Europe’s Ius Commune on Director Revocability
Harvard Law School; Max Planck Institute for Comparative and International Private Law
January 30, 2011
European Company and Financial Law Review, Forthcoming
This paper argues that a mandatory rule of at will revocability of company directors is typical of civil law and is to be counted as part of the European ius commune. The paper shows that this is not the result of harmonization efforts of the European Union. Instead, the rule has its historical foundations in the early development of French law. It first appeared as a general rule in Napoleon’s codification of commercial law and subsequently extended to the other major jurisdictions in the French and German civil law family. Despite some tempering of the rule, especially in the German legal tradition, it still plays an important role in civil law jurisdictions. In traditional common law, in contrast, the rule is extraneous. It did not appear in old common law, was merely a default rule when first introduced in the United Kingdom, and is still not mandatory in the United States. These novel findings shed important light on some other differences in company law and possibly also stock ownership structures between civil law and common law jurisdictions, and thus lay a promising basis for further research.
Number of Pages in PDF File: 27
Keywords: Director removal, shareholder power, comparative corporate law, history of corporate law, common law versus civil law
JEL Classification: K22, L22Accepted Paper Series
Date posted: February 15, 2011
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