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Reliance on agency-theoretic reasoning has led to substantial theoretical and empirical advances in company law scholarship, but the narrow focus on board-level actors and phenomena has disconnected the analysis of the company from the reality of the economic organisation it is meant to enable and support. We follow Oliver Williamson’s call for a ‘law, economics, and organization’ approach, and build on Elinor Ostrom’s ‘institutional analysis and development’ framework to propose a narrative model of the company in terms of nested levels of governance. We argue that our model works as a positive description of the law as it is, and puts us in a stronger position to evaluate the likely consequences of certain normative interventions, which we illustrate with some observations about ongoing debates in corporate governance. [ABSTRACT FROM AUTHOR]

Equity investment is seen in both dominant and critical corporate law literature as a passive act that carries exclusively instrumental value. This conceptualisation legitimises shareholder paternalism in current UK law and provides support for stakeholder welfarism reforms. Engaging with cogent emerging evidence on the preferences, motivation, and behaviour of contemporary individual investors, we demonstrate that, for the majority of them, equity investment is increasingly experienced as a choice instantiating their personhood, identity, and moral agency, and thus carrying inherent value. Drawing on Hayek's epistemology, we propose a novel interpretation of Rawls's theory of justice, and argue that freedom to own productive property must be included in the list of basic liberties under Rawls's first principle of justice. Therefore, corporate law cannot continue imposing paternalistic restrictions on the configurations of shareholder rights that investors may rationally choose from, and pleas for stakeholder welfarism within corporate law must be rejected. [ABSTRACT FROM AUTHOR]

Directors' duty to act in good faith and to act in the best interests of the company relates to the interests of shareholders held in the company as a separate legal entity. The obligation to act in the best interests of shareholders is potentially bounded by corporate purpose as the office requires directors to act in accordance with the constitution and Companies Act. The origin of the duty is traced to the emergence of permanent capital in the business corporation and the resulting new oaths sworn by directors in the seventeenth and eighteenth centuries with Charitable Corporation v Sutton considered in that historical context. The analysis illustrates that the duty is not owed to shareholders collectively at any time, but rather to the company as a separate entity from its shareholders. The interests of shareholders are held in the company as its capital base. The duty is considered in relation to the even longer-standing obligation that officers of corporations act faithfully to ensure compliance with the corporation's charter. The article concludes that the re-inclusion of purpose provisions in company constitutions combined with recognition that the modern company is an entity rather than contractual could significantly influence the application of the good faith and best interests duty. [ABSTRACT FROM AUTHOR]

This article discusses deficiencies in existing models of the company. It outlines three immutable layers of corporate ontology and argues for a mental model of the company based on general systems theory. The model reveals that each company has at its heart a managerial hierarchy which controls corporate actions through direct and indirect means. The most important participants in the everyday life of the company are its senior and middle managers. Consequently, greater emphasis needs to be placed upon managers' corporate governance/compliance responsibilities. The legislature should provide for an obligation on companies to engage in risk-mapping and an obligation on managers to ensure, within their areas of responsibility, compliance with the law. [ABSTRACT FROM AUTHOR]

An introduction is presented in which the editor discusses articles within the issue on topics including institutional theory for corporate law, attribution mechanisms for corporate misconduct, managerial practices and corporate law, and rules governing derivative actions and unfair prejudice claims.

It is difficult to advance the ESG agenda using company law, especially in common law legal systems. Cases show that directors' duties require directors to prioritise the 'interests of the company', which is equated with 'shareholders' interests as a whole', whether under the traditional common law or, for the UK, under the codified section 172 of the Companies Act 2006. In addition, when determining if directors have acted in the interests of the company, judges typically decline to examine the merits of a business decision, focusing instead on the decision-making process. What this means is that even if directors must take ESG considerations into account, courts have held that the duty to act in the company's best interests does not impose a positive duty for directors to adopt aggressive ESG focused strategies. We argue that this has always been and should continue to be the correct judicial approach. [ABSTRACT FROM AUTHOR]

The practice of corporate management is not wholly prior to the legal interventions which have sought to shape it since the first emergence of modern industry. A genealogical case study of mine safety legislation discloses the coevolutionary dynamic through which corporate law and practice have been mutually adjusted over time. Revealing the juridical roots of management highlights the importance of law as a normative grounding for the economy. It also validates a neo-realist conception of corporate law, which understands law to be part of the social reality which it constructs. Viewing law this way clarifies the issues at stake in notions of corporate responsibility, both in history, when the vertically integrated business corporation was in the process of being formed, and under current conditions, when it is fragmenting. [ABSTRACT FROM AUTHOR]

Following the enactment of the Corporate Sustainability Reporting Directive and the creation of the European Sustainability Reporting Standards (ESRS rules), the European Union has set a new regime of mandatory corporate sustainability reporting in motion. However, most of the ESRS rules will be mandatory depending on, or subject to, the assessment of double materiality. This article sheds light on the double materiality requirement. More particularly, the analysis focusses on the materiality assessment of the impacts of corporate actions, the challenges involved in such determination, and the associated legal risks. Challenges examined include the legal risk in the company-stakeholders engagement process, the accuracy and completeness of reporting, and the uncertainty about the legal criteria for determining impact materiality. This article recommends (1) that a sound legal strategy guide the company-stakeholders interaction regarding external impacts, (2) that enforcement strategies be designed to accommodate unintentional greenwashing, and (3) that assurance practices for sustainability reporting be expeditiously implemented. [ABSTRACT FROM AUTHOR]

This article argues that there is a conundrum at the heart of the company law understanding of ostensible minority protection mechanisms (the derivative claim and unfair prejudice): they are terrible at protecting those that they are thought to protect. The hurdles to access the remedies are too high, there is undue focus on the behaviour of the wronged party, costs are uncertain, and relief inadequate. This conundrum can be resolved by applying an institutional analysis and exploring the rules from the perspective of the company. Here, a number apparent weaknesses in the regime are mostly strengths for the company. The remedies are important for the company as they act as a 'lightning rod': all complaints by disgruntled shareholders are funnelled through these hegemonic argumentation structures, which protect the institutional arrangement of the company and, in turn, that part of the institutional environment which is company law. [ABSTRACT FROM AUTHOR]

Notwithstanding the prevalent facets of shareholder stewardship as a market concept, this paper advances the argument that there is another constitutive - though well hidden - element that is more apt to fully grasp its distinctive features and better inform market and public policy initiatives. This element regards stewardship's essence as a social norm. Indeed, what this article calls the 'stewardship sociality' offers original insights into the dynamics developing between different stewards. In parallel, building upon the premises of a real entity theory of company law, this paper explores the social interactions within and between stewardship groups, by demonstrating that their autonomous action requires a minimally coercive response from law. It is thus 'stewardship autonomy', as it is called in this paper, that suggests that any legal reform needs to be confined in soft law instruments that depict the sociality of stewardship within a constantly evolving global landscape. [ABSTRACT FROM AUTHOR]

The increasingly influential 'universal owner' theory posits that index funds have incentives to reduce cross-firm externalities to maximise portfolio value. We develop a more general conceptual framework for understanding how firms' ownership structures and company law affect the internalisation of cross-firm externalities. This approach takes account of the fact that across the world most firms have controlling shareholders. We introduce the concept of 'controller wealth concentration' as a determinant of controllers' pecuniary incentives to internalise externalities. Our framework suggests that, in principle, dual class (and other controlling minority) structures have the hitherto ignored advantage of allowing controllers to diversify their personal wealth (thereby potentially mitigating cross-firm externalities). We provide some evidence that controllers' personal wealth is nonetheless typically undiversified and discuss possible reasons why controllers fail to diversify. We conclude that controlling shareholders typically have weak pecuniary incentives to internalise externalities, underscoring the importance of government regulation of externalities. [ABSTRACT FROM AUTHOR]

There is ongoing interest in understanding share ownership and control dynamics in publicly listed companies, given the governance and regulatory implications arising therefrom. This article presents a new empirical analysis of shareholder data, focusing on the largest 50 publicly listed companies in Australia, filling a striking gap in the existing literature. Specifically, the following issues are investigated within each company: 1. The level of institutional ownership within the largest 20 registered shareholders; 2. The percentage of issued capital owned by the largest three registered shareholders; 3. The control of that ownership, to determine the extent to which ownership and control diverge; and 4. Substantial shareholding information is collected and analysed, in order to reduce the information gap which exists between ownership and control, and to provide a more complete picture of shareholding patterns. Several explanatory factors behind the identified landscape and the implications arising from the findings are then discussed. [ABSTRACT FROM AUTHOR]

UK common law recognises that directors owe a fiduciary duty to consider creditors' interests when a company is insolvent or in financial difficulty. However, the scope of this duty remains unclear, particularly the degree of financial difficulty necessary for it to arise. In 2022, in BTI v Sequana, the Supreme Court did little to resolve these uncertainties, retaining a context first approach, where the duty's triggering point is based on the facts and the risk borne by creditors in the specific case. In contrast, Ireland codified its creditor duty in 2022, setting out a series of legislatively defined financial situations where the duty applies and what the duty entails. This article argues that while a search for complete doctrinal certainty in this area is misguided, a degree of certainty over and above the position in Sequana can be achieved and that Ireland's codification offers valuable lessons for future UK reform. [ABSTRACT FROM AUTHOR]

An introduction to the journal is presented in which the authors discuss the various topics within the issue, including corporate law, traditional corporate liability mechanisms, mine safety laws, and corporate management.

The distress wreaked on small businesses by the Royal Bank of Scotland's turnaround division, the Global Restructuring Group, is one of the most egregious examples of bank misconduct in recent decades. Such misconduct invites reflection on the role of commercial banks in the creation and use of money. To what ends and by what means do commercial banks perform this role? This article considers ends in the sense of whose interests banks ought to serve; and it considers means in the sense of the allocation of decision-making authority. It then turns to the drama of RBS after 2008 to document how allocations of decision-making authority by corporate law and secured transactions law benefited short-term financial interests to the detriment of RBS's small business customers. It concludes by suggesting an alternative distribution of decision-making authority to counteract such short-term financial interests. [ABSTRACT FROM AUTHOR]

The statutory statement of directors' duties contained in the Companies Act 2006 imposes a duty on directors to 'only exercise powers for the purposes for which they are conferred'. The duty has been equiparated with the equitable fraud on a power doctrine. This paper challenges the correctness of this approach, and argues that the unwarranted 'merging' of the duty and the doctrine has resulted in a legal chimera standing in the way of a proper understanding of the roles of each of the duty and the doctrine. It is submitted that this erroneous linking of two entirely different concepts is the result of a failure to (i) separate the different measures that have evolved to control directorial exercise of corporate powers, and (ii) pay due heed to the distinctive nature of the devolution of corporate power. [ABSTRACT FROM AUTHOR]

This article argues that the prospects for Artificial Intelligence (AI) to impact corporate law are at once over- and under-stated, focusing on the law of Delaware – the predominant jurisdiction of incorporation for US public companies. Claims that AI systems might displace human directors not only exaggerate AI's foreseeable technological potential, but ignore doctrinal and institutional impediments intrinsic to Delaware's competitive model – notably, heavy reliance on nuanced applications of the fiduciary duty of loyalty by a true court of equity. At the same time, however, there are discrete AI applications that might not merely be accommodated by Delaware corporate law, but perhaps eventually required. This would appear most likely in the oversight context, where loyalty has been interpreted to require good faith effort to adopt a reasonable compliance monitoring system, an approach driven by an implicit cost-benefit analysis that could lean decisively in favour of AI-based approaches in the foreseeable future. [ABSTRACT FROM AUTHOR]

This article provides a comparative perspective on the issue of directors' liability for actions by a company which causes or contributes to human rights impacts. International, European and national regulatory developments in business and human rights are influencing company law. This article will consider directors' duties in relation to the meaning of 'the best interests of a company' and how the expectations on directors from various stakeholders are changing due to legislation, court decisions and practice. Based on this, there is an analysis of the link between directors' duties and human rights due diligence, and about access to remedy for the victims of actions arising from the acts or omissions of directors, including any decisions made by directors without proper regard for the human rights of those affected by the company's activities. It considers what might be the personal liabilities of directors in this area and possible ways forward, including in relation to probable EU regulation on this area. [ABSTRACT FROM AUTHOR]

This article documents elements of COVID-19-inspired company legislation on digital participation of shareholders in general meetings in 22 countries and analyses to what extent such legislation can function as a blueprint for law reform. Lawmakers need to strike a balance between ensuring a smooth general meeting (from management's perspective) and protecting shareholders' rights. COVID-19 legislation with regard to shareholder interventions has lacked this balance. Further, crisis legislation, adopted in haste as it was, could not reflect the fundamental shift towards institutionalized shareholdings. Once adopted, there is a risk that the hasty choices made during COVID times will stick, resulting in suboptimal regulation of shareholder meetings. The crisis legislation on meetings should thus be revisited, reflecting three paradigm shifts in corporate governance, namely the form of the meeting (virtual instead of in-person), its temporal dimension (multi-day process instead of a specific meeting day), and the institutionalisation of ownership, which allows investors to deploy resources and technology unavailable to most individuals. [ABSTRACT FROM AUTHOR]

In July 2019, Hong Kong issued a comprehensive regulation on robo-advisors in the capital markets, with a view to striking a balance between investor protection and innovation promotion. This regulation has generated some noticeable positive impact on the market, but some problems remain to be addressed. It is critically assessed by way of a comparison with the laws in the US, the UK, Singapore, and Mainland China. It has strengths in terms of regulatory form and approach, the comprehensiveness of guidance provided and clear allocation of responsibility. There are also several weaknesses and challenges. Firstly, greater efforts need to be made to ensure proper compliance and enforcement. Secondly, more attention should be paid to the increasing complexity of algorithms. Thirdly, the issue of outsourcing arrangements requires further thoughts. Finally, Hong Kong should consider a staged reform on its financial regulatory architecture to address the issue of regulatory arbitrage. [ABSTRACT FROM AUTHOR]

The extensive literature on strategic climate litigation focuses mainly on lawsuits brought against private litigants or the state based on breaches of environmental law, tort law, human rights law or public law. Relatively far less has been written about corporate and securities litigation against companies or their directors, let alone in relation to Asia. This article fills these gaps. It critically examines whether and how the enforcement of corporate law and securities law can be used as a tool to address climate-related risks in three leading common law jurisdictions in Asia – India, Singapore, and Hong Kong. The central argument of this article is that because of the limitations of private and public enforcement of corporate law, public enforcement of securities law and listing rules is a more effective mechanism in addressing climate risks in the three jurisdictions. [ABSTRACT FROM AUTHOR]

The Insolvency and Bankruptcy Code (IBC) of India which offers a mode of reorganisation for distressed corporations prevents promoters and directors with non-performing assets from submitting plans to rescue their company. This provision is contained under section 29A of the IBC. Judicial interpretation has required corporate reorganisations under India's Companies Act to give effect to the limitations under section 29A as well. The introduction and application of section 29A is reflective of a broader scepticism towards allowing promoters and directors whose companies entered financial distress from regaining control. This article evaluates whether section 29A has addressed the problems it had set out to and finds that some ineligibilities prescribed for the incumbent management under section 29A can be relaxed. It also uses the example of the United Kingdom's insolvency regime (with which India bears similarities) to explain why resolution plans from the incumbent management should not be disallowed. [ABSTRACT FROM AUTHOR]

The dual-class structure tends to increase the agency costs associated with concentrated ownership, such as those stemming from self-dealing and poor-quality management. While corporate law addresses some agency problems, it is unable to eliminate all agency problems without unduly restricting the freedom of corporate controllers to manage their firms. This article uses theory-based and empirical approaches to demonstrate that a specific type of sunset clause may strike the right balance between, on the one hand, addressing agency problems and, on the other hand, providing an effective incentive for controllers of dual-class companies to increase firm value over the long term. The article evaluates current regulatory responses to the dual-class structure in selected jurisdictions and concludes that the existing arguments against mandatory sunset rules may be flawed. We suggest that a time-based sunset rule may be suitable for high-tech and innovation startups characterised by high-growth rates and low profitability. [ABSTRACT FROM AUTHOR]

Information asymmetry between shareholders and corporate managers can subvert contemporary calls for increased institutional investor oversight. Information asymmetry can also arise between minority shareholders and controlling shareholders. This article examines the trajectory of shareholder inspection rights in Australia. It evaluates the effectiveness of an important shift in the 1980s from the narrow and prescriptive U.K. common law inspection right to a statutory regime, which confers broad discretion on the courts to decide whether inspection is appropriate. The article also explores the tension between inspection rights (which provide individual shareholders with access to non-public company information) and modern securities laws which promote market integrity by preventing selective disclosure of material information by listed entities. The Australian experience provides international law makers and researchers with important insights into the efficacy and implications of different models of regulating shareholder inspection rights. [ABSTRACT FROM AUTHOR]

The resolution of insolvency of small and medium-sized enterprises ('SMEs') has attracted much attention and criticism globally. Studies from around the world suggest that regular insolvency law fails to address the particular needs and challenges of SME financial distress. China has recently introduced simplified rules aimed at improving the resolution of insolvent SMEs. This article examines these rules and assesses how well they address the identified needs and challenges faced by insolvent SMEs. It considers how the examined rules differ from regular insolvency law and how they compare with the broader international best practice and guidance for SMEs. The discussion evaluates new solutions and tools that have been used in China, their effectiveness and impact both on paper and based on the outcomes in practice. The article concludes by identifying eight lessons for other jurisdictions which are trying to improve resolution of SME insolvencies. [ABSTRACT FROM AUTHOR]

Weak incentives to invest in shareholder oversight and limited resources confine stewardship by large institutional investors. According to an influential argument, activist shareholders can offer a solution by supplying large investment (asset) managers with company-specific information. This article questions the potential informational role of traditional activist campaigns initiated by hedge funds – the most prominent group of activist shareholders – for the purposes of stewardship by large institutional investors by showing that these two groups of shareholders have different visions of stewardship with little scope for interactions. Consistent with this argument, data from the FTSE 350 companies, the UK's largest listed firms, show that associations between activist demands and the voting behaviour of top investment managers vary based on activist types and demand topics. Demands initiated by hedge funds and on business and operating matters receive less support. These findings have important implications for shareholder stewardship and for corporate law reform. [ABSTRACT FROM AUTHOR]

Small and medium enterprises (SMEs) are important to most economies, but the laws of close corporation entities used by SMEs are underrepresented in comparative corporate law scholarship. This Article critically analyses 'withdrawal' regimes in Germany's GmbH (Austritt aus wichtigem Grund) and the UK's private company limited by shares (unfair prejudice remedy) that respond to shareholder conflicts in close corporations. Comparative analysis reveals how the two jurisdictions differ in treatment of 'non-fault' scenarios and their underlying visions of shareholder protection. Potential reform of the UK's withdrawal regime based on German and Singapore law is also explored. [ABSTRACT FROM AUTHOR]

In the UK Listing Review it is suggested that the LSE should allow companies with dual class share (DCS) structures to list on the Premium segment. In this paper, we discuss this proposal. First, we present an overview of the DCS-debate together with the proposition in the Review to allow for DCS-listings under certain conditions. Second, we discuss the arguments that are made against DCS-listings. For the sake of comparison and reference, we then give an overview of the Swedish DCS-regulation. From there, we discuss the conditions for DCS-listing recommended in the Review. Our conclusion is that several of the DCS-listing conditions suggested might not only hinder DCS-structures from being useful for companies that wish to utilise such structures but would in several cases disable the corporate governance mechanisms that would otherwise counteract several of the problems that DCS-structures can give rise to, most prominently the market for corporate control. [ABSTRACT FROM AUTHOR]

The World Bank's Doing Business project encourages the reduction of business registration requirements to stimulate entrepreneurship and economic development. Over the last two decades, it has contributed to the harmonisation of these requirements worldwide, but the rates of newly registered firms have not always followed through. Its unparalleled influence and emphasis on procedural reforms shadowed the development and comparative evaluation of alternative incentives to entrepreneurship. This article contributes to filling this gap, by empirically examining the impact of simplified corporations, legal forms designed to stimulate entrepreneurial activity in Chile and Colombia. These new corporate forms provide not only abbreviated registration and operation rules, but also single ownership and the ability to issue classes of shares, two features that remain unavailable in many jurisdictions. The results confirm that company law reforms – both procedural and substantive – are insufficient to significantly increase the annual number of newly registered firms. Still, simplified corporations have quickly become entrepreneurs' preferred legal form in those countries, contributing to expanding new businesses' access to external finance. [ABSTRACT FROM AUTHOR]

The community interest company (CIC) is designed for private actors seeking to engage in pro-social entrepreneurship and investment for public benefit. Although there are a handful of studies that focus on the CIC, knowledge gaps remain in the legal literature. The aim of this article is to fill two of those gaps. First, it shines a spotlight on the political drivers that spurred the CIC. Second, it offers a comprehensive analytical model of the CIC. [ABSTRACT FROM AUTHOR]

Scottish limited partnerships (SLPs) have been the focus of much negative attention. Recent developments appear to have slowed the speed of incorporation of new SLPs. However, this article argues that current reforms may not help tackle existing fraudulent SLPs. This does not matter: viewing SLPs as general partnerships with some additional features, arguably fraudulent SLPs have ceased to exist, and offshored SLPs may have lost their separate legal personality. That this has been so far missed can be traced to current organisational theory. This article identifies the implications of reconceptualising the SLP for wider organisational theory and identifies options for state gift thinkers to reformulate their wider claims. Either the claim that separate legal personality derives from the state needs to be diluted to near tautology, or it needs to be limited in geographical extent. [ABSTRACT FROM AUTHOR]

Material Adverse Change/Effect ('MAC') has become an important yet chaotic legal concept. With its vague definition and multi-functional objectives on the one hand, and dramatic consequences arising from the instability of the global financial system, terrorism, Brexit, and COVID-19 on the other hand, the significance of MAC has grown. The article analyses the uncertainty surrounding MAC under English law, critically investigating MAC and its future in debt finance and M&A following Delaware's ground-breaking decision in Akorn v Fresenius and the more recent decision in Channel Medsystems v Boston Scientific. The article argues (i) for a growing ex-ante and ex-post practical importance of MAC; (ii) that Delaware MAC principles could be a relevant reference for resolving English MAC uncertainties, provided one considers the specifics of MAC, in both jurisdictions, and in M&A and debt finance; and (iii) that there is no overarching model for correctly applying MAC, in debt finance or M&A. [ABSTRACT FROM AUTHOR]

It is often assumed that judges are reluctant to review directors' business judgments, which contributes to a lack of director accountability, particularly in large companies. This claim has never been systematically interrogated. This paper therefore analyses English and Welsh cases to ascertain whether judges do review and impose liability for directors' judgments, whether this has altered from the mid-nineteenth century until the present, or varies by cause of action, and what types of company or claimant are involved. It finds that challenges to business judgment have been successful over the whole time period, with a marked increase in legal liability since 2007. This cannot be linked to changes in substantive law, but probably a greater willingness by claimants in insolvent companies to mount challenges to business judgment. Nevertheless liability levels remain low, and largely confined to private companies. [ABSTRACT FROM AUTHOR]

The derivative action is widely acknowledged to be an important part of corporate law and governance. Over a quarter century after the statutory derivative action landed in Singapore and almost five years after reforms extended it to listed companies, the time is ripe to investigate a fundamental question: what is the reality of Singapore's statutory derivative action? Drawing on unpublished data on Singapore companies and a hand-collected dataset of all publicly available judgments on statutory derivative actions in Singapore from 1993 to 2018, my study reveals that litigation rates are generally low. This article explains why derivative actions remain rare and unlikely for listed companies in Singapore, and also offers insights into how context-specific, non-financial factors affect shareholder litigation. The statutory derivative action plays a distinctive and valuable role in closely-held companies – in spite of poor financial incentives to sue, and the availability of alternative remedies. [ABSTRACT FROM AUTHOR]

Business organisation still reflects and reproduces the dated idea of 'economic growth as progress' irrespective of its social hazards. Recalibrating the grounding of business organisation's legitimacy requires radical legal reform in order to accommodate the relegation of growth as a lower order objective. However, this article shows that the normative debate in corporate law scholarship is unable to resolve the legitimacy problem of business organisation and ultimately reflects and reproduces the ideal of 'growth as progress'. The problem is corporate law per se. Thus, the article argues that, even if these normative difficulties could be surpassed, instituting a new legitimacy for business organisation through corporate law reform - the conventional remedy - is, at best, practically impossible or, worse, harmful, because it is bound to follow conformist logic. Consequently, it is preferable to abandon corporate law reform completely and policy should focus instead on enabling the radical organisational practice already occurring in the social margin. [ABSTRACT FROM AUTHOR]

This article analyses the separate legal personality of partnerships, drawing on Hansmann and Kraakman's identification of the attributes shared by businesses possessing legal personality. Their work provides a jurisdictionally-neutral standard of comparison applied here to the Scottish partnership which, unusually amongst jurisdictions influenced by the common law tradition, possesses separate legal personality. The historical development of Scottish partnerships is explored, from its origins as a Roman-inspired type of societas, a contract centred on the rights and duties of the partners inter se, towards a modern, business able to contract with third parties in its own name. Scots law supports Hansmann and Kraakman's view that attributes of legal personality are secured by organisational law rather than contract law. Disagreeing with them, however, the author uses the Scottish experience to illustrate that lack of perpetual succession is not, as they argue, a 'mere inconvenience which can easily overcome with contractual workarounds', but rather an essential requirement of a workable partnership with legal personality. [ABSTRACT FROM AUTHOR]

The fiduciary duty of good faith, now set forth in section 172 of the Companies Act 2006, expressly positions shareholders at the centre of the company's interests, and assigns the priority entitlement to shareholders relative to all other stakeholders. The provision constitutes an attempted codification of the common law duty to act in good faith in the corporate interest, which remains immensely important in interpreting and applying the modern good faith requirement. However, this article submits that a reductive shareholder-determined articulation of the pre-2006 corporate interest seems practically misconceived, if not indeed in some sense conceptually impossible as a managerial behaviour obligation, and represents a departure from the common law doctrinal origins that is problematic for contemporary English company law and policy. Instead, the article provides a more functional and nuanced understanding of the salient cases, which focus typically on the company as a body corporate, and the particular free floating commercial objects of that entity. [ABSTRACT FROM AUTHOR]

Corporate misconducts present challenges to the governance of modern corporations, not least because they undermine sound corporate culture and obstruct economic growth. One of the ways through which these misconducts can be exposed is through the mechanism of whistle-blowing. This article examines the role of whistleblowing in combating corporate frauds and misconducts. Using South Africa as the 'foil' to Nigeria, it describes the law and role of whistleblowing in a comparative context. It finds that while South Africa has taken steps to embed sound whistle-blowing practices within its jurisdiction, the concept is virtually non-existent in Nigeria. This is because there is no comprehensive legislation on whistle-blowing in the country, coupled with the dearth of strong institutions needed for the protection of whistle-blowers. The article, while making recommendations on how the concept can be strengthened, contends that with strong legal and institutional structures, whistle-blowing can amount to a powerful tool for the entrenchment of a robust and viable corporate governance mechanism in Nigeria. [ABSTRACT FROM AUTHOR]

What is the purpose of the corporation? The debate has continued for a long time without a clear answer partly because corporate law is often silent or ambiguous on the purpose of the corporation. The debate is largely academic and has limited dialogues with corporations that manage business in the real world. If corporations themselves articulate the purpose in their constitutive documents, it might be helpful to resolve the corporate purpose controversy. China offers a valuable empirical setting to examine how corporations formally state the purpose in their corporate charters. The empirical findings in this article show that the purpose clause in the articles of incorporation is not static but evolving with institutional and organisational demands. However, the purpose clause serves only a signalling or marketing function because of external and intrinsic constraints. [ABSTRACT FROM AUTHOR]

This article examines whether the increase in insolvency regulation is adequate to deter insolvency practitioners from using their discretion to charge excessive fees. To understand how insolvency regulation has developed the article will commence with a review of the historical origins of insolvency work and how it became associated with opportunistic behaviour. Next, the insolvency practitioner will be examined along with the recognised professional regulators to examine how their practices have helped to shape insolvency law. IP discretion and their decision making will then be considered to demonstrate how opportunism has continued to exist in administration, before the measures that have been taken over the last twenty years to address some of these issues are explored. The Australian regulatory system will then be reviewed as a comparison to the UK, before finally recommendations are made to the effect that insolvency practitioners should be further monitored in the use of their discretion. [ABSTRACT FROM AUTHOR]

This article empirically investigates how the statutory derivative procedure is being applied de facto in comparison with the equitable procedure. Agency theory supposes that the corporate purpose is to maximise the value of the company by approximating the 'efficient contract' between the shareholders and directors. The derivative claim is one such way of doing so. However, an intractable tension exists between too much and too little litigation where there are inadequate private incentives relative to the corporate purpose. The equitable procedure did not incentivise litigation. The concern of the statutory reform was that an accessible procedure would create inadequate private incentives for shareholders to litigate. We do not find evidence that the statutory procedure is more accessible. We observed what we call the sine quibus non for permission. Shareholders are unlikely to meet these, creating little incentive to litigate and directors will continue to be incentivised to deter litigation. [ABSTRACT FROM AUTHOR]

A keynote policy in the United Kingdom since the financial crisis has been to 'ring-fence' retail banks into separate subsidiaries, so-called 'ring-fenced bodies' ('RFBs'). To protect vital retail banking services from risk elsewhere in the banking group, the ring-fencing framework deploys a range of regulatory tools to credibly insulate the RFB. However, directors of the RFB's parent company have an interest in undermining the ring-fence, and directors of RFBs have the discretion to do so. UK policymakers therefore acknowledge that the RFB's directors must be able to take decisions 'independently' of the parent company. This article argues that, because UK corporate law generates accountability to the parent company, RFB directors remain accountable to parent company directors from whom they are supposed to be independent. The interplay between incomplete and indeterminate regulatory obligations and the incentives generated by ring-fence governance together compromise the credibility of the ring-fencing regime. [ABSTRACT FROM AUTHOR]

British Home Stores collapsed led 11,000 employees to lose their jobs and faced substantial cuts to their pension with a £571 million pension deficit. In light of the BHS scandal, the UK Government has proposed a set of corporate governance reforms to strengthen the employee voice. Although the government's approach towards strengthening the employees' protection is well intentioned, we argue that without providing a derivative claim right for employees, these measures will likely have little impact in practice. Hence we suggest that to safeguard the employees' interest in the company and to enhance the overall protection of the company, in addition to the current proposed reforms, the standing for bringing derivative claims should be broadened to the employee's representative. [ABSTRACT FROM AUTHOR]

In 2017, Singapore introduced wide-ranging reforms to its insolvency and restructuring laws with a view to enhancing its attractiveness as an international centre for debt restructuring. Central to these reforms is the transplantation (with modification) of certain provisions from Chapter 11 of the US Bankruptcy Code including the automatic moratorium, cross-creditor cram-down, rescue financing and prepacks. Drawing upon the US experience and similar reform proposals in the EU (including the UK), we critically evaluate the impact of the new Singapore law. We argue that there remain challenges in ensuring that the transplantation works well and highlight the possible unintended consequences of such transplantation. [ABSTRACT FROM AUTHOR]

The number of limited partnerships in the UK has grown rapidly since the 1980s, largely due to the use of the limited partnership vehicle by private equity. The political and economic influence of private equity has enabled it to exert considerable influence on the UK government amounting to legislative capture, and this in turn has driven reforms to limited partnership law, predominantly deregulation, for the sole benefit of private equity. This distortion of the partnership legislation disadvantages other users or potential users of the limited partnership vehicle, since the private equity-inspired reforms do not apply them, and other reforms which would be of benefit to them have been ignored. Furthermore, reduced regulation is in some respects harmful to private equity itself, and the overall result is harm to the wider economy. [ABSTRACT FROM AUTHOR]

The modern company is a creature of the state with corporate legal personality derived from the state through the process of incorporation. Once incorporation takes place, a legal person is created. Status as a legal person is different to the type of sociological personality that a group of individuals may develop organically that is recognised by the law; it also means corporate legal personality is more significant than just a shortcut mechanism to describe a collective of individuals or a set of characteristics. This article focuses on the source of corporate legal personality, applying an historical lens to show that the status of a company as a legal person or persona ficta is of long standing. Nineteenth century general incorporation statutes changed the process for acquiring corporate legal personality, but did not alter the underlying fact that corporate legal personality remained a concession of the state. [ABSTRACT FROM AUTHOR]

This article is concerned with debate in England as to whether English law has tipped too far in favour of promoting corporate bankruptcy law’s policy concerns to the detriment of an effective secured transactions law regime, and debate in America as to whether reform to secured transactions law has tipped too far in favour of secured transaction law’s policy concerns to the detriment of an effective corporate bankruptcy regime. Through a detailed analysis of the evolutionary history of secured transactions and corporate bankruptcy law and policy in both America and England, the article analyses why each jurisdiction approaches balancing the policy objectives in a fundamentally different way, and the role which the very different institutional environments in corporate bankruptcy have played in mediating between them. It argues that this legal and institutional evolutionary history suggests relatively modest ongoing reform in both jurisdictions, closely adapted to local conditions. [ABSTRACT FROM AUTHOR]

Continental European jurisdictions have introduced corporate opportunities rules inspired by Anglo-American law. Despite a certain degree of homogeneity in substantive law, their monetary remedial systems still differ in common law and civil law jurisdictions. These differences matter because of the deterrence function connected to corporate opportunities remedies - deterrence being the core of fiduciary law. This article explains the divergences embedded in different legal traditions within a law and economics framework. It looks at potential developments of corporate opportunities remedies, drawing inspiration from a sample of European jurisdictions. Whereas UK law uses a vast array of remedies with high potential of deterrence and great flexibility in their application, civil law remedies are fewer, weaker and less flexible than the common law ones. However, the deterrence potential of civil law corporate opportunities remedies could be increased either through the introduction of criminal sanctions or future development of punitive damages doctrines. [ABSTRACT FROM AUTHOR]

We consider the corporate governance challenge of protecting outside investors in listed, controlled firms. We argue that outside investors in European listed firms with controlling shareholders are poorly protected compared to US investors because the distinct European approach to the protection of investors, based on empowering active shareholders rather than shielding passive investors, is not well suited for controlled, listed firms. This approach translates into a lack of definition and development of specific fiduciary duties of the controlling shareholders towards market investors. Moreover, European jurisdictions have developed strong voice rights for active shareholders, which tend to play in favour of controlling shareholders and organised minorities but are not effective for protecting passive investors and limit their exit options. This explains why shareholder protection in European jurisdictions can be considered high, while outside investors’ protection can be considered low at the same time, generating a ‘strong shareholders, weak outside investors’ problem. [ABSTRACT FROM AUTHOR]

The business judgment rule, as it has been traditionally understood, seems to be based on three underlying assumptions that make this rule economically desirable. First, directors are subject to a credible threat of being sued for a breach of the duty of care. Second, the primary role of the corporation is to maximise shareholder value. Third, shareholders want the directors to pursue those investment projects with the highest net present value regardless of their volatility. This article challenges these assumptions and argues that the business judgment rule might not be desirable in some jurisdictions outside the United States and even in many US corporations. Moreover, it points out that the implementation of the business judgment rule may actually create new, unintended costs. By re-examining the law and economics of the business judgment, this article draws conclusions about the most efficient way to implement the business judgment rule across jurisdictions. [ABSTRACT FROM AUTHOR]