ANDREW R. KEAY, University of Leeds - School of Law
Email: a.r.keay@leeds.ac.uk
JOAN LOUGHREY, University of Leeds
Email: j.m.loughrey@leeds.ac.uk
CHUYI WEI, Peking University - Peking University Law School, University of Leeds, Faculty of Education, Social Sciences and Law, School of Education, Students, Nottingham Law School
Email: weichuyiluna@hotmail.com
JINGCHEN ZHAO, Nottingham Law School
Email: jingchenzhao@yahoo.com
TING HU, Wuhan University - School of Economics and Management
Email: thu@whu.edu.cn

Minority shareholders in large companies, particularly where there is a majority/controlling shareholder, can be in a vulnerable position as they are not likely to be able to have much influence in the company or how its affairs are conducted. The position in which minority shareholders find themselves has caused many governments to provide protection in some form or another for minority shareholders. There are various corporate law or corporate governance mechanisms that have been embraced, one being a provision that allows shareholders to seek relief from the courts where oppression exists. China does not have a dedicated provision that gives minority shareholders such an action. This paper examines what China’s company law does offer shareholders by way of protection through direct action and focuses on whether the UK’s oppression provision, which has existed since 1948, (or elements of it) could be used in the Chinese context. An important contribution of the paper is that it identifies Chinese cases decided since 2012 in which shareholders have brought claims in situations where oppression was, effectively, alleged.

W. ROBERT (WILL) THOMAS, University of Michigan Ross School of Business
Email: will@w-thomas.com

Corporate criminal law is built atop the doctrine of respondeat superior, whereby a business organization can be convicted for virtually any crime committed by its employee. Critics have noted for more than a century that this rule of attribution exposes businesses to the prospect of more criminal liability than is either just or efficient—in short, respondeat superior is overbroad. By contrast, comparatively little attention has been paid to fact that this same doctrine is also underbroad; in addition to including too much conduct under its ambit, respondeat superior also captures too little misconduct. Moreover, this formal symmetry belies a deep, substantive asymmetry. The ambition of this project is to show that respondeat superior’s underbreadth problems are—or, at the very least, are becoming—both more serious, and more intractable, than its overbreadth problems.

There are several reasons to worry about underbreadth more, and at least one reason to worry about overbreadth less, than we do now. First, because respondeat superior treats an individual employee’s liability as a predicate to corporate liability, the doctrine reliably excludes from the criminal law predictable swaths of cases where, in our ordinary lives, we would be disposed to attribute responsibility to an organization rather than to any individual. Second, respondeat superior is not generically underinclusive—that is, it is not failing to capture just any random instances of wrongdoing. Rather, the stronger the normative basis is for assigning responsibility to an organization, the less well-equipped the doctrine is to assign it. As a result, respondeat superior risks focusing corporate criminal law on peripheral cases of organizational wrongdoing while excluding paradigmatic ones. Third, this disconnect between normative practice and legal doctrine is poised to grow ever starker as machine learning and other algorithmic decisionmaking processes further confound the criminal law’s attempts to trace corporate misconduct to a single, predicate offender. Finally, the past three decades have seen laudable, successful efforts to mitigate the risks associated with respondeat superior’s overbreadth. However, those mechanisms ameliorating the problems associated with overbreadth do nothing to manage underbreadth—and, if anything, are likely to make the aforementioned problems with underbreadth even worse.

KELLI ALCES WILLIAMS, Florida State University - College of Law
Email: kalces@law.fsu.edu

Leaders have long been described as fiduciaries because they are entrusted with the power to make decisions that significantly affect the lives and welfare of others. While trustworthiness is an admirable and necessary quality in a leader, fiduciary doctrine describes neither the bounds of a leader’s behavior nor the protections enjoyed by the governed. Fiduciary doctrine does not occupy the field of trusting relationships.

Leaders sell both the goals and priorities they will pursue in their positions and their own trustworthiness—that is, the combination of ability, integrity, and benevolence they bring to the task. In order to win and keep leadership positions, leaders must define success for constituents and convince them that they can be relied upon to deliver those results according to a given standard of decency. Fiduciary rhetoric obscures, rather than supports, the elements of trust that leaders must sell to their constituents. Those who are vulnerable to the decision-making of powerful others are harmed by their own belief in fiduciary rhetoric that does nothing to constrain the behavior of leaders who are driven by self-interest. Fiduciary rhetoric does not describe how leaders make decisions, and fiduciary doctrine cannot protect those who select and rely on leaders. By deceiving and misdirecting those it aims to protect, the fiduciary myth does real harm.

This Article makes three novel theoretical contributions to the literature. First, it argues that contrary to popular and scholarly opinion, conscientious leaders of large, diverse groups are not, and cannot be, fiduciaries of those they lead. Second, it models a more accurate understanding of how leaders are constrained by those affected by their decisions. Third, it presents an explanation of why the fiduciary myth, long viewed as harmless at worst, is actually harmful to those it is supposed to protect. It animates these arguments by focusing on the specific relationships between corporate and political leaders and their constituents.

HIROYUKI WATANABE, Waseda University, Faculty of Law
Email: watanabe-cls@waseda.jp

This paper presents a solution for Japanese Companies Act and comparative law analysis regarding hypothetical case on “piercing the corporate veil�. It is a revised version of “Hisaei Ito and Hiroyuki Watanabe, Piercing the Corporate Veil�〔Ch. 6 of “Mathias Siems and David Cabrelli (eds), Comparative Company Law - A Case-Based Approach, 2nd edition (Oxford, Hart Publishing, 2018)�. In that book, this case was prepared by Japanese scholars, then lawyers from 12 countries(9 European countries, US, Japan and South Africa) responded to it based on their own law, and finally, based on these 12 case solutions the questioner wrote the case report.

This paper added the results of joint research with lawyers and businessmen from various jurisdictions at Waseda University L.L.M. and Business School, based on hypothetical case. With the addition of Belgium, China, South Korea, Taiwan, Singapore and Brazil as new jurisdictions, consequently comparative law research covering 19 countries have conducted. In particular, research on corporate law in Asian countries has been strengthened. Also it was tried to explain and analyze the solutions of European countries such as Germany and Italy from a practical point of view. (I am solely responsible for this paper, but details of case studies in each jurisdiction and comparative law research with Japanese law will be published separately at a later date.)

Overall, French and Japanese law are very protective to the creditor in the current scenario. US law seems to be the least interested in creditor protection, with the US solution referring to contractual solutions for creditors. Yet, as a whole, it is difficult to make a general assessment on whether countries favor the interests of directors, shareholders or creditors. The company laws of most countries provide various tools of creditor protection, with many of them not concerned with directors’ duties but safeguarding the assets of the company (such as capital requirements).

The following suggestions were made by many jurisdictions: application of such doctrine is very limited or there is very high hurdle to prove it. Regarding Japanese law, it is true that the existence of "piercing the corporate veil" doctrine has been established, including a Supreme Court judgment. However, you will find that in Japan there are few cases where this doctrine was actually accepted in court, and in most cases, it has been dealt with based on other interpretation theories on the provisions of the positive law.

The solutions have also shown that questions of creditor protection are more complex than, say, shareholder protection because they touch on many areas of law apart from company and insolvency law, including contract, property, tort, civil procedure, accounting and securities law. Additional complications arise as a result of the need for the law to provide a balance between different types of creditors, such as secured and unsecured creditors, and by virtue of the fact that some laws are applicable to creditors regardless of whether the debtors are legal or natural persons, whereas others are specific to the creditors of companies. All these points cannot be discussed in this book in detail, but in the next chapter we will deal with another typical problem of creditor protection in company law.