Deconstructing the "Anglo-American" Corporate Model

Abstract

While approaches to corporate law and corporate governance vary globally, often the U.S. and the U.K. are placed into a single bucket-the "Anglo-American" corporate model. In this paper, we deconstruct this model with the first wide-ranging comparison of fundamental corporate law concepts in the two countries for decades. We undertake our analysis from both a black-letter "law in books" perspective and a functional "law in action" perspective. We draw upon these to offer intriguing insights regarding corporate law in the U.S., which we canvass by reference to Delaware law and applicable federal and listing rule regulations, and the U.K. Our "law in books" analysis shows the two jurisdictions employ corporate law mechanisms that often differ substantially, meaning that there is no single, unified "Anglo-American" approach. Still, from a "law in action" perspective, ultimately there are many functional similarities. Given these similarities, we do not make claims that either jurisdiction has "better" corporate law than the other, but do argue that if policymakers are seeking to change outcomes by transposing corporate governance features between the two jurisdictions reforms may well fail to have the anticipated beneficial impact.

Keywords: Corporate Governance, Stock Markets, Listing Rules, Boards, Shareholders, Takeovers

JEL Classification: G18, G30, G34, G38, K20, G15