Corporate Governance, Capital Market Regulation and the Challenge of Disembedded Markets

30 Pages Posted: 17 Jul 2010  

Peer C. Zumbansen

King’s College London, Dickson Poon Transnational Law Institute

Date Written: July 15, 2010

Abstract

Long before the current financial and economic crisis, corporate governance and securities regulation had become part of one of the most interesting and dynamic regulatory areas in law and policy making today. Both areas had been undergoing dramatic transformations over the past 30-40 years, which saw a global expansion of capital markets and a deep-running ‘financialisation’ of the corporation. Around the world governments saw themselves challenged to adapt their regulatory apparatus to the whims and hues of nervous investors with global sensitivities. Meanwhile, scholars in law, economics, but also political science and sociology fiercely debated whether what was unfolding constituted a worldwide convergence around a corporate governance philosophy that placed the shareholder at the centre or whether we would continue to have different, divergent corporate governance systems around the world. Today’s crisis-responses appear to be primarily designed to ‘fix the excesses’ of the past decades, rather than driven by an interest to connect the present efforts at regulation with the earlier convergence vs. divergence debates, which themselves built on much older critiques of the embeddedness of the firm and the political economy context of corporate activity. The paper contends that the sustainability of future corporate governance and securities regulation depends on the effort to critically examine both areas in the context of a larger inquiry into the goals and challenges of market regulation.

Keywords: Financial Crisis, Corporate Governance, Embeddedness, Transnational legal pluralism

JEL Classification: K10, K22

Suggested Citation

Zumbansen, Peer C., Corporate Governance, Capital Market Regulation and the Challenge of Disembedded Markets (July 15, 2010). Osgoode CLPE Research Paper No. 24/2010. Available at SSRN: https://ssrn.com/abstract=1640671 or http://dx.doi.org/10.2139/ssrn.1640671

Peer C. Zumbansen (Contact Author)

King’s College London, Dickson Poon Transnational Law Institute ( email )

Somerset House East Wing
Strand
London, WC2R 2LS
United Kingdom

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