3,861 research outputs found

    Exit, No Exit

    Get PDF

    Corporate Governance and Control

    Get PDF
    Corporate governance is concerned with the resolution of collective action problems among dispersed investors and the reconciliation of conflicts of interest between various corporate claimholders. In this survey we review the theoretical and empirical research on the main mechanisms of corporate control, discuss the main legal and regulatory institutions in different countries, and examine the comparative corporate governance literature. A fundamental dilemma of corporate governance emerges from this overview: regulation of large shareholder intervention may provide better protection to small shareholders; but such regulations may increase managerial discretion and scope for abuse.

    A Configurational Approach to Comparative Corporate Governance

    Get PDF
    We seek to bring to the core of the study of comparative corporate governance analysis the idea that within countries and industries, there exist multiple configurations of firm level characteristics and governance practices leading to effective corporate governance. In particular, we propose that configurations composed of different bundles of corporate governance practices are a useful tool to examine corporate governance models across and within countries (as well as potentially to analyze over time changes). While comparative research, identifying stylized national models of corporate governance, has been fruitful to help us think about the key institutional and shareholder rights determining governance differences and similarities across countries, we believe that given the financialization of the corporate economy, current globalization trends of investment, and rapid information technology advances, it is important to shift our conceptualization of governance models beyond the dichotomous world of common-law/outsider/shareholder-oriented system vs. civil law/insider/stakeholder oriented system. Our claim is based on the empirical observation that there exists a wide range of firms that either (1) fall in the "wrong" corporate governance category; (2) are a hybrid of these two categories; or (3) should be placed into an entirely new category such as firms in emerging markets or state-owned firms. In addition, as Aguilera and Jackson (2003) argue, firms, regardless of their legal family constraints, their labor and product markets, and the development of the financial markets from which they can draw, have significant degrees of freedom to chose whether to implement different levels of a given corporate governance practice. That is, firms might chose to fully endorse a practice or simply seek to comply with the minimum requirements without truly internalizing the governance practice. An illustrative example of the different degrees of internalization of governance practices is the existing variation in firms' definition of director independence or disclosure of compensation systems. We first discuss the conceptual idea of configurations or bundles of corporate governance practices underscoring the concept of equifinal paths to given firm outcomes as well as the complementarity and substitution in governance practices. We then move to the practice level of analysis to show how three governance characteristics (legal systems, ownership and boards of directors) cannot be conceptualized independently, as each of them is contingent on the strength and prevalence of other governance practices. In the last section, we illustrate how different configurations are likely to playout across industries and countries, taking as the departing practice, corporate ownership.

    Resolving the Crisis in U.S. Merger Regulation: A Transatlantic Alternative to the Perpetual Litigation Machine

    Get PDF
    Regulation by litigation has driven U.S. merger regulation to crisis. The reliance on private lawsuits to police disclosures and potential conflicts of interest in mergers, takeovers, and other control transactions has resulted in the filing of claims after every major transaction. However, it has failed to achieve meaningful benefits for shareholders and has instead deprived them of potentially valuable rights. Regulation by litigation has devolved into attorney rent-seeking, and the raft of substantive and procedural reforms aimed at resolving the crisis has failed. There is an alternative to regulation by litigation. Drawing upon the code and panel-based models of merger regulation in the United Kingdom and Ireland, this Article explores whether a regulatory model might be better at protecting shareholder interests in merger transactions. A regulatory alternative holds a number of significant advantages, including greater speed, responsiveness, certainty, and lower administrative costs. In light of these potential advantages, it is remarkable that no U.S. state has experimented with a code and panel-based model of merger regulation. We explain the persistent difference between the U.S. and Anglo-Irish models by reference to interest group politics and, in particular, the power of the bar to influence corporate law reforms in the United States

    The Divergent Designs of Mandatory Takeovers in Asia

    Get PDF
    Optimal takeover regulation aims to promote efficient changes of corporate control while curbing inefficient takeovers. Viewed from a comparative perspective, the Anglo-American prototypes of takeover regulation spearhead not only the discourse but also the dissemination of takeover regulation globally. At one end of the spectrum, the law in the United States follows the market rule, whereby transfers of corporate control benefit from a regulatory free hand. At the other end of the spectrum lies the mandatory bid rule (MBR), epitomized by takeover regulation in the United Kingdom. Under the United Kingdom\u27s version of the MBR, an acquirer who acquires de facto control over a target must make a general offer to the remaining shareholders to acquire all of their shares at the same price it paid to acquire the controlling block. This Article aims to analyze how and why six significant Asian jurisdictions adopted the MBR and its variants. This is puzzling given that the jurisdictions display considerable divergence in terms of structural, legal, and institutional foundations, not only with their Anglo-American counterparts but also among themselves. This Article challenges the prevailing notion that the binary Anglo-American approach constitutes the framework for the dissemination of takeover regulation worldwide. The Article claims that because of the political economy of takeover regulation in the Asian jurisdictions, the choice to adopt various intermediate positions is by design and not by accident. Considering that the market rule provides suboptimal protection to minority shareholders and the MBR curbs the market for corporate control, the intermediate positions aim to balance these somewhat conflicting objectives. This study contributes to the wider debate surrounding the appropriate takeover regulation and, more specifically, the claims made by the proponents of the market rule on the one hand and the MBR on the other

    Generic Constitutional Law

    Get PDF
    This paper seeks to articulate and explore the emerging phenomenon of generic constitutional law, here and in other countries. Several explanations are offered for this development. First, constitutional courts face common normative concerns pertaining to countermajoritarianism and, as a result, experience a common need to justify judicial review. These concerns, and the stock responses that courts have developed, amount to a body of generic constitutional theory. Second, courts employ common problem-solving skills in constitutional cases. The use of these skills constitutes what might be called generic constitutional analysis. Third, courts face overlapping influences, largely not of their own making, that encourage the adoption of similar legal rules. These similarities make up a body of generic constitutional doctrine. In conclusion, the paper discusses why the idea of generic constitutional law should matter to legal academics, and whether judges can or should resist its development

    Generic Constitutional Law

    Get PDF
    This paper seeks to articulate and explore the emerging phenomenon of generic constitutional law, here and in other countries. Several explanations are offered for this development. First, constitutional courts face common normative concerns pertaining to countermajoritarianism and, as a result, experience a common need to justify judicial review. These concerns, and the stock responses that courts have developed, amount to a body of generic constitutional theory. Second, courts employ common problem-solving skills in constitutional cases. The use of these skills constitutes what might be called generic constitutional analysis. Third, courts face overlapping influences, largely not of their own making, that encourage the adoption of similar legal rules. These similarities make up a body of generic constitutional doctrine. In conclusion, the paper discusses why the idea of generic constitutional law should matter to legal academics, and whether judges can or should resist its development
    corecore