the legal identity is more controversial. EC freedom of establishment as such does not cover company law changes, but Member States have a strong interest in preserving the coincidence of registered office and applicable law. In order to fulfil this goal, Member States cannot liquidate companies transferring the registered office abroad; they can only allow companies transferring their registered office abroad to change company law. Hence we can say that Member States should still allow this if they want to grant the coincidence of registered office and applicable company law, even if the EC freedom of establishment does not cover the change of company law. We should then ask whether or not we really need a Directive allowing identity-preserving company law changes. EC freedom of establishment already forbids the liquidation of emigrating companies, and Member States which want to preserve the coincidence of registered office and applicable law should either adopt the "incorporation doctrine" or allow national companies to change lex societatis. This can only happen if the country of arrival also agrees upon this result. Moreover, it is not clear to what extent company laws of the countries of departure and of the countries of arrival should be applied to the transfer; it seems necessary to find a common solution throughout the EU which is able to protect all relevant interests, primarily the interests of minority shareho
{"title":"Seat's Transfer and State of Origin-Imposed Limits to Companies' Mobility","authors":"F. Mucciarelli","doi":"10.2139/ssrn.982238","DOIUrl":"https://doi.org/10.2139/ssrn.982238","url":null,"abstract":"This paper addresses the question of whether EC freedom of establishment covers identity-preserving company law changes, which is one of the most debated issues in today's EC company law. This issue is significant because it was not tackled by the recent development of European Court of Justice (ECJ) case law, which concerned only the transfer of the administrative seat from the viewpoint of the country of arrival. ECJ faced the limits placed by the country of departure only in the case Daily Mail, which allows countries of departure to place whatever limits they prefer to the emigration of national companies. Regarding the application of national law, the main idea of this paper is that conflict rules can decide whether a transfer of the administrative seat and/or the registered office should lead to a change of the applicable law; on the contrary, substantive company laws decides on the liquidation of the emigrating company. The issue of the continuity of the legal identity raises the question as to whether EC freedom of establishment allows Member States to liquidate national companies transferring their registered office and/or administrative seat abroad. Despite a common view arguing to the contrary, I suggest that EC freedom of establishment does not allow Member State to wind-up emigrating companies, since, if this were the case, freedom of establishment would be only granted to shareholders as individuals, who should incorporate a new company in the country of arrival, and not to companies. The issue of the continuity of the legal identity is more controversial. EC freedom of establishment as such does not cover company law changes, but Member States have a strong interest in preserving the coincidence of registered office and applicable law. In order to fulfil this goal, Member States cannot liquidate companies transferring the registered office abroad; they can only allow companies transferring their registered office abroad to change company law. Hence we can say that Member States should still allow this if they want to grant the coincidence of registered office and applicable company law, even if the EC freedom of establishment does not cover the change of company law. We should then ask whether or not we really need a Directive allowing identity-preserving company law changes. EC freedom of establishment already forbids the liquidation of emigrating companies, and Member States which want to preserve the coincidence of registered office and applicable law should either adopt the \"incorporation doctrine\" or allow national companies to change lex societatis. This can only happen if the country of arrival also agrees upon this result. Moreover, it is not clear to what extent company laws of the countries of departure and of the countries of arrival should be applied to the transfer; it seems necessary to find a common solution throughout the EU which is able to protect all relevant interests, primarily the interests of minority shareho","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128332745","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Mergers and acquisitions have long been, and seem likely to remain, objects of fascination within the world of finance. While scholars puzzle over the theoretical motivations and value impacts of such transactions, practitioners devote their efforts to fueling what has become a burgeoning juggernaut.1 The result of these twin streams of effort has been the creation of an unresolved, though clearly important, paradox.
{"title":"A Deal Too Far - the Case of the Killer Acquisition","authors":"T. Carlin, Nigel Finch, Guy B. Ford","doi":"10.2139/ssrn.937252","DOIUrl":"https://doi.org/10.2139/ssrn.937252","url":null,"abstract":"Mergers and acquisitions have long been, and seem likely to remain, objects of fascination within the world of finance. While scholars puzzle over the theoretical motivations and value impacts of such transactions, practitioners devote their efforts to fueling what has become a burgeoning juggernaut.1 The result of these twin streams of effort has been the creation of an unresolved, though clearly important, paradox.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121403757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economic analysis of contract law offers an influential argument against imposing a duty to disclose information and in support of guaranteeing reimbursement (break-up fees) for pre-contractual investments in acquiring information. According to the conventional wisdom, a negotiating party invests resources in information gathering on the basis of its expectation to extract the contractual surplus that the investment may generate. As a result, it is arguably essential to protect the investing party's ability to benefit from its investment in gathering information. Such protection can be provided either by allowing non-disclosure of relevant information that was discovered through a deliberate effort, or by strengthening its bargaining position through break-up fees. This article presents a revised theory, which substantially narrows the economic case against disclosure duties and in support of break-up fees. This paper's basic insight is that a negotiating party invests resources in acquiring information not only and often not even primarily to strengthen her bargaining position vis-a-vis her counterpart, but rather to achieve an advantage vis-a-vis her competitors (e.g., other traders who are interested in the same contract). A trader that acquires private information about the transaction's actual value can adjust her offer to reflect this information, and will thus have a greater likelihood of winning valuable contracts. Assuming that parties receive some benefit from contracting according to the price that reflects the transaction's actual value, a negotiating party has a competitive incentive to acquire information even if she knows ex-ante that her price offer will fully reflect her ex-post private information. Accordingly, forcing a negotiating party to disclose private information to her counterpart would not necessarily impede the ex-ante incentive to invest in acquiring such information. The upshot of this argument is that the mind-set of the existing literature, which argues against imposing a duty to disclose deliberately acquired private information and in favor of reimbursement provisions, cannot be substantiated without a careful inquiry into competition-based motivations to gather information.
{"title":"A Revised Economic Theory of Disclosure Duties and Break-Up Fees in Contract Law","authors":"Ofer Grosskopf, Barak Medina","doi":"10.2139/ssrn.935165","DOIUrl":"https://doi.org/10.2139/ssrn.935165","url":null,"abstract":"Economic analysis of contract law offers an influential argument against imposing a duty to disclose information and in support of guaranteeing reimbursement (break-up fees) for pre-contractual investments in acquiring information. According to the conventional wisdom, a negotiating party invests resources in information gathering on the basis of its expectation to extract the contractual surplus that the investment may generate. As a result, it is arguably essential to protect the investing party's ability to benefit from its investment in gathering information. Such protection can be provided either by allowing non-disclosure of relevant information that was discovered through a deliberate effort, or by strengthening its bargaining position through break-up fees. This article presents a revised theory, which substantially narrows the economic case against disclosure duties and in support of break-up fees. This paper's basic insight is that a negotiating party invests resources in acquiring information not only and often not even primarily to strengthen her bargaining position vis-a-vis her counterpart, but rather to achieve an advantage vis-a-vis her competitors (e.g., other traders who are interested in the same contract). A trader that acquires private information about the transaction's actual value can adjust her offer to reflect this information, and will thus have a greater likelihood of winning valuable contracts. Assuming that parties receive some benefit from contracting according to the price that reflects the transaction's actual value, a negotiating party has a competitive incentive to acquire information even if she knows ex-ante that her price offer will fully reflect her ex-post private information. Accordingly, forcing a negotiating party to disclose private information to her counterpart would not necessarily impede the ex-ante incentive to invest in acquiring such information. The upshot of this argument is that the mind-set of the existing literature, which argues against imposing a duty to disclose deliberately acquired private information and in favor of reimbursement provisions, cannot be substantiated without a careful inquiry into competition-based motivations to gather information.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"158 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114359939","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Takeovers Panel, which is the primary forum for resolving disputes about a take overbid while the takeover is underway, is empirically studied. The study provides an insight into the popularity of the panel as a resolution mechanism for takeover disputes, the nature of applications made, the profile of the parties, the nature of panel decisions and the role in panel reasoning of the policy objectives.
{"title":"The Takeovers Panel: An Empirical Study","authors":"Chris Miller, R. Campbell, I. Ramsay","doi":"10.2139/SSRN.924501","DOIUrl":"https://doi.org/10.2139/SSRN.924501","url":null,"abstract":"The Takeovers Panel, which is the primary forum for resolving disputes about a take overbid while the takeover is underway, is empirically studied. The study provides an insight into the popularity of the panel as a resolution mechanism for takeover disputes, the nature of applications made, the profile of the parties, the nature of panel decisions and the role in panel reasoning of the policy objectives.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132759593","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Corporate social responsibility is back on the corporate law reform agenda. From an Australian perspective, the evidence for this is found in the simultaneous but separate inquiries that, at the time of writing this paper, are being conducted into this topic by the Australian Parliament's Joint Committee on Corporations and Financial Services, and by the Australian Government's Corporations and Markets Advisory Committee (CAMAC). These developments are supported by the many standards, guidelines, principles, and codes promulgated by non-government bodies, industry groups and other international organisations. Cynics might dismiss these developments as part of a regular cycle of corporate law reform. After all, as we will see, this is not the first time that corporate social responsibility has appeared on the reform agenda. Others might suggest that, finally, this is an idea whose time has come. The purpose of this paper is to examine the extent to which this renewed, and widespread, attention to corporate social responsibility is being reflected in the substance of our systems of corporate law. Is it possible, and meaningful, to talk of a 'new corporate law' in which the concerns of people other than shareholders (or, indeed, the non-financial concerns of shareholders) are to be given serious attention?The plan of the paper is as follows. We begin with a brief survey of recent developments in different common law jurisdictions, with an emphasis on Australia, that have implications for the idea of corporate social responsibility. The focus here is not just on statutory developments, but also on the wider array of codes, guidelines and so on that were adverted to earlier. From this base, we then draw and elaborate upon two conclusions. The first is that the shareholder primacy model continues to exert a powerful, although sometimes misunderstood, effect on the capacity of legislators to respond to corporate social responsibility concerns. In particular, it has the potential to constrain the actions of directors in responding to those concerns, it constrains the power of shareholders to put these concerns in front of the board, and it constrains the capacity of non-shareholders to bring these concerns to the attention of company managers. The second conclusion is that much of the action regarding corporate social responsibility therefore occurs outside the parameters of the statutes, and it is in this sense that we can talk about a 'new corporate law': a system of corporate regulation that depends as much on (if not more on) non-statutory mechanisms and methods, which in many cases can have a more immediate impact on corporate operations. The final part of the paper examines some of these themes in more detail, by way of a 'case study' of the position of corporate employees. Whatever definition one takes of corporate social responsibility, it is undeniable that the financial and physical well-being of a company's employees must be a central concern.
{"title":"The New Corporate Law","authors":"S. Bottomley, A. Forsyth","doi":"10.2139/SSRN.1021083","DOIUrl":"https://doi.org/10.2139/SSRN.1021083","url":null,"abstract":"Corporate social responsibility is back on the corporate law reform agenda. From an Australian perspective, the evidence for this is found in the simultaneous but separate inquiries that, at the time of writing this paper, are being conducted into this topic by the Australian Parliament's Joint Committee on Corporations and Financial Services, and by the Australian Government's Corporations and Markets Advisory Committee (CAMAC). These developments are supported by the many standards, guidelines, principles, and codes promulgated by non-government bodies, industry groups and other international organisations. Cynics might dismiss these developments as part of a regular cycle of corporate law reform. After all, as we will see, this is not the first time that corporate social responsibility has appeared on the reform agenda. Others might suggest that, finally, this is an idea whose time has come. The purpose of this paper is to examine the extent to which this renewed, and widespread, attention to corporate social responsibility is being reflected in the substance of our systems of corporate law. Is it possible, and meaningful, to talk of a 'new corporate law' in which the concerns of people other than shareholders (or, indeed, the non-financial concerns of shareholders) are to be given serious attention?The plan of the paper is as follows. We begin with a brief survey of recent developments in different common law jurisdictions, with an emphasis on Australia, that have implications for the idea of corporate social responsibility. The focus here is not just on statutory developments, but also on the wider array of codes, guidelines and so on that were adverted to earlier. From this base, we then draw and elaborate upon two conclusions. The first is that the shareholder primacy model continues to exert a powerful, although sometimes misunderstood, effect on the capacity of legislators to respond to corporate social responsibility concerns. In particular, it has the potential to constrain the actions of directors in responding to those concerns, it constrains the power of shareholders to put these concerns in front of the board, and it constrains the capacity of non-shareholders to bring these concerns to the attention of company managers. The second conclusion is that much of the action regarding corporate social responsibility therefore occurs outside the parameters of the statutes, and it is in this sense that we can talk about a 'new corporate law': a system of corporate regulation that depends as much on (if not more on) non-statutory mechanisms and methods, which in many cases can have a more immediate impact on corporate operations. The final part of the paper examines some of these themes in more detail, by way of a 'case study' of the position of corporate employees. Whatever definition one takes of corporate social responsibility, it is undeniable that the financial and physical well-being of a company's employees must be a central concern.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"196 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123365583","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：