Towards an Organisational Law of the Polycorporate Enterprise? A Comparative Analysis
Corporate Ownership and Control, Forthcoming
30 Pages Posted: 10 Mar 2006
"One key element in improving economic efficiency is corporate governance which involves a set of relationships between a company's management, its board, its shareholders and other stakeholders. [ . . . ] If countries are to reap the full benefits of the global capital market, and if they are to attract long-term 'patient' capital, corporate governance arrangements must be credible and well understood across borders."
One aspect of the relationship between the company's management and its shareholders is far from being well understood: How is this relationship affected if the single company is transformed into a parent company of a corporate group? In Germany, this topic has attracted the most vivid legal interest for some decades, but it is not even considered in other countries - neither in the context of corporate governance nor in the one of corporate groups. One reason might be that provisions concerning corporate groups are not perceived as a distinct body of law in most of these countries.
Chapter I will therefore provide a framework of general legal aspects of corporate groups. It shall give an idea of this phenomenon and the main legal issues involved, focusing primarily on UK law. By summarising the German discussion, Chapter II will then focus on the relationship between the board and the general meeting of a parent company within a corporate group. This will enable us to trace the relevant issues in French, US and UK law in Chapter III.
Keywords: Corporate Governance, Corporate Groups, Comparative Corporate Law
JEL Classification: G35, K23
Suggested Citation: Suggested Citation