COMPARATIVE CORPORATE GOVERNANCEassets.cambridge.org/97811070/25110/frontmatter/9781107025110… · Comparative corporate governance: a functional and international analysis / edited

COMPARATIVE CORPORATEGOVERNANCE

The business corporation is one of the greatest organizational inventions,but it creates risks both for shareholders and for third parties. To mitigatethese risks, legislators, judges, and corporate lawyers have tried to learnfrom foreign experiences and adapt their regulatory regimes to them.In the last three decades, this approach has led to a stream of corporateand capital market law reforms unseen before. Corporate governance, thesystem by which companies are directed and controlled, is today a keytopic for legislation, practice, and academia all over the world.Corporate scandals and financial crises have repeatedly highlighted

the need to better understand the economic, social, political, and legaldeterminants of corporate governance in individual countries. Compara-tive Corporate Governance furthers this goal by bringing together currentscholarship in law and economics with the expertise of local corporategovernance specialists from twenty-three countries.

andreas m. fleckner is a senior research fellow at the Max PlanckInstitute for Comparative and International Private Law, Hamburg,Germany.

klaus j. hopt is a professor of law and director (emeritus) of the MaxPlanck Institute for Comparative and International Private Law, Hamburg,Germany.

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International Corporate Law and Financial Market Regulation

Corporate law and financial market regulation matter. The GlobalFinancial Crisis has challenged many of the fundamental conceptsunderlying corporate law and financial regulation; but crisis and reformhas long been a feature of these fields. A burgeoning and sophisticatedscholarship now challenges and contextualizes the contested relationshipbetween law, markets, and companies, domestically and internationally.This series informs and leads the scholarly and policy debate bypublishing cutting-edge, timely, and critical examinations of the mostpressing and important questions in the field.

Series editorsProfessor Eilis Ferran,

University of Cambridge.Professor Niamh Moloney,

London School of Economics and Political Science.Professor Howell Jackson,Harvard Law School.

Editorial boardProfessor Marco Becht,

Professor of Finance and Economics at Université Libre de Bruxellesand Executive Director of the European Corporate Governance Institute.

Professor Brian Cheffins,S. J. Berwin Professor of Corporate Law at the Faculty of Law, University

of Cambridge.Professor Paul Davies,

Allen & Overy Professor of Corporate Law and Professorial Fellow ofJesus College, University of Oxford.

Professor Luca Enriques,Visiting Professor, Harvard Law School.

Professor Guido Ferrarini,Professor of Business Law at the University of Genoa and Fellow of the

European Corporate Governance Institute.Professor Jennifer Hill,

Professor of Corporate Law at Sydney Law School.Professor Klaus J. Hopt,

Director (emeritus) of the Max Planck Institute for Comparative andInternational Private Law, Hamburg, Germany.

Professor Hideki Kanda,Professor of Law at the University of Tokyo.

Professor Colin Mayer,Peter Moores Professor of Management Studies at the Saïd Business

School and Director of the Oxford Financial Research Centre.






James Palmer,Partner of Herbert Smith, London.

Professor Michel Tison,Professor at the Financial Law Institute of the University of Ghent,

Belgium.Andrew Whittaker,

General Counsel to the Board at the UK Financial Services Authority.Professor Eddy Wymeersch,

former Chairman of the Committee of European Securities Regulators;former chairman of the International Organization of SecuritiesCommisions European Regional Committee, and Professor of

Commercial Law, University of Ghent, Belgium.











COMPARATIVE CORPORATE

GOVERNANCE

A Functional and International Analysis

Edited by

ANDREAS M. FLECKNER

and

KLAUS J. HOPT






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Comparative corporate governance: a functional and internationalanalysis / edited by Andreas M. Fleckner and Klaus J. Hopt.

pages cm. – (International corporate law and financial market regulation)Includes index.

ISBN 978-1-107-02511-0 (Hardback)1. Corporate governance–Law and legislation. I. Fleckner, Andreas M., editor of compilation.

II. Hopt, Klaus J., 1940- editor of compilation.K1327.C6524 20133460 .0662–dc232012046834

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CONTENTS

Contributors xPreface xixAbbreviations xxiii

part i General report 1

1. Comparative corporate governance: the state of the artand international regulation 3

klaus j. hopt

part ii National reports 103

A. Australia and Asia 105

2. Australia: The architecture of corporate governance 106

jennifer g. hill

3. China: Corporate governance of business organizations 156

junhai liu and knut b. pissler

4. Taiwan: Corporate governance of publicly heldcompanies 208

wen-yeu wang and wang-ruu tseng

5. Japan: Listed companies’ corporate governance 233

nobuo nakamura

B. Europe 273

6. Austria: Legal framework of corporate governance 274

susanne kalss

7. Belgium: The legal system of corporate governance 310

alexia autenne

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8. Denmark: Corporate governance in Denmark 364

jan s. christensen

9. Finland: Corporate governance: Nordic traditionwith American spices 393

jukka t. mahonen

10. France: The permanent reform of corporate governance 444

pierre-henri conac

11. Georgia: Corporate governance of business corporations 504

lado chanturia and george jugeli

12. Germany: Internal and external corporate governance 521

hanno merkt

13. Hungary: Corporate governance of listed companies 572

peter j. nikolicza

14. Luxembourg: Corporate governance of listed companies 604

isabelle corbisier and pierre-henri conac

15. Netherlands: Corporate governance in the Netherlands 648

jaron van bekkum, steven hijink, michael c.

schouten, and jaap w. winter

16. Norway: Corporate governance on the outskirtsof the EU 702

beate sjafjell and cecilie kjelland

17. Poland: Corporate governance of joint-stock companies 753

stanisław sołtysinski

18. Portugal: Synopsis on corporate governance 788

jorge m. coutinho de abreu

19. Spain: Listed companies’ governance 822

jose a. garcıa-cruces gonzalez and ignacio

moralejo menendez

20. Switzerland: The system of corporate governance 868

peter v. kunz

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21. United Kingdom: The scope and dynamics of corporategovernance regulation 913

marc t. moore

C. The Americas 957

22. Argentina: Corporate governance of private andpublic companies 958

raul a. etcheverry and rafael m. manovil

23. Brazil: New developments in corporate governance 1013

nelson l. eizirik and ana c. weber

24. United States: Corporate governance for publiclytraded corporations 1042

arthur r. pinto and franklin a. gevurtz

part iii Annex: Questionnaire 1093

25. Introduction and questionnaire for the countryreporters 1095

klaus j. hopt

Index 1103

contents ix






CONTRIBUTORS

alexia autenne is a senior research fellow of the National Fund forScientific Research in Belgium. She is a professor at the Faculty of Law of theUniversity of Louvain as well as at the Faculty of Law of the Free Universityof Brussels. She has a doctorate in law from the University of Louvain and aLL.M. from Cambridge University. She is also a member of the AlumniCollege of the Royal Academy of Belgium. Her main research topics arecorporate governance, pension funds, commercial law, and law and eco-nomics. She teaches various courses in commercial and business law.

jaron van bekkum is a lawyer at De Brauw Blackstone Westbroek inAmsterdam and holds a master degree in philosophy. He specializesin Dutch and European corporate and insolvency law and is involved inmany director and shareholder liability cases in the Netherlands. He haspublished several articles on the golden share cases of the European Courtof Justice.

lado chanturia is a full professor of law at the State University in Tbilisi,Georgia, and a visiting professor at the Christian-Albrechts-University of Kiel,Germany. Before, he was chairman of the Supreme Court of Georgia, Ministerof Justice of Georgia, advisor to the President of Georgia, and senior advisor ofthe German International Cooperation (GIZ) for legal and judicial reforms inCentral Asia. He was research fellow at the universities of Göttingen andBremen, Germany, as well as at the Max Planck Institute for Comparativeand International Private Law, Hamburg, Germany.

jan s. christensen is a supreme court judge. Until recently, he was aprofessor of corporate law at the University of Copenhagen Faculty of Law,Denmark. He holds a doctoral degree from the University of Copenhagen(1991) and an LL.M. from Columbia University (1988). He was a member ofthe European Commission’s High Level Group of Company Law Experts andchairman of the Danish Competition Council. Prior to becoming a law

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professor, he was a partner of Bech-Bruun & Trolle Law Firm, Copenhagen,and worked with the law firm Debevoise & Plimpton, New York.

pierre-henri conac is a professor of commercial law at the Universityof Luxembourg. Before, he was an associate professor at the University ofParis I (Panthéon-Sorbonne), France. He has a Ph.D. in law from theUniversity of Paris I, an LL.M. from Columbia Law School, and is admittedas attorney-at-law in the state ofNewYork.He ismanaging editor of the FrenchRevue des sociétés and an editor of the European Company and FinancialLaw Review (ECFR). He was a member of the EU Reflection Group on theFuture of European Company Law for the European Commission (2011).

isabelle corbisier is a lecturer in law at the University of Luxembourgand a guest professor at the management school of the University of Liège(HEC-Ulg), Belgium. She has been an attorney in Brussels and is now ofcounsel at a major international law firm. She has an LL.M. from LouisianaState University (US) in addition to her Belgian law degree. She previouslytaught at various universities in Belgium. In 2011 she obtained a Ph.D. in lawsumma cum laude from the University of Luxembourg with a comparativelaw work bearing on the nature of the company (contract or institution?).

jorge m. coutinho de abreu is a full professor at the Faculty of Lawof the University of Coimbra. He is the president of “IDET – Instituto deDireito das Empresas e do Trabalho” (Institute of Enterprise and Labor Law)and co-director of Direito das Sociedades em Revista (magazine focusingon company law).

nelson l. eizirik is the founding partner of Carvalhosa & EizirikAdvogados, acting as a corporate lawyer in Rio de Janeiro and São Paulo, Brazil.He has a master’s degree in law from Pontifícia Universidade Católica of Rio deJaneiro. He has acted as a commissioner of the Brazilian Securities and ExchangeCommission. He is a member of the International Faculty for Corporate &Capital Market Law and of the Chamber of Market Arbitration created by theSão Paulo Stock Exchange. He recently published the book Comments onBrazilian Corporate Law (Rio de Janeiro: Quartier Latin, 2011).

raul a. etcheverry is a professor emeritus and director of the masterprogram in commercial law at the Faculty of Law of the University ofBuenos Aires, Argentina. He holds Ph.D.s from the University of BuenosAires and the University Católica Argentina, and he has received a doctorate

contributors xi






from the University of Castilla La Mancha, Spain. He was a judge at thecommercial court of appeals of Buenos Aires and general attorney ofthe Province of Buenos Aires. Founding member and vice president of theInternational Academy of Consumer and Commercial Law and formerpresident of the Argentine Comparative Law Association.

andreas m. fleckner is a senior research fellow at the Max PlanckInstitute for Comparative and International Private Law and a lecturer atBucerius Law School, Hamburg, Germany. He has a Ph.D. in law fromRegensburg, an LL.M. from Harvard, and is admitted as attorney-at-law inthe state of New York. For his book on the concept and the history of thebusiness corporation (Antike Kapitalvereinigungen, Cologne/Weimar/Vienna:Böhlau, 2010), he has won the Otto Hahn Medal and the Otto Hahn ResearchAward of the Max Planck Society as well as the Prize of the German Congressof Legal Historians.

jose a. garcıa-cruces gonzalez is a full professor of commerciallaw at the University of Saragossa, Spain. He has taught in several otherSpanish and Latin American universities. Appointed member of the GeneralCodification Commission and negotiator in the “Special Commission tostudy, determine, and establish a solution proposal for the problems derivingfrom the implementation of economic law and order.” Associate member ofthe Jurisprudence and Legislation Royal Academy. Author of ten mono-graphs and of over one hundred papers published in the most relevantcommercial law reviews, and editor of several collective publications.

franklin a. gevurtz is a distinguished professor and scholar at theUniversity of the Pacific, McGeorge School of Law, and the director ofthe Pacific McGeorge Global Center for Business & Development. Histreatise Corporation Law is widely cited both in the United States andabroad. He has written a number of other books and numerous law reviewarticles, including on topics of comparative corporate and securities laws. Hehas also been a visiting professor at the University of California, Berkeley,and at the Catholic University of Portugal.

steven hijink is a professor of financial reporting law at the ErasmusSchool of Law, Erasmus University Rotterdam, the Netherlands. Further-more he is admitted as attorney-at-law in Amsterdam. He has a Ph.D. in lawfrom the University of Amsterdam and specializes in corporate law, includ-ing corporate governance, financial reporting law, and securities law.

xii contributors






jennifer g. hill is a professor of corporate law at Sydney Law School,Australia, and a director of the Ross Parsons Centre of Commercial, Cor-porate and Taxation Law. She has held visiting professorships at several USlaw schools, including Vanderbilt, University of Virginia, University ofTexas, and Cornell. She is a research associate of the European CorporateGovernance Institute, and a member of the corporations law editorial boardfor Cambridge University Press; the Law Council of Australia, CorporationsLaw Committee; and the Corporations and Markets Advisory Committee(CAMAC), Legal Sub-Committee, which advises the Australian governmenton corporate law reform.

klaus j. hopt is a professor of law and director (emeritus) of the MaxPlanck Institute for Comparative and International Private Law, Hamburg,Germany. Before, he was a full professor at the universities of Tübingen,Florence, Berne, and Munich. He held visiting professorships at Harvard,Columbia, University of Chicago, NYU, and elsewhere. He was a judge of theCourt of Appeals of Stuttgart, member of the European Commission’s HighLevel Group of Company Law Experts and expert, inter alia, for the GermanParliament, the European Commission, and the Bank for International Settle-ments. He is a member of the German National Academy Leopoldina.

george jugeli is an assistant professor and a lecturer of corporate lawat the Caucasus University School of Law, Tbilisi, Georgia. He has a Ph.D.in law from the University of Bremen, Germany. He conducted his post-doctoral research at the Max Planck Institute for Comparative and Inter-national Private Law, Hamburg, Germany with the support of a scholarshipof the Alexander von Humboldt Foundation. Currently, he also works ascommercial law specialist for the East–West Management Institute JudicialIndependence and Legal Empowerment Program (EWMI JILEP) in Georgia.

susanne kalss is a professor of private and commercial law at theUniversity of Economics and Business in Vienna, Austria (Wirtschaftsuni-versität Wien, WU Wien). After gaining her post-doctoral lecturing qualifi-cation in 2000 at the WU Wien, she became in the same year a professor ofprivate law at the University of Klagenfurt, Austria. In 2003 she became aprofessor at the WU Wien. Her special fields of research are corporate andcommercial law, financial markets law, and the law of foundations.

cecilie kjelland is a post-doctoral researcher at the Faculty of Law,University of Oslo, Norway, and legal counsel at Yara International ASA.

contributors xiii






Her major research areas are company law and corporate governance. Shehas a Ph.D. in law from the University of Freiburg, Germany, and an LL.M.from the University of Bochum, Germany. She has extensive experience aslegal counsel and board secretary inNorskHydro ASA and Yara InternationalASA. She has given guest lectures at the University of Freiburg since 2002.

peter v. kunz is a full-tenure professor of business law at the Universityof Berne Law School, Switzerland, and head of its Institute of Business Law.He specializes in corporate law, in financial markets law, as well as in grouplaw on both national and international levels. He has a Ph.D. in law fromBerne, for which he won the Prof. Walther Hug Prize, and an LL.M. fromGeorgetown University Law Center in Washington, DC, US. Before hisacademic career, he worked for more than twelve years as a lawyer and apartner in a major Zurich business law firm.

junhai liu is a professor and director of the Business Law Center, RenminUniversity of China. He was a research fellow and assistant director at theInstitute of Law, Chinese Academy of Social Sciences (CASS) from 1995 to2006. He received an LL.M. from the China University of Politics & Law in1992 and a J.S.D. from CASS in 1995. He was a visiting scholar in Michigan,Wisconsin, Kansas, Amsterdam, and Oslo. In addition to advising NPC onthe reform of corporate law and securities law in 2005, he has advised theSupreme Court on numerous corporate law interpretations and cases.

jukka t. mahonen is a professor of civil law and present Dean of theFaculty of Law at the University of Turku, Finland. He has an LL.D. and anM.Sc. (Econ.) from Turku and an LL.M. from Berkeley. He has writtennumerous books and articles on corporate law both from practical andtheoretical perspectives. He was a member of the Advisory Group onCorporate Governance and Company Law of the European Commission.He is the chairman of the Finnish Audit Board of the State.

rafael m. manovil is a professor (emeritus) of the Faculty of Law of theUniversity of Buenos Aires, Argentina, and a full member of the NationalAcademy of Law and Social Sciences in Buenos Aires. He is a lecturerat several other universities, including Bucerius Law School, Hamburg,Germany. In the past he was granted a fellowship by the Max Planck Institutefor Comparative and International Private Law, Hamburg. For twenty-three years he was president of the Argentine-German Law Society, and he isa board member of the Association Internationale de Droit Nucléaire.

xiv contributors






hanno merkt is a professor of law and director of the Institute forComparative and International Private Law at the University of Freiburg,Germany and judge of the Court of Appeals of Karlsruhe, Germany. Hisresearch and teaching focuses on German, European, and internationalcommercial as well as corporate and securities law. He is a member ofvarious expert commissions, inter alia, with the Federal FinancialSupervisory Authority (BaFin) and the Stock Exchange Commission, andwas an expert for the German and the European legislatures. He is co-editorof various law journals (ECFR, ZGR et al.).

marc t. moore is a senior lecturer in law at University College London,UK, and deputy director of the UCL Centre for Commercial Law. Hepreviously taught at the University of Bristol, UK, and has held a visitingteaching position in the Adolf A. Berle, Jr. Center for Corporations, Law andSociety at Seattle University School of Law, US. He is currently writing abook titled Corporate Governance in the Shadow of the State.

ignacio moralejo menendez is an associate professor of commerciallaw at the University of Saragossa, Spain. He has taught in several otherSpanish and Latin-American universities. He was appointed member of theAragon Antitrust Public Agency and Chairman of the Garrigues Foundationfor Entrepreneurial and Law Studies. He is the author of several monographsand of over a dozen papers published in the most relevant commerciallaw reviews, and participant in several collective publications. His mainresearch areas are company law, bankruptcy regulation, and distributionagreements.

nobuo nakamura is a professor of company law at the School ofCommerce of Waseda University, Tokyo, Japan and, in addition, sits onthe executive committee of the Japan Corporate Governance Network. Hewas a visiting scholar at the Institute of Advanced Legal Studies, London,UK. He served as a member of the executive committee of the JapanCorporate Governance Forum until December 2011 and contributed to thedraft of the New Corporate Governance Principles (December 15, 2006).

peter j. nikolicza is a diplomat at the permanent representationof Hungary to the European Union, Brussels, Belgium. He has a Dr. iur.from ELTE University of Budapest, Hungary, an LL.M. from Harvard LawSchool and an LL.M. from the University of Heidelberg, Germany. He hasworked for the Hungarian Ministry of Justice, the European Commission

contributors xv






(DG Markt) as well as for law firms in Budapest, Düsseldorf, and Heidelberg.During the 2005–2006 Hungarian corporate law reform, the LegislativeCommittee of the Ministry of Justice discussed his papers on comparativecorporate group law.

arthur r. pinto is a professor of law and co-director of the Dennis J.Block Center for the Study of International Business Law at Brooklyn LawSchool. He teaches agency and partnership, contracts, comparative corpor-ate governance, and corporations. He is the co-author of UnderstandingCorporate Law, 3rd edn (2009) and co-editor of The Legal Basis of Compara-tive Corporate Governance in Publicly Held Corporations (1998). He hasbeen a visiting professor at New York University and George WashingtonLaw Schools and a frequent visiting lecturer on American corporate andsecurities law at LUISS University in Rome, Italy.

knut b. pissler is a senior research fellow at the Max Planck Institute forComparative and International Private Law in Hamburg, Germany. He hasstudied law at the Maximilians-Universität in Würzburg (1991–1993), andlaw and sinology at the University of Hamburg (1993–1996, MagisterArtium 2007). He has studied Chinese and done research on Chinese lawat the Sino-German Institute for Legal Studies of the University of Nanjing(1996–1997 and 2000–2002). In 2003 he received a Ph.D. from Hamburg.He is lecturer on Chinese law at the University of Göttingen (since 2007) andat the University of Cologne (since 2011).

michael c. schouten is a lecturer and a Ph.D. candidate at the Univer-sity of Amsterdam and a lawyer at De Brauw Blackstone Westbroek inAmsterdam, the Netherlands. His research relates to shareholder votingand has been published in journals such as the Columbia Business LawReview and the Stanford Journal of Law, Business & Finance. He has beena visiting scholar at Columbia Law School and Cambridge University, andwas selected for the 2010 Harvard-Stanford International Junior FacultyForum.

beate sjafjell, professor dr. juris at the University of Oslo, Facultyof Law, Norway, is the author of Towards a Sustainable European CompanyLaw. A Normative Analysis of the Objectives of EU Law, with the TakeoverDirective as a Test Case (2009). She is the head of the research group“Companies, Markets, Society and the Environment” at the Faculty of Lawin Oslo, and of the research project “Sustainable Companies.” She has

xvi contributors






written a number of papers on EU company and securities law and theintegration of sustainable development.

stanisław sołtysinski is a professor and former dean of the Faculty ofLaw of A. Mickiewicz University, Poznań, Poland. LL.M. from ColumbiaLaw School. Chairman of the working group that drafted the Code ofCommercial Companies of 2000. Member of Poland’s Codification Com-mission. Visiting professor, inter alia, in Pennsylvania, Frankfurt, Brugge,and Munich. Member of the European Model Law Group and the EuropeanCompany Law Expert Group. Elected to the European Academy of Sciences(Salzburg) as well as the Art and Academia Europaea (London). Member ofthe UNIDROIT Governing Council. His publications include fifteen booksand more than 290 articles.

wang-ruu tseng is a professor of law at the College of Law, NationalTaiwan University, Taiwan. She has a Ph.D. in law from the University ofLondon, as well as an LL.M. from Harvard. She is a qualified attorney inTaiwan, specializing in company law, securities regulation, financial services,and markets regulations. She has published numerous books in the above-mentioned fields, such as Reconstructing the Fundamentals of Company Law(2011). Her books and articles have been granted with the Award of NTUExcellent Journal and Outstanding Books many times. She is the govern-ment appointed director of the Taiwan Stock Exchange.

wen-yeu wang , LL.B. and LL.M. (National Taiwan University), LL.M(Columbia), J.S.D. (Stanford University), has been teaching at NTU since 1995.Practiced previously commercial law at Lee and Li, Taipei, and Sullivan &Cromwell, NYC. Served as a director of the Center for Corporate and FinancialLaw at NTU. Research areas include business associations, financial regulation,business transactions, and economic analysis of law. Author of ten books; articles,inter alia, in theWashington LawReview and theColumbia Journal of Asian Law.Committee member of the Asian Law and Economics Association. Chairman ofthe Taiwan Committee, International Academy of Comparative Law.

ana c. weber is a junior partner at Carvalhosa & Eizirik Advogados. Shehas a master’s degree in law from the State University of Rio de Janeiro,Brazil. She has recently published the article “Confidentiality in StatutoryArbitration” in the Brazilian newspaper Valor Econômico and the article“The Telco Case Analyzed in Light of Conflicts of Law” in the BrazilianBusiness Law Review.

contributors xvii






jaap w. winter is a professor of international company law at theUniversity of Amsterdam, the Netherlands, and a professor of corporategovernance at the Duisenberg School of Finance. He is the former Chairmanof the EU High Level Group of Company Law Experts and a former memberof the Dutch Corporate Governance Committee and the European Corpor-ate Governance Forum. He was a member of the Netherlands Authority forthe Financial Markets’ supervisory board for several years and is practicingas a lawyer at De Brauw Blackstone Westbroek in Amsterdam.

xviii contributors






PREFACE

The business corporation is one of the greatest organizational inventions,but it creates risks both for shareholders and for third parties. To mitigatethese risks, legislators, judges, and corporate lawyers have at all timestried to learn from foreign experiences and adapt their regulatory regimesto them. Corporate law is therefore a prime exemplar for the comparativelaw approach: US corporation law has evolved from European pre-cedents, the German states copied many provisions from the FrenchCode de Commerce, and Japan adopted rules from Germany. These arejust a few prominent examples. In the last three decades, the comparativeapproach has grown into an interdisciplinary and international move-ment that led to a stream of law reforms, client memoranda, law reviewarticles, and international conferences unseen before. Corporate govern-ance, the system by which companies are directed and controlled, istoday one of the key topics for legislation, practice, and academia aroundthe world.

The origins of the present volume on Comparative CorporateGovernance lie in the XVIIIth International Congress of ComparativeLaw/Le XVIIIe Congrès International de droit comparé of the Inter-national Academy of Comparative Law/L’Académie Internationale dedroit comparé in Washington, DC from July 25, 2010 to August 1,2010. The Congress devoted one section to “Commercial law/Droitcommercial,” and within this section one group of international lawyersfocused on “Corporate Governance/Le gouvernement d’entreprise.” KlausJ. Hopt, the General Reporter nominated by the International Academy,prepared a questionnaire (reprinted in this volume on pp. 1093–1102), towhich corporate lawyers from all over the world (principally chosen bythe Academy) responded with thirty-one country reports. These reportsgave detailed accounts of the corporate governance regimes of Argentina,Australia, Austria, Belgium, Brazil, China, Croatia, Denmark, Finland,France, Georgia, Germany, Greece, Hungary, Ireland, Italy, Japan,Luxembourg, the Netherlands, Norway, Poland, Portugal, Serbia, South

xix






Korea, Spain, Sweden, Switzerland, Taiwan, Turkey, the UK, and the US.Building upon both the country reports as well as current scholarship inlaw and economics, Klaus J. Hopt composed then the subsection’sGeneral Report (this volume features a considerably updated andextended version on pp. 1–101).

Corporate scandals and financial crises have again and again high-lighted the need to better understand the economic, social, political, andlegal determinants of corporate governance in individual countries.Without reliable information, though, comparative law studies reachtheir limits rather quickly. The main hurdle is the language barrier: todate, the international discussion focuses on a few prominent countries,such as the US, the UK, France, Germany, or Japan. For other countries,there is either no information in English available or it is not easilyaccessible for the international observer. This is unfortunate becausesmaller countries are often more willing than larger jurisdictions to takethe risk of new approaches, so that their corporate governance regimesdeserve more attention than they have received so far. In order to helpclose this gap in the corporate governance literature and to further thecomparative approach, Klaus J. Hopt as the General Reporter invitedAndreas M. Fleckner to join him as a co-editor and to develop theconference materials into a volume that presents the current state ofcorporate governance around the world. Following consultations withthe publisher, especially regarding the scope and the length of theenvisaged book, the editors selected twenty-three country reports, senttheir respective authors suggestions for amendments and changes, andasked them to update their manuscripts to reflect the law as of January2011. Occasionally, the editors let the authors include more recentdevelopments if they significantly altered a country’s corporate govern-ance regime, but in general the editors tried to keep the volume as of thesame date to facilitate comparative studies.

The result of these efforts is a volume that offers, as the subtitle states,A Functional and International Analysis by bringing together currentscholarship in law and economics (Part I, pp. 1–101) with the expertiseof local corporate governance specialists from twenty-three countries(Part II, pp. 103–1092).

Part I combines a functional comparative analysis of corporate gov-ernance regimes from all over the world with the most recent insightsfrom the law and economics literature. Readers of this part will gain ageneral idea of the world’s corporate governance rules and will makethemselves familiar with the leading corporate governance literature.

xx preface






Takeover law, though an essential part of external corporate governance,is left out because the feedback from the individual countries was ratherheterogeneous.

Part II allows readers to study the corporate governance regimes ofa wide range of countries, including those with different ownershipstructures (such as the US or the UK on the one side, and France orGermany on the other), major economies (such as the US or Germany),dynamic emerging markets (such as Brazil or China), and smallercountries with interesting approaches (such as Australia or Norway).While the ownership structure or similar aspects may be suitable cat-egories to organize a volume like the present, the editors have refrainedfrom employing these or other qualitative criteria (such as legal family orleaders and followers in the corporate governance movement). Instead,the volume follows geographical and alphabetical principles, to make iteasy for readers to find the countries whose corporate governanceregimes they want to study. Why include as many as twenty-threecountries? The editors believe, as mentioned earlier in this preface, thatthe comparative approach is contingent upon reliable information frommore than a handful of arbitrarily chosen countries, to account fordifferences and similarities in jurisdictions from various continents,different economies and cultures, diverse traditions, and distinct legalfamilies. A key factor in this regard is the background of the authors:the national reporters are all corporate law and governance experts fromthe country they are dealing with in their chapter. Readers can thereforebe confident that the contributors to the present volume are familiar withboth the legal regime as well as its economic and social setting (unlikemany other corporate governance studies, which build upon the data ofinternational scholars with no or no comparable legal experience).

All country chapters follow more or less the same method, i.e. afunctional instead of a merely doctrinal or descriptive approach, andthe same structure, i.e. the questionnaire prepared by the GeneralReporter for the conference in Washington (Part III, pp. 1093–1102).This common conceptual basis will especially appeal to readers who wantto follow certain issues, for instance the composition of the boards or therole of the shareholders, for several jurisdictions. In addition, all countrychapters feature an annex with a selection of the jurisdiction’s keycorporate governance cases, its main corporate governance literature,and other country-specific sources, such as information on the compe-tent supervisory authority. While the questionnaire and, later, the publi-cation concept of this volume provided for a common framework, it was

preface xxi






of course left to the authors to decide where they followed the generalguidelines and where they preferred to adhere to local conventions. Anysuch deviations from the common path should be welcomed as first-handaccounts of a country’s corporate governance system, not as an “incon-sistency” in the context of this volume. After all, different styles andmethods often give a first idea of why the law may differ as well.

The book follows – in a loose way – a number of similar conferencesand volumes that, taken together, reflect the progress that the compara-tive approach has made over recent years, such as Comparative CorporateGovernance: The State of the Art and Emerging Research (edited by KlausJ. Hopt et al., 1998), Reforming Company and Takeover Law in Europe(edited by Guido Ferrarini et al., 2004), and Corporate Governance inContext: Corporations, States, and Markets in Europe, Japan, and the US(edited by Klaus J. Hopt et al., 2005) as well as Comparative CorporateGovernance of Non-Profit Organizations (edited by Klaus J. Hopt andThomas von Hippel, 2010).

The editors would like to use this opportunity to express their grati-tude not only to the authors but also to the many people behind thescenes that contributed to the genesis of this volume. Nina Marie Güttleras well as Christian Jung and Edda O’Hara, all of the Max PlanckInstitute in Hamburg, organized the exchange with the authors andprepared the manuscripts for publication. That the heterogeneous col-lection of country reports became one consistent volume is largely theiraccomplishment. The editors have also been fortunate to benefit from thecomments, ideas, and thoughts of Kim Hughes, Lorenza Toffolon, andRichard Woodham, all of Cambridge University Press. The publicationof a book like the present volume can be a long and painful process, butwith them it was a pleasure and delight at any time. Last but not least, theeditors are very grateful to Kate Ollerenshaw and Kristen Zetzsche. Bothread the entire manuscript very carefully, polished the non-nativespeakers’ English, and corrected many spelling errors.

Andreas M. Fleckner and Klaus J. HoptHamburg, Germany

December 2012

xxii preface






ABBREVIATIONS

Ab Privat aktiebolagAbp Publikt aktiebolagABS Australian Bureau of StatisticsACLC Australian Company Law CasesACSI Australian Council of Superannuation InvestorsACSR Australian Corporations and Securities ReportsADAM Association de défense des actionnaires minoritairesADC Anuario de derecho civilAFEP Association française des entreprises privéesAFG Association française de la gestion financièreAFGC Audit Firm Governance CodeAFJPs Administradoras de Fondos de Jubilaciones y PensionesAFM Autoriteit Financiële MarktenAFS Act on Financial SupervisionAFSA Audit Firms Supervision ActAG Aktiengesellschaft; Die AktiengesellschaftAGM Annual general meetingAGREF Association des grandes entreprises françaisesAICD Australian Institute of Company DirectorsAIM Alternative Investment MarketAJP Aktuelle Juristische PraxisAKEIÜ Arbeitskreis Externe und Interne Überwachung der Unter-

nehmungAktG AktiengesetzALFI Association Luxembourgeoise des fonds d’investissementsALI American Law InstituteALJR Australian Law Journal & ReportsALR Australian Law ReportsAMF Autorité des marchés financiersAnn. dr. Lux. Annales de droit LuxembourgeoisANSES Pension Funds National AdministrationAPRA Australian Prudential Regulation Authority

xxiii






Arr. ArrêtéARUG Gesetz zur Umsetzung der AktionärsrechterichtlinieASA Australian Shareholders AssociationASFFI Association des sociétés françaises de fonds et

d’investissementASFR Act on Supervision of Financial ReportingASIP Association suisse des institutions de prévoyanceASX Australian Securities ExchangeAUASB Auditing and Assurance Standards BoardAuslInvG AuslandsinvestmentgesetzAVO AufsichtsverordnungBaFin Bundesanstalt für FinanzdienstleistungsaufsichtBanKV BankenverordnungBB Betriebs-BeraterBBl Bundesblatt der Schweizerischen EidgenossenschaftBCBA Bolsa de Comercio de Buenos AiresBDB Bulletin Droit et BanqueBEHG Börsen-und EffektenhandelsgesetzBGBl. BundesgesetzblattBGE Entscheidungen des Schweizerischen BundesgerichtsBGH BundesgerichtshofBGHZ Entscheidungen des Bundesgerichtshofs in ZivilsachenBIJ Bulletin d’Information sur la JurisprudenceBilMoG Gesetz zur Modernisierung des BilanzrechtsBIS UK Department for Business Innovation and SkillsBJS Bulletin Joly SociétésBKR Zeitschrift für Bank- und KapitalmarktrechtBKV Budapesti Közlekedési Zrt.BM&FBovespa Brazilian Stock, Commodities, and Futures ExchangesB.O. Boletín OficialBOFI Banks and other financial institutionsBörseG BörsegesetzBörsG BörsengesetzBörsZulV BörsenzulassungsverordnungBPN Banco Português de Negócios, S.A.BTDrucks Drucksachen des Deutschen BundestagesBVerfG BundesverfassungsgerichtBVerfGE Entscheidungen des BundesverfassungsgerichtsBX Berne ExchangeC.J. Chief JusticeCA Communicatiekanaal aandeelhouders; Companies Act; Court

of Appeal(s)

xxiv abbreviations






Calif. Corp. Code California Corporations CodeCAMAC Corporations and Markets Advisory CommitteeCASAC Companies and Securities Advisory CommitteeCASS Chinese Academy of Social SciencesCass. Civ. Cour de cassation, chambre civileCass. Com. Cour de cassation, chambre commercialCass. Crim. Cour de cassation, chambre criminelleCass. lux. Cour de cassation du LuxembourgCass. Soc. Cour de cassation, chambre socialeCBA Commonwealth Bank of AustraliaCBFA Commission Bancaire, Financière et des AssurancesCCC Code of Commercial CompaniesCCL Commercial Companies LawCDFH China Development Financial Holding CompanyCEBS Committee of European Banking SupervisorsCEF Centro para la estabilidad financieraCEO Chief executive officerCFD Contracts for differenceCFIUS American Committee on Foreign InvestmentsCFO Chief financial officerCFR Code of Federal RegulationsCGN Corporate Governance NetworkCGS Código de Governo das SociedadesCHF Swiss francCLERP Corporate Law Economic Reform ProgramCLR Commonwealth Law ReportsCME Loi sur la confiance et la modernisation de l’économieCMF Code monétaire et financier; Conseil des marchés financiersCMVM Comissão do Mercado de Valores MobiliáriosCNC Commission des normes comptablesCNMV Comisión Nacional del Mercado de ValoresCNPF Conseil national du patronat françaisCNV Comisión Nacional de ValoresCO Code of ObligationsCOB Commission des opérations de bourseCOO Chief operating officerCPA Certified public accountantCPMA Consumer Protection and Markets AuthorityCR Commercial RegisterCRD III Capital Requirements Directive amendment IIICSA Chinese Securities Association

abbreviations xxv






CSC Código das Sociedades Comerciais; Confédération des syndi-cats chrétiens

CSRC China Securities Regulatory CommissionCSSF Commission de surveillance du secteur financierCth. CommonwealthCVM Código dos Valores Mobiliários; Comissão de Valores

MobiliáriosD&O Directors and officersD. DallozDAH Directive on Ad hoc PublicityDAI Deutsches AktieninstitutDAOR Revue international du droit des affairesDB Der BetriebDBA Danish Business AuthorityDBW Die BetriebswirtschaftDCC Dutch Civil CodeDCG Directive on Information relating to Corporate GovernanceDCGK Deutscher Corporate Governance KodexDel. DelawareDel. Code Delaware CodeDFR Directive Financial ReportingDG Directorate GeneralDGCL Delaware General Corporation LawDIN Deutsche IndustrienormDMT Directive on Disclosure of Management TransactionsDoLR Division of leadership responsibilitiesDr. et patr. Droit et patrimoineDr. pén. Droit pénalDrittelbG Gesetz über die Drittelbeteiligung der Arbeitnehmer im

AufsichtsratDStR Deutsches SteuerrechtDSW Deutsche Schutzvereinigung für Wertpapierbesitz e.V.DTI Department of Trade and IndustryEBA European Banking AuthorityEBOR European Business Organization Law ReviewEBRD European Bank of Reconstruction and DevelopmentECFR European Company and Financial Law ReviewECGI European Corporate Governance InstituteED El DerechoEEA European Economic AreaEFTA European Free Trade AssociationEGAktG Einführungsgesetz zum Aktiengesetz

xxvi abbreviations






EGM Extraordinary general meetingEOROC Estatuto da Ordem dos Revisores Oficiais de ContasEOWA Equal Opportunity for Women in the Workplace AgencyESG European Shareholders GroupEuGH Europäischer GerichtshofEU-VerschG EU-VerschmelzungsgesetzEuZW Europäische Zeitschrift für WirtschaftsrechtEWMI JILEP East–West Management Institute Judicial Independence and

Legal Empowerment ProgramEWS Europäisches Wirtschafts-und SteuerrechtFACPCE Federación Argentina de Consejos de Profesionales en Cien-

cias EconómicasFCAFC Federal Court of Australia Full CourtFDUP Faculdade de Direito da Universidade do PortoFEB Fédération des entreprises de BelgiqueFES Foro ecuménico socialFESE Federation of European Securities ExchangesFGD Fonds de garantie des dépôtsFGTB Fédération Générale du Travail de BelgiqueFIEA Financial Instruments and Exchange ActFIEs Foreign-invested enterprisesFINMA Financial Market Supervisory AuthorityFINMAG FinanzmarktaufsichtsgesetzFINRA Financial Industry Regulatory AuthorityFIRB Foreign Investment Review BoardFM Financiële MarktenFMA Financial Market AuthorityFMStFG Gesetz zur Errichtung eines FinanzmarktstabilisierungsfondsFRC Financial Reporting CouncilFRRP Financial Reporting Review PanelFSA Financial Services Authority; Financial Supervisory AuthorityFSB Financial Stability BoardFSC Financial Supervisory CommissionFSMA Financial Services and Markets AuthorityFTSE Financial Times Stock ExchangeFusG FusionsgesetzGDP Gross domestic productGeS Zeitschrift für Gesellschafts- und SteuerrechtGesAusG Gesellschafter-AusschlussgesetzGesKR Schweizerische Zeitschrift für Gesellschafts- und Kapitalmarkt-

recht sowie Umstrukturierungen

abbreviations xxvii






GesRZ Der Gesellschafter – Zeitschrift für Gesellschafts- undUnternehmensrecht

GIZ Gesellschaft für Internationale ZusammenarbeitGLE Georgian Law on EntrepreneursGmbH Gesellschaft mit beschränkter HaftungGmbHG Gesetz über die Gesellschaften mit beschränkter HaftungGRI Global Reporting InitiativeGSE Georgian Stock ExchangeGSML Georgian Securities’ Market LawGTSM Gre Tai Securities MarketGTZ Gesellschaft für Technische ZusammenarbeitGWR Gesellschafts- und WirtschaftsrechtH.B. House BillH.R. House of RepresentativesH3C Haut Conseil du commissariat aux comptesHFSA Hungarian Financial Supervisory AuthorityHGB HandelsgesetzbuchHUF Hungarian forintICCLR International Company and Commercial Law ReviewIAGO Instituto Argentino para el Gobierno de las OrganizacionesIARSE Instituto Argentino de Responsabilidad Social EmpresariaIAS International Accounting StandardsIASB International Accounting Standards BoardIBEF Instituto Brasileiro de Executivos de FinançasIBGC Instituto Brasileiro de Governança CorporativaICAEW Institute of Chartered Accountants for England and WalesICE Information and consultation of employeesIDEA Instituto para el Desarrollo Empresarial de la ArgentinaIDET Instituto de Direito das Empresas e do TrabalhoIFA Institut français des administrateursIFAC International Federation of AccountantsIFC International Finance CorporationIFRS International Financial Reporting StandardsIFSA Investment and Financial Services AssociationILA Institut Luxembourgeois des administrateursInvÄndG InvestmentänderungsgesetzInvG InvestmentgesetzInvModG InvestmentmodernisierungsgesetzInvStG InvestmentsteuergesetzIOSCO International Organization of Securities CommissionsIPCG Instituto Português de Corporate Governance

xxviii abbreviations






IPO Initial public offeringISAs International auditing standardsISC Institutional Shareholders’ CommitteeISS Institutional Shareholder ServicesIVM Instituto dos Valores MobiliáriosJ.Japan.L. Journal of Japanese LawJA Jurisprudencia ArgentinaJCGF Japan Corporate Governance ForumJCP Jurisclasseur périodiqueJCP E Jurisclasseur périodique, éd. EntrepriseJDE Journal de droit européenJDSC Jurisprudence en Droit des Sociétés CommercialesJITE Journal of Institutional and Theoretical EconomicsJOR Jurisprudentie Onderneming en RechtJORF Journal officiel de la République françaiseJPY Japanese yenJT Journal des TribunauxJZ Juristen-ZeitungKAGG Gesetz über KapitalanlagegesellschaftenKapInHaG KapitalmarktinformationshaftungsgesetzKapMuG Kapitalanleger-MusterverfahrensgesetzKKO Korkein oikeusKMU Kleine und mittlere UnternehmenKonTraG Gesetz zurKontrolle undTransparenz imUnternehmensbereichLIFFE London International Financial Futures and Options

ExchangeLIGFI Luxembourg Institute for Global Financial IntegrityLL La LeyLLC Limited liability companyLLP Limited liability partnershipLMV Ley del Mercado de ValoresLO LandsorganisasjonenLSA Ley de Sociedades AnónimasLSC Ley de Sociedades de CapitalLSE London Stock Exchange; Luxembourg Stock ExchangeLSF Loi de sécurité financièreLTI Long-term incentive schemeMB Moniteur BelgeMEDEF Mouvement des entreprises de FranceMgVG Gesetz über die Mitbestimmung der Arbeitnehmer bei einer

grenzüberschreitenden Verschmelzung

abbreviations xxix






MiFID Markets in Financial Instruments DirectiveMitbestG Gesetz über die Mitbestimmung der ArbeitnehmerModel Bus. Corp. Act Model Business Corporation ActMontanMitbestErgG Gesetz zur Ergänzung des Gesetzes über die Mitbestimmung

der Arbeitnehmer in den Aufsichtsräten und Vorständen derUnternehmen des Bergbaus und der Eisen und Stahl erzeu-genden Industrie

MontanMitbestG Gesetz über die Mitbestimmung der Arbeitnehmer in denAufsichtsräten und Vorständen der Unternehmen des Berg-baus und der Eisen und Stahl erzeugenden Industrie

MOPS Market Observation Post SystemMoRaKG Gesetz zur Modernisierung der Rahmenbedingungen für

KapitalbeteiligungenMSCB Moving Strike Convertible BondMTF Multilateral Trading FacilityNASD National Association of Securities DealersNaStraG Gesetz zur Namensaktie und zur Erleichterung der

StimmrechtsausübungNBG National Bank of GeorgiaNBStraf Nieuwsbrief strafrechtNCCA Cámara Nacional de Apelaciones en lo ComercialNCP Normas Contables ProfesionalesNCPC Nouveau Code de Procédure CivileNED Non-executive directorNHO Næringslivets HovedorganisasjonNIIF Normas Internacionales de Información FinancieraNJ Nederlandse JurisprudentieNJW Neue Juristische WochenschriftNRE Nouvelles régulations économiquesNSWCA New South Wales Court of AppealNSWLR New South Wales Law ReportsNSWSC New South Wales Supreme CourtNTU National Taiwan UniversityN.Y. Gen. Bus. Law New York General Business LawNYSE New York Stock ExchangeNZG Neue Zeitschrift für GesellschaftsrechtNZZ Neue Zürcher ZeitungÖBA Österreichisches BankarchivOECD Organisation for Economic Co-operation and DevelopmentOGH Oberster GerichtshofOJ Official Journal of the European Community/Official Journal

of the European Union

xxx abbreviations






Documents

COMPARATIVE CORPORATE GOVERNANCEassets.cambridge.org/97811070/25110/frontmatter/9781107025110… · Comparative corporate governance: a functional and international analysis / edited