Corporate Governance in the Common-Law World - Corporate Governance - Law

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Corporate Governance in the Common-Law World

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The corporate governance systems of Australia, Canada, the United Kingdom and the United States are often characterized as a single 'Anglo-American' system prioritizing shareholders' interests over those of other corporate stakeholders. Such generalizations, however, obscure substantial differences across the common-law world. Contrary to popular belief, shareholders in the United Kingdom and jurisdictions following its lead are far more powerful and central to the aims of the corporation than are shareholders in the United States. This book presents a new comparative theory to explain this divergence and explores the theory's ramifications for law and public policy. Bruner argues that regulatory structures affecting other stakeholders' interests - notably differing degrees of social welfare protection for employees - have decisively impacted the degree of political opposition to shareholder-centric policies across the common-law world. These dynamics remain powerful forces today, and understanding them will be vital as post-crisis reforms continue to take shape.

• Interdisciplinary, drawing upon law, political science and sociology to appeal to scholars in all of these fields and potentially others including business, economics and finance • Illuminates social and political connections across diverse fields of law and policy not typically thought to impact one another - notably corporate law and social welfare policy

List of Figures	ix
Acknowledgments	xi
Part I Shareholder Orientation in The Common-Law World
1 Introduction and Overview	3
2 Comparative Theory and Corporate Governance	13
A. Functionalism and Contextualism	14
B. Failing Better	18
3 The Corporate Governance Role of Shareholders in Common-Law Jurisdictions	28
A. The U.K. Model: Strong Shareholders	29
i. Shareholders as Stewards	29
ii. Enlightened Shareholder Value	34
iii. Contractualism and U.K. Corporate Governance	35
B. The U.S. Model: Weak Shareholders	36
i. Shareholders as Spectators	37
ii. Ambivalence Regarding Shareholder Interests	42
iii. Prevailing Theories of U.S. Corporate Governance	53
C. Predominance of the U.K. Corporate Governance Model	65
i. Australia	66
ii. Canada	77
D. Shareholder Lawsuits and Corporate Governance	97
Part II A Political Theory of Corporate Governance in The Common-Law World
4 Comparative Theories of Corporate Governance	111
A. Economics	112
B. Politics	116
i. “Law Matters”	116
ii. Social Democracy	119
iii. Institutions	123
iv. “Varieties of Capitalism” and Institutional Complementarities	125
v. Coalitions	130
vi. Political Parties and Political Salience	134
vii. Extra-Corporate Stakeholder Protections	138
C. Toward a Political Theory of Corporate Governance in the Common-Law World	140
5 Shareholders, Stakeholders, and Social Welfare Policy	143
A. The U.K. Model: State-Based Social Welfare Policy	143
B. The U.S. Model: Employer-Based Social Welfare Policy	166
C. Predominance of the U.K. Social Welfare Model	176
i. Australia	176
ii. Canada	200
D. Shareholder Orientation, Social Welfare, and Political Equilibrium	214
Part III The Theory’s Explanatory Domain	221
6 Stability, Change, and the Future of Corporate Governance in the Common-Law World	223
A. Mapping the Explanatory Domain	225
B. The Evolving Shareholder Base	242
C. Postcrisis Austerity	250
D. Postcrisis Coalitions	258
7 Conclusions	287
Index	293

Christopher M. Bruner
Washington and Lee University School of Law

'… Bruner's insights are a revelation … [H]e has identified a critical, new dimension of our understanding of corporate law.' David Skeel, Texas Law Review

'[T]his book is a work of monumental significance and scholarly craft. It is impeccably researched, beautifully written, and its claims are both forceful and highly persuasive. It is an absolute must for anyone seeking to form a holistic understanding of how corporate law and governance relate to their broader social-institutional context, as well as an excellent primer on the key comparative features of the world's principal common law systems. In writing this pioneering work, Bruner has undoubtedly earned the right to sit at the very top table of international corporate law scholarship. One can only hope that future research in the field will advance this fascinating line of enquiry yet further.' Marc Moore, University College London