Self-Commitments and the Binding Force of Self-Regulation with Respect to Third Parties in Germany

31 Pages Posted: 18 Dec 2017  

Patrick C. Leyens

Erasmus University Rotterdam (EUR) - Rotterdam Institute of Law and Economics; Humboldt University of Berlin - Faculty of Law; Max Planck Institute for Comparative and International Private Law

Date Written: December 2017

Abstract

Codes of conduct are a well-accepted feature of European corporate governance. Listed corporations are obliged to annually state their compliance with a corporate governance code or to explain their non-compliance. Whilst it is agreed that self-commitments to non-statutory rules or standards of good conduct are an important component of self-regulation, it is widely unexplored how and to what extent they influence legal duties. The main purpose of this article is to show that a typology of binding mechanisms helps to narrow this uncertainty. In section II, a brief look at the theory and practice of self-commitments will explain where the discussion stands and which challenges need to be addressed. Section III presents the typology of binding mechanisms, these including norms, contracts, charters, and disclosure. Section IV looks at the consequences of non-compliance with a self-commitment in respect of third parties. Section V concludes with a summary of the main findings regarding the binding effects of self-commitments towards third parties.

Keywords: Bathurst, burden of proof, Caparo, comply or explain, corporate disclosure, corporate governance code, corporate social responsibility, Hedley Byrne, lex mercatoria, negligent misrepresentation, professional liability, pure economic loss, rules versus standards, third-party liability

JEL Classification: K12, K20, K22, K41

Suggested Citation

Leyens, Patrick C., Self-Commitments and the Binding Force of Self-Regulation with Respect to Third Parties in Germany (December 2017). European Corporate Governance Institute (ECGI) - Law Working Paper No. 379/2017. Available at SSRN: https://ssrn.com/abstract=3087417 or http://dx.doi.org/10.2139/ssrn.3087417

Patrick C. Leyens (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam Institute of Law and Economics ( email )

Burgemeester Oudlaan 50
PO box 1738
Rotterdam, 3000 DR
Netherlands

Humboldt University of Berlin - Faculty of Law ( email )

Unter den Linden 6
Berlin, D-10099
Germany

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
D-20148 Hamburg
Germany

HOME PAGE: https://www.mpipriv.de/en/pub/academic_staff/affiliates/leyens_patrick_c.cfm

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