European Business Organization Law Review最新文献

The literature on enterprise foundations – foundations that own companies – is booming. As something new, this article compares the (civil law) public good enterprise foundation with the (common law) perpetual purpose trust. While the article is focused on Danish and US law, the analysis and discussions are designed to be useful for anyone interested in enterprise foundation law. The article offers insights on enterprise foundations as ownerless special-purpose institutions with legal personhood becoming majority owners of an otherwise traditional enterprise. The article bridges existing comparative law scholarship on civil law foundations and common law trusts in the light of recent developments within enterprise foundations and similar hybrids in Europe and the US. The US Patagonia perpetual purpose trust and the Danish Novo Nordisk enterprise foundation are used as examples of the different approaches in common law and civil law. Although trusts and foundations may functionally appear remarkably similar, significant differences exist. The article discusses a broad range of policy arguments regarding public good variants of the Danish enterprise foundation model. It argues that enterprise foundations may function as drivers of sustainable long-termism in US business and philanthropy, and explains how and why. Particularly, the article highlights that the ‘purpose lock’ and ‘asset lock’ combined with strong supervision powers may deliver a non-profit entity which includes public good distributions as well as responsible and active ownership, taking the hard edges off capitalism. Arguably, the public good enterprise foundation is one of the ‘queens’ of non-profit succession planning.

Private enforcement’s role in the European secondary securities market is narrow. Issuer companies’ civil liability for violations of the inside information disclosure obligation is no exception. While trying to avoid the shadow of the US class action institution, European scholarship has long explored ways to increase the role of private enforcement in the securities market. Harmonising issuer liability is one of the suggestions to create a more prominent role for private enforcement. Even though harmonising issuer liability would be a welcome option for legal certainty and investor protection, it seems unlikely to happen in the near future. As an initial step towards potential harmonisation, this article analyses credit rating agencies’ (CRAs) liability and liability for competition law violations from the viewpoint of information asymmetry in litigation. It evaluates whether the legislative solutions in the CRA III Regulation and the Competition Damages Directive regarding plaintiffs’ access to evidence could be used as models for a potential issuer liability regime. The article finds that the choices made in the Competition Damages Directive could serve as viable models for issuer liability. The provisions in that Directive solve the information asymmetry between the plaintiff and the defendant by granting the plaintiff access to evidence in litigation through a court order.

Executive remuneration has traditionally attracted the attention of scholars, regulators, and public opinion. In recent years, especially after epochal corporate scandals and financial crises, executive remuneration has polarized the political debate, leading to consequences for the way it was theorized, structured, and ultimately quantified within corporations. This article specifically examines the relationship between executive compensation and sustainability, with a focus on the influence of Environmental, Social, Governance (ESG) metrics in the context of European companies. The article provides a qualitative analysis of the historical debate on executive remuneration and considers the different theories informing corporate law. Furthermore, it offers a qualitative and empirical analysis of how executive compensation policies of the 300 largest companies by target capitalization in Europe – listed in the FTSE EuroFirst300 – take ESG parameters into account. Lastly, this article presents some policy considerations, particularly questioning whether executive remuneration is the right incentive for ESG compliance, and emphasizing the importance of a shift in corporate culture to effectively make corporate practices more sustainable.

Determining the extent to which parties have agreed to submit their disputes to arbitration is a matter of contract interpretation. It is very rare that an international arbitration convention or national legislation on international arbitration provides specific rules pertaining to interpretation of the scope of arbitration agreements. Therefore, general rules of contract interpretation are usually used as a starting point to construe the scope of international commercial arbitration agreements. Developing specific principles for interpretation is left to courts and arbitral tribunals. This paper focuses on the practice of courts regarding this matter in two countries, i.e., Switzerland and Turkey. The paper firstly provides an overview of the general principles adopted by the courts in the two countries. Then case law in both countries is compared and contrasted with regard to selected scenarios frequently occurring in practice. The comparison of case law reveals how courts’ differing approaches to arbitration can make a difference in practice, even where very similar rules are applied. The comparison confirms the reputation of Swiss courts for adopting a pro-arbitration approach. Turkish courts, on the other hand, seem to be more reluctant in construing the scope of international commercial arbitration agreements broadly. This paper argues that the current practice in Turkey does not reflect the legislator’s intent and courts should change their practice and adopt a more liberal approach in line with contemporary trends in international commercial arbitration practice.

Directive (EU) 2022/2464 introduces mandatory sustainability reporting for all large undertakings in the European Union, as well as third-country undertakings active in the Union. The new rules were mandated by the increase in investor needs, as well as the interest of civil society actors. The present article discusses the relationship of corporate social responsibility with law and the shift from voluntary to mandatory sustainability reporting. It first presents the main novelties of the Directive with regard to scope of application, issuance of uniform European reporting standards and introduction of mandatory external assurance. It then turns to the question of public and private enforcement of the new sustainability reporting obligations. Public enforcement is, to a certain degree, guaranteed by the amendment of existing rules. The new Directive is silent on private enforcement issues, although it may trigger private litigation, predominantly by shareholders. Other interested groups, such as consumers and civil society actors, will not be able to directly challenge breaches of the new rules, despite the intention of the legislator to foster sustainability reporting and responsible corporate behaviour to the benefit of civil societies.

The EU Sustainable Finance Disclosure Regulation (SFDR) establishes disclosure requirements to tackle greenwashing and ensure transparency for financial products. Contextualising the assessment based on literature on disclosures and indicators in the field of sustainability, as well as sustainability due diligence, this article analyses the SFDR disclosure requirements and its key definitions. It shows that the SFDR does not require that financial market participants (FMPs) cease or remedy the principal adverse impacts connected to their investments. The definitions of ‘promoting environmental and social characteristics’, ‘sustainable investment’ and its requirement of ‘do no significant harm’ are extremely open-ended and have not prevented FMPs from including investments harmful to sustainability, such as in oil and coal. The disclosure of complex ‘proxies’ for sustainable performance, such as investment policies and strategies, as well as a limited use of benchmarked information about positive and adverse sustainability impact cast doubt on the extent to which disclosed information can be understood and effectively drive investors towards sustainable investment products. Enabled by these shortcomings, FMPs have started using the SFDR as a label to claim that their products are ‘sustainable’. This article illustrates how the SFDR could be amended to introduce elements that would better align it with the practice of sustainability due diligence under the future Corporate Sustainability Due Diligence Directive and bring it closer to a labelling regime signalling products with higher sustainability credentials ˗ while still offering investors necessary sustainability-related information about products and entities.

Institutional investors are increasingly pushing their investee companies to address environmental, social and governance (ESG) issues—a phenomenon commonly called ESG stewardship. Scholars have put forward various reasons for investors’ enthusiasm for ESG stewardship. They include the financial materiality of ESG issues, a desire to appeal to ESG-conscious customers, and the scope for fund operators to charge higher fees for funds that pursue ESG strategies. There is, however, another critical factor at play. ESG stewardship is also underpinned by a transnational development—what this article calls the ‘global ESG stewardship ecosystem’. This global ecosystem is comprised of various ESG-focused actors, including United Nations agencies, institutional investors, investor networks, service providers to institutional investors, and NGOs and activist organizations. These actors operate in a highly networked manner at the transnational level to develop and disseminate norms of ESG stewardship throughout global markets, and encourage and coordinate investors’ ESG stewardship activities on the ground. This article highlights the scale, complexity and influence of the global ESG stewardship ecosystem, revealing it to be a significant facilitator of institutional investors’ ESG stewardship. This insight calls into question important contemporary assumptions and theories about institutional investors, including claims that they are ‘rationally reticent’, under-invest in corporate governance activities, and are incapable of overcoming collective action challenges. The global ESG stewardship ecosystem is also a remarkable example of the transnational influences shaping contemporary corporate governance. The ecosystem underpins the development and dissemination of norms of ESG stewardship and also assists institutional investors to undertake ESG stewardship ‘on the ground’ in the various markets in which they operate. The transnational influence of the ecosystem has important implications for national law makers and regulators who are focused on ESG investing and investor participation in public company corporate governance.

Social enterprises are becoming increasingly popular across the globe. They are seen, particularly by younger generations, as an exceptionally promising organizational model. More recently, the idea to tackle social challenges with entrepreneurial means has also been met warmly by policymakers. However, the legal framework for social enterprises remains poorly developed and legal analysis of the subject matter in academia is only slowly gaining momentum. Against this background, this article outlines the multifaceted, real-world phenomenon of social enterprises in business practice and management research, whereby different patterns of thought in Europe on the one hand and in the United States on the other can be identified. It then introduces the (corporate) law of social enterprises, especially the development of new organizational forms, and takes stock of this gradually emerging field of research in Germany, Europe, and the United States. Furthermore, it addresses research perspectives and open questions in the new field of social enterprise law, highlighting, inter alia, that one should distinguish more strongly than before between different models of social enterprises and organizational forms when considering a new legislative creation.

In this article we discuss how an investment firm established outside the EU may provide services (to clients) in the EU. We explore how such third country firms may enter the European market and discuss the current state of the third country regimes as provided (partly) under EU law, their use—or notable lack thereof—and the challenges involved in the supervision of third country firms. We note that the recent updates to the third country equivalence regime for the provision of services to professional clients render the use of this regime even more difficult. In respect of the (optional) third country regime for the provision of services to retail clients, we observe that this regime is much akin to a full license requirement, albeit with notable difficulties when it comes to supervision and enforcement. Altogether, we come to the unfortunate conclusion that the EU third country regime for investment firms established in third countries can barely be called successful.

Abstract

European legislation on investment funds does not provide for a single coherent third country regime. The UCITS Directive 1985, as one of the earliest directives aiming at financial product harmonisation within the European Union, never contained a third country regime. By contrast, the much younger AIFMD contains an elaborate, staged third country regime: while the first stage is essentially based on access under national private placement regimes subject to certain harmonised minimum requirements, the second stage is based on a ‘third country passport’ obliging third country actors to become fully licensed in an EU member state of reference. Contrary to expectations at the outset of AIFMD, it is questionable whether and when the second phase will be implemented. In the light of the rather cumbersome third country access regime for non-EU fund products and asset managers, delegation of portfolio management by EU-regulated management companies to third country asset managers is an important access path for asset management services into the European Union.