COVID-19 and Comparative Corporate Governance

77 Pages Posted: 27 Jan 2021 Last revised: 28 Sep 2022

See all articles by Martin Gelter

Martin Gelter

Fordham University School of Law; European Corporate Governance Institute (ECGI)

Julia M. Puaschunder

Columbia University; New School for Social Research; Harvard University; The Situationist Project on Law and Mind Sciences

Date Written: January 25, 2021


With the pandemic caused by the novel coronavirus SARS-CoV-2 raging around the world, many countries’ economies are at a crucial juncture. The COVID-19 external shock to the economy has the potential to affect corporate governance profoundly. This article explores its possible impact on comparative corporate governance. For an economy to operate successfully, a society must first find a politically sustainable social equilibrium. In many countries, historical crises – such as the Great Depression and World War II – have resulted in a reconfiguration of corporate governance institutions that set the course for generations. While it is not yet clear whether COVID-19 will have a similar effect, it is possible that it will change patterns of what kind of firms are – from an evolutionary perspective – likely to survive, and which ones are not. We argue that to some extent, it will accelerate ongoing trends, whereas in other areas it put corporations on an entirely new course. We observe three trends, namely the need for resilience, a growth of nationalist policies in corporate law, and an increasing orientation toward ‘stakeholder’ interests. First, firms will have to become resilient to the crisis, and consequently long-term oriented. Corporations that are not operating merely on an arm’s length capital market basis but are integrated into a network, generated by core shareholders, state ownership or bank lending may be more likely to survive. In addition, firms are beginning to interact with their workforce differently in their attempts to maintain what could be called ‘healthy human capital.’ Second, we are likely to see a resurgence of nationalism in corporate governance to ensure that foreign ownership and interconnected supply chains do not put national security at risk. Third, the existing critiques of inequality but also climate change awareness will accelerate the trend toward a broadening of corporate purpose toward ‘stakeholderism’ and public policy issues. As in the past years, institutional investors acting as ‘universal owners’ will play a role in shaping this trend.

Keywords: COVID-19, corporate governance, ownership structure, varieties of capitalism, human capital, relational finance, free cash flow, nationalism, economic protectionism, inequality, climate change, stakeholder theory, shareholder primacy, evolutionary theory of corporate law, Green New Deal, behavioral

JEL Classification: D21, D63, E24, F50, G02, G30, G38, I14, I15, J24, K22, K32, M59, N20, P51

Suggested Citation

Gelter, Martin and Puaschunder, Julia M., COVID-19 and Comparative Corporate Governance (January 25, 2021). Fordham Law Legal Studies Research Paper No. 3772965, Journal of Corporation Law, vol. 46, iss. 3., pp. 558-627 (2021), European Corporate Governance Institute - Law Working Paper No. 563/2021, Available at SSRN: or

Martin Gelter (Contact Author)

Fordham University School of Law ( email )

150 West 62nd Street
New York, NY 10023
United States
646-312-8752 (Phone)


European Corporate Governance Institute (ECGI)


Julia M. Puaschunder

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

New School for Social Research ( email )

6 East 16th Street
New York, NY 10003
United States

Harvard University ( email )

24 Oxford Street
Cambridge, MA 02138
United States

The Situationist Project on Law and Mind Sciences ( email )

24 Oxford Street
Cambridge, MA 02138
United States

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