Corporate boards play a central role in corporate governance and therefore are regulated in the corporate law and corporate governance codes of all industrialized countries. Yet while there is a common core of rules on the boards, considerable differences remain, not only in detail, but sometimes also as to main issues. These differences depend partly on shareholder structure (dispersed or blockholding), partly on path dependent historical, political and social developments, especially employee representation on the board. More recently, in particular with the rise of the international corporate governance code movement there is a clear tendency towards convergence, at least in terms of the formal provisions of the codes. This article analyses the corporate boards, their regulation in law and codes and their actual functioning in nine European countries (Belgium, France, Germany, Italy, the Netherlands, Poland, Sweden, Switzerland and the United Kingdom) in a functional and comparative method. Issues dealt with are inter alia board structure, composition and functioning (one tier v. two tier, independent directors, expertise and diversity, separating the chair and the CEO functions, information streams, committees, voting and employee representation) and enforcement by liability rules (in particular conflicts of interest), incentive structures (remuneration) and shareholder activism. The article finds convergence in these European countries due to the pressures of competition, a pro-shareholder change supported by government and institutional investors and, to a certain degree, the impact of the EU. This convergence shows more in the codes and the ensuing practice than in the statutes. On the other side considerable differences remain, in particular as a result of the failure to adopt a mandatory "no frustration" rule for takeovers at EU level and diverging systems of labor codetermination. The result is an unstable balance between convergence and divergence, shareholder and stakeholder influence and European v. national rulemaking.

ISBN: 0002-919X

DOI: 10.1017/S0008197310000516

Company law has long been in conflict with European Union law. Whereas the traditional approach of the European Court of Justice was to challenge national company law rules that were applied to foreign companies under the freedom of establishment (Centros and its progeny), recent case-law suggests that the Court might embark on a general assessment of domestic company law rules. This tendency is based on an extended interpretation of the free movement of capital, which became most prominently relevant in the recent Volkswagen case. A systematic analysis of the latter fundamental freedom and its relationship to company law demonstrates that this tendency is not without risk and might well end up in a ‘quality control’ of national company law through the ECJ. However, differentiated outcomes will be found depending on the actor in question (private party or State), and depending on the beneficiary of the measure at stake. It is argued that State measures potentially will always trigger the scope of application of the free movement of capital, irrespective of their nature or objective. Hence, even general statutory company law can be caught by this fundamental freedom. However, the decisive test will be identified as whether the measure has a ‘deterring effect’ on potential investors from other Member States. Special rights for the State are one extreme example which are surely caught by EC law, and purely private arrangements within the articles of association, are the other extreme. This test is recommended to serve the Court as guidance in future cases.

DOI: 10.1111/j.1740-1461.2009.01157.x

It is often assumed that strong securities markets require good legal protection of minority shareholders. This implies both “good” law—principally, corporate and securities law—and enforcement, yet there has been little empirical analysis of enforcement. We study private enforcement of corporate law in two common-law jurisdictions with highly developed stock markets, the United Kingdom and the United States, examining how often directors of publicly traded companies are sued, and the nature and outcomes of those suits. We find, based a comprehensive search for filings over 2004–2006, that lawsuits against directors of public companies alleging breach of duty are nearly nonexistent in the United Kingdom. The United States is more litigious, but we still find, based on a nationwide search of court decisions between 2000–2007, that only a small percentage of public companies face a lawsuit against directors alleging a breach of duty that is sufficiently contentious to result in a reported judicial opinion, and a substantial fraction of these cases are dismissed. We examine possible substitutes in the United Kingdom for formal private enforcement of corporate law and find some evidence of substitutes, especially for takeover litigation. Nonetheless, our results suggest that formal private enforcement of corporate law is less central to strong securities markets than might be anticipated.

One of the key features of the new Europe-wide legal form "European Company" ("Societas Europaea" or "SE") is the possibility of transferring the company’s seat from one Member State to another without having to be wound up or to re-register. As this possibility does not exist for companies formed under national law, the formation of an SE will often present the only possibility for companies to transfer their incorporation and corporate headquarters between Member States. This is a big advantage and a milestone towards the European Internal Market. However, some doubts remain as to the practicability of the system. The mandatory linkage of the head office to the registered office within the same Member State according to Article 7 of the SE Regulation is very problematic and, in light of recent ECJ decisions such as Centros, Überseering and Inspire Art, may violate EC primary legislation. Why should companies that are formed under national law be allowed to have the head office in a Member State different from their registration state, while an SE—as an instrument of Community law and a symbol of the Internal Market—is not? Furthermore, the detailed procedural rules laid down in the Regulation are sometimes overprotective and may significantly reduce the attractiveness of the SE’s mobility. It is argued that Article 7 of the SE Regulation is secondary law that itself is inconsistent with the (primary) EC Treaty. Furthermore, the Member States also tend to be overprotective when enacting safeguard measures for the benefit of creditors, minority shareholders and employees. Here again, freedom of establishment does not allow protectionist measures that contravene the gist of the SE’s mobility.

ISBN: 1473-5970

This is a textbook on English company law which deals with all the elements of core company law (separate legal personality, limited liability, board and shareholder relations, majority and minority shareholder relations, accounts and audit) as well as with corporate finace (including share issues, market manipulation and takeovers). It aims to provide a strong analytical structure as well as a detailed treatment of the law.

ISBN: 978-0421-94900-3