Active Owners and Accountable Directors

Hanne Birkmose, Mette Neville & Karsten Engsig Sørensen (eds.), Boards of Directors in European Companies – Reshaping and Harmonising Their Organisation and Duties, Kluwer Law International, October 2013

Nordic & European Company Law Working Paper No. 14-11

20 Pages Posted: 6 Dec 2014

See all articles by Jesper Lau Hansen

Jesper Lau Hansen

University of Copenhagen - Faculty of Law (FOCOFIMA)

Date Written: October 1, 2013

Abstract

You would never find a lawyer saying: what is in a name? We know too well that you can frame an argument simply by choosing the right words. Who would oppose ‘independent’ directors? The answer, of course, is nobody and thus company law in the EU has in the past two decades been permeated by requirements that all or at least a substantial number of directors should be independent. We may equally well ask who would oppose ‘accountable’ directors and expect the same initial response of general approval. But upon closer inspection they are mutually irreconcilable. Although a tantalising prospect, especially in politics, you cannot have your cake and eat it. A director is either independent or accountable.

We must choose, and this contribution argues that our choice should be what it has been for a very long time in Nordic company law, that is, the latter option of accountability. But what is even more important is the premise that there is and should be a choice. Ideally, within each Member State, a choice should be available for each company to make, and as the very least each Member State should be free to make that choice unrestrained by EU law; this fundamental tenet of company law is ill-suited for harmonisation in any form.

Keywords: independent directors, active owners, accountability

JEL Classification: K22

Suggested Citation

Hansen, Jesper Lau, Active Owners and Accountable Directors (October 1, 2013). Hanne Birkmose, Mette Neville & Karsten Engsig Sørensen (eds.), Boards of Directors in European Companies – Reshaping and Harmonising Their Organisation and Duties, Kluwer Law International, October 2013, Nordic & European Company Law Working Paper No. 14-11, Available at SSRN: https://ssrn.com/abstract=2534278

Jesper Lau Hansen (Contact Author)

University of Copenhagen - Faculty of Law (FOCOFIMA) ( email )

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Studiestrade 6
Copenhagen, DK-1455
Denmark

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