1,019 research outputs found

    Obligations in the Shade: The Application of Fiduciary Directors’ Duties to Shadow Directors

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    This paper argues that shadow directors, as defined in English law, ought to owe the full range of directors’ duties, both fiduciary and non-fiduciary, enacted in the Companies Act 2006 (CA 2006), ss 171-177, to the relevant company under their influence. Following the enactment of the recent Small Business, Enterprise and Employment Act (SBEEA) 2015, these general duties are likely to apply to shadow directors, although there is still a case to be made as to why shadow directors should owe fiduciary duties to the relevant company. It is argued here that such a relationship is fiduciary in nature, but the current approach deployed in the English courts, based upon the application of Finn’s originally formulated ‘undertaking’ test alone, is inadequate. Given these inadequacies, it is proposed that the Canadian ‘power and discretion’ test be deployed alongside the ‘undertaking’ test, in order to provide a far more comprehensive justification for the application of fiduciary obligations to shadow directors. This position is supported by establishing a theoretical basis for the ‘power and discretion’ test, via Paul Miller’s ‘fiduciary powers theory’, as well as considering the application of such a test to shadow directors

    Risk-shifting Through Issuer Liability and Corporate Monitoring

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    This article explores how issuer liability re-allocates fraud risk and how risk allocation may reduce the incidence of fraud. In the US, the apparent absence of individual liability of officeholders and insufficient monitoring by insurers under-mine the potential deterrent effect of securities litigation. The underlying reasons why both mechanisms remain ineffective are collective action problems under the prevailing dispersed ownership structure, which eliminates the incentives to moni-tor set by issuer liability. This article suggests that issuer liability could potentially have a stronger deterrent effect when it shifts risk to individuals or entities holding a larger financial stake. Thus, it would enlist large shareholders in monitoring in much of Europe. The same risk-shifting effect also has implications for the debate about the relationship between securities litigation and creditor interests. Credi-tors’ claims should not be given precedence over claims of defrauded investors (e.g., because of the capital maintenance principle), since bearing some of the fraud risk will more strongly incentivise large creditors, such as banks, to monitor the firm in jurisdictions where corporate debt is relatively concentrated

    Law, Social Norms and Welfare as Means of Public Administration: Case Study of Mahalla Institutions in Uzbekistan

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    Despite numerous challenges, since its independence, Uzbekistan, with the exception of the May 2005 Andijan events, has enjoyed extraordinary political stability and not recorded any considerable cases of interethnic or interfaith conflict, regime change or civil war, whereas neighboring Kyrgyzstan, labeled an “island of democracy” by the Western world, has experienced numerous conflicts and chaos, ranging from “color revolutions” to ethnic conflict. However, for understanding Uzbekistan’s ability to cope with internal and external challenges, little recourse is made to the post-independence discourse on public administration known as “mahalla reforms”. In spite of the significant existing body of literature on the mahalla, there has been little systematic scholarly investigation of the role of mahalla in maintaining political stability and security in Uzbekistan. Previous studies did not provide an account of how the law, social norms and welfare come to interplay in the mahalla system and how this influences the public administration developments in Uzbekistan. This paper begins to redress this lacuna by analyzing public-administration reforms in post-independence Uzbekistan, namely mahalla reforms, with an effort to show how political and social stability is established through mahalla, and to what extent those reforms have affected the position of individuals vis-à-vis the public-administration system. In undertaking this task, the paper employs three theoretical concepts: the theory of norms, the welfare-pentagon model and the theory of social control. In this paper, I argue that public-administration reforms since 1991 have transformed mahalla into a comprehensive system of social control; and therefore, mahalla can be places of democratic involvement or sites of authoritarianism in Uzbekistan

    The comitology game: European policymaking with parliamentary involvement

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    This paper discusses institutional reforms that might strengthen the role of the European Parliament in the policymaking process of the European Union. Using simple game theory, the paper analyzes the working properties of the different implementation procedures that are known as ‘comitology’. The Council of the European Union employs these procedures when it delegates some of its policymaking power to the Commission as part of Union legislation. We show how the balance of power is determined by the current comitology procedures, and how this balance would change if the role of the European Parliament were strengthened in the comitology game
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