The Journal of Interdisciplinary Economics, 2006, Vol. 17, pp. 5 - 23 2006 A B Academic Publishers Prin ed in !

rea Bri ain

Comparative Corporate Governance: An Economic and Legal Analysis

Christian Kirchner
School of Law and School of Business and Economics, Humboldt Universitaet Berlin, ermany

1.

INTR !"CTI N

"#orpora e $o%ernance& 1 - i.e. mana$emen and con rol o' mana$emen ( is an economic phenomenon. )he *uali + o' $o%ernance s ruc ure is a decisi%e 'ac or 'or success or 'ailure o' mar,e ac i%i ies on 'ac or and on produc mar,e s. )he desi$n o' corpora e $o%ernance is o' in eres 'or o-ners, mana$ers and o her s a,eholders o' a corpora ion as -ell as 'or na ional and suprana ional le$isla ors. .ules 'or corpora e $o%ernance are le$al phenomena. #omparin$ corpora e $o%ernance s ruc ures, as he+ di''er 'rom one corpora ion o ano her and 'rom one coun r+ o ano her is o' in eres 'or economis s and le$al scholars ali,e. A po en ial s ar in$ poin 'or a compara i%e s ud+ o' corpora e $o%ernance could be he dis incion be -een insider s+s ems and ou sider s+s ems o' corpora e $o%ernance. 2 Ano her dis incion is ha be -een shareholder-orien ed, s a,eholder-orien ed and mana$er-orien ed corpora e $o%ernance. 3 Bu such rou$h classi'ica ions e%en uall+ ne$lec impor an 'ac ors, e.$. di''eren +pes o' $roups o' companies, ,eire su in /apan 0 and 1on2ern in !erman+ 5, or co-de ermina ion o' emplo+ees on he le%el o' he super%isor+ board 3in !erman+4. 6 !i%en models o' corpora e $o%ernance are embedded in na ional or suprana ional le$al s+s ems. #ompara i%e s ud+ o' corpora e $o%ernance has o a,e in o accoun he %arious le%els o' ins i u ion buildin$ and rule-ma,in$. 7

6chool o' 7a-, 8umbold 9ni%ersi ae , : 100;; Berlin, 9n er den 7inden 6, !erman+. )el. <0;30430-20;3-331=. >a?@ <0;30430-20;3-3030. A-mail@ #hris ian.1irchnerBre-i.hu.berlin.de

A s ud+ o' compara i%e corpora e $o%ernance -ill lead o he deba e on con%er$ence o' corpora e $o%ernance on a $lobal le%el. = )here is a -idel+ shared con%ic ion ha he ou sider s+s em o' corpora e $o%ernance as bein$ prac ised in he 9ni ed 6 a es o' America and he 9ni ed 1in$dom -ill displace he insider s+s em. ; Bu pa h dependence and poli ical 'ac ors pla+ an eminen role in he 'ield o' corpora e $o%ernance. 10 C is di''icul o predic -he her or no uni'ied corpora e $o%ernance s ruc ures -ill resul 'rom he on$oin$ compe i ion be -een di''eren corpora e $o%ernance concep s. C ma+ -ell be ha dis inc concep s o' corpora e $o%ernance -ill be 'ound in di''eren re$ions o' he -orld. C -ill be especiall+ in eres in$ ho- corpora e $o%ernance -ill de%elop in !erman+ 11, in /apan12 and in he Peoples& .epublic o' #hina. 13 Cn order o be er unders and he on$oin$ process o' compe i ion be -een di''eren concep s o' corpora e $o%ernance and o be able o con ribu e o he norma i%e discussion on ho- o respond on a na ional le%el o $lobalisa ion o' corpora e $o%ernance i appears o be help'ul, o approach he problem 'rom an in erdisciplinar+ me hodolo$+, combinin$ he me hods o' compara i%e la- and ne- ins i u ional economics. )hree h+po heses 'orm he 'undamen 'or he 'ollo-in$ anal+sis. 314 324 334 )he ins i u ional en%ironmen is a decisi%e 'ac or 'or corpora e $o%ernance. :i''eren +pes o' companies should ha%e heir speci'ic $o%ernance s ruc ures. 8armonisa ion o' corpora e $o%ernance s andards 3ei her in 'orm o' s a u or+ la- or o' non-bindin$ codes4 depends on he success o' ho- o 'i le$al ransplan s in o a $i%en ins i u ional 'rame-or,.

)his s ar in$ poin 'or he discussion o' compara i%e corpora e $o%ernance means ha a compara i%e anal+sis o' corpora e la- and corpora e $o%ernance codes is he 'ocal poin and no he meri s o' di''eren +pes or models o' corpora e $o%ernance.

#. a4

!I$$ERENT %TARTING & INT% $ R LEGAL %C' LAR% AN! EC N (I%T% 7e$al scholars& approach o con%er$enceDdi%er$ence o' corpora e $o%ernance rules

7e$al scholars are in eres ed in %arious le%els o' rule-ma,in$. Pri%a e orderin$ ma+ be dis in$uished 'rom public orderin$.10 En he le%el o' pri%a e orderin$ indi%idual companies de%elop heir o-n corpora e $o%ernance principles and s andards. )hese principles and s andards 'uncion as sel'-bindin$ rules, en'orced b+ a repu a ion mechanism. Public orderin$ - ei her b+ codes o' conduc or b+ la- 'rom le$isla ors - a,es place on hree di''eren le%els, he na ional, he suprana ional and he in erna ional le%el. 7e$al scholars radi ionall+ concen ra e heir a en ion on hese di''eren 'ields o' public orderin$.

7e$al scholars should be in eres ed in a compara i%e le$al anal+sis o' such le$al norms o' corpora e la- and capi al mar,e la- 3securi ies re$ula ion4, -hich 'orm he ins i u ional 'rame-or, 'or corpora e $o%ernance, in order o 'ind ou -hich le$al norms supposedl+ produce be er $o%ernance s ruc ures and ho- o ransplan such superior le$al norms in o o her le$al s+s ems. )hus le$al scholars are in eres ed in a cer ain le%el o' he ins i u ional en%ironmen , he le%el o' corpora e la- and o' capi al mar,e la- 3securi ies re$ula ion4. )he+ are 'amiliar -i h he 'ac ha di''eren +pes o' companies need di''eren %aria ions o' corpora e la-. )hus le$al scholars should be inclined o de%elop di''eren concep s o' corpora e $o%ernance rules 'or publicl+ raded companies and 'or non publicl+ raded companies. 15 7e$al scholars should a,e in o accoun o her le%els o' he ins i u ional en%ironmen as -ell, especiall+ di''eren 'rame-or,s o' cons i u ional la-. Bu i mi$h -ell be ha here are in ermedia e le%els be -een corpora e la- and cons i u ional la-@ i' here is common unders andin$ ha co-de ermina ion o' emplo+ees on he board le%el is a $eneral principle o' a na ional le$al order, i mi$h be di''icul o adap na ional corpora e la- o ne- s andards o' corpora e $o%ernance b+ simpl+ elimina in$ co-de ermina ion i' i pro%es o ha%e an ne$a i%e impac on "$ood" corpora e $o%ernance. C' i comes o le$al ransplan s le$al scholars are con'ron ed -i h a ric,+ problem@ A%en i' he le$isla ure passes ne- s a u or+ pro%isions -hich incorpora e elemen s o' 'orei$n le$al orders in o he na ional le$al s+s em ( e.$. he business Fud$emen rules in o !erman la- o' s oc, corpora ions 16, la- cour s mi$h end o in erpre ne- s a u or+ pro%isions in he li$h o' e?is in$ corpora e la-. )he perspec i%e o' le$al scholars in he 'ield o' compara i%e corpora e $o%ernance is in essence a 'unc ional one. )he -or,in$ o' di''eren solu ions in di''eren con e? s is bein$ anal+sed. Gorma i%e proposals are bein$ 'ormula ed on he basis o' obser%a ions o' e?is in$ corpora e $o%ernance concep s and o' he in erpla+ be -een corpora e $o%ernance and di''eren le$al norms and rules in %arious le$al 'ields. )he o%erall pic ure is e? remel+ comple?. )he anal+sis is o' en in ui i%e. Gorma i%e Fud$emen s are o' en based on a means-and-ends approach. 17

b4

Aconomis s& approach o con%er$enceDdi%er$ence o' corpora e $o%ernance

Aconomis s are in eres ed in corpora e $o%ernance rules as par or re$ula ion o' capi al mar,e s. Enl+ i' in%es ors& con'idence can be assured capi al mar,e s are 'unc ionin$ -ell. )he pre%ailin$ %ie- amon$s economis s hus is direc ed o-ards he principal-a$enc+ problem be -een in%es ors and mana$ers. Aconomis s are s ill con'ron ed -i h he problem ha o-nership and con rol in lar$e capi al mar,e orien ed companies are separa edH in%es ors are o-ners o' he compan+, -hich is con rolled b+ mana$emen . Cn%es ors are onl+ -illin$ o

in%es in companies i' he+ are assured ha mana$ers are ac in$ in accordin$ -i h heir pre'erences. Bu o-ners are no in eres ed in mana$in$ he compan+H C' he+ -ould r+ o do so he+ -ould loose he ad%an a$es o' di%ision o' labour. As in%es ors he+ are con'ron ed -i h he problems o' ra ional i$norance and apa h+. )he po en ial problem solu ion 'or in%es ors is dele$a in$ super%isor+ po-ers o a$en s -ho are con rollin$ mana$ers, hus es ablishin$ a double principal-a$en -rela ionship. C' his approach is -or,able $o%ernance s ruc ures should be de%eloped -hich ser%e he in eres s o' in%es ors 3shareholders4 and dri%e do-n capi al cos s 'or companies. All business en erprises compe in$ in $lobal mar,e s see,in$ access o in erna ional capi al mar,e s are hen -ell ad%ised o in roduce $o%ernance s ruc ures -hich promise 'a%ourable capi al cos s. )his %ie- re'lec s a 'inancial s+s em in -hich companies hea%il+ rel+ on e*ui + capi al pro%ided b+ 'unc ionin$ capi al mar,e s. )hus he ou sider corpora e $o%ernance s+s em seems o pre%ail o%er compe in$ insider s+s ems. !lobal con%er$ence o' $o%ernance s ruc ures -ill a,e place as a resul o' compe i ion o' business en erprises on in erna ional capi al mar,e s. An erprises -hich do no adFus heir corpora e $o%ernance s ruc ures -ill ha%e o pa+ he price in 'orm o' less 'a%ourable condi ions on capi al mar,e s. Ihen economis s are con'ron ed -i h problems o' di%er$en ins i u ional 'rame-or,s o' business en erprises 'rom di''eren re$ions o' he -orld, such di''erences ma+ be unders ood as cons rain s -hich are dri%in$ up capi al cos s. #ompanies ac in$ in an ins i u ional 'rame-or, -hich is no 'a%ourable 'or shareholder-orien ed concep s o' corpora e $o%ernance should r+ o lobb+ in heir home coun r+ 'or reducin$ such cons rain s. #on%er$ence o' corpora e $o%ernance hus can be unders ood as a process on -o di''eren le%els@ 314 Business en erprises ha%e an incen i%e o adFus heir corpora e $o%ernance o a shareholder-orien ed concep in order o $e more 'a%ourable access o in erna ional capi al mar,e s. 324 )he+ should lobb+ in heir home coun r+ in order o adap he ins i u ional 'rame-or, in a -a+ ha shareholder-orien ed corpora e $o%ernance s ruc ures can be be er achie%ed.

c4

Ji?ed approaches and cri i*ue o' uni-disciplinar+ approaches

)oda+ le$al and economic approaches are o' en mi?ed. 7e$al scholars are 'amiliar -i h economic reasonin$. Aconomis s are a-are o' e?is in$ di''erences o' na ional 3and suprana ional4 le$al orders. Gorma i%e proposals are bein$ made on di''eren le%els o' rulema,in$. )he *ues ion o' ho- indi%idual companies should reac o he e?is in$ di%er$ence o' corpora e $o%ernance s ruc ure has rarel+ been discussed b+ le$al scholars, -hereas he issue o' de%elopin$ corpora e $o%ernance s ruc ures sui able 'or in erna ional capi al mar,e s is bein$ discussed b+ le$al scholars and economis s ali,e. Ihereas economis s end o s ress he con ribu ion o' $o%ernance s ruc ures o he 'unc ionin$ o' capi al mar,e s le$al scholars are

-ell a-are o' he connec ion be -een corpora e $o%ernance and capi al mar,e s in a meansand-ends approachH bu he+ are s ressin$ combined re'orms o' corpora e la-, capi al mar,e and corpora e $o%ernance in order o achie%e he ends o' be er 'unc ionin$ capi al mar,e s. )he shor comin$s o' le$al approaches concern -o di''eren issues@ 314 Cn order o compare di''eren concep s o' corpora e $o%ernance i is necessar+ o de%elop compara i%e impac anal+ses. 6uch anal+ses ha%e o appl+ a $i%en se o' assump ions and de%elop 'alsi'iable 3i.e. es able4 h+po heses. 9p o no- le$al science has made no a emp s o de%elop such +pes o' anal+sis. 324 Cn order o be able o ma,e norma i%e proposals he means-and-ends approach is d+s'unc ional. C' $i%en means are sui able o a ain $i%en ends presupposes impac anal+ses o' $i%en le$al solu ions -i h es able and 'alsi'iable h+po heses, -hich canno be pro%ided b+ e?is in$ me hods o' le$al science. A%en i' such impac anal+ses can be made here is he problem o' circulari + be -een means and ends. )he shor comin$s o' con%en ional economic approaches ha%e o do -i h he one-sided perspec i%e o' corpora e $o%ernance s ruc ures as means o impro%e he 'unc ionin$ o' capi al mar,e s. Business en erprises are ac in$ simul aneousl+ on 'ac or and on produc mar,e s. A%en i' corpora e $o%ernance s ruc ure are op imal 'or he 'unc ionin$ o' capi al mar,e s he+ ma+ be sub-op imal 'or produc mar,e s. And e%en i' corpora e $o%ernance s ruc ures are -ell-sui ed 'or shareholders ne$lec in$ he in eres s o' 3o her4 s a,eholders ma+ be cos l+. Aconomis s mi$h be in eres ed in he *ues ion o' ho- di''eren $o%ernance s ruc ures a''ec capi al mar,e s. )he+ -ould li,e o 'ind ou -he her re$ula ion o' $o%ernance s ruc ures ( e.$. b+ means o' corpora e la- andDor securi ies re$ula ion ( should be implemen ed on an in erna ional scale or on a na ional basis. 6cholars o' mana$emen science should be in eres ed o 'ind ou -hich $o%ernance s ruc ures 'i bes 'or a $i%en business en erprise ac in$ in a speci'ic le$al, economic and social en%ironmen .

).

(ET' ! L GICAL A&&R AC': NE* IN%TIT"TI NAL EC N (IC%

Bo h uni-disciplinar+ approaches ( la- and economics ( as -ell as mi?ed approaches are no 'ull+ sa is'ac or+. )he+ all add o he unders andin$ o' compara i%e corpora e $o%ernance, bu he+ do no ac,le he problem o' ho- o adFus he $i%en ins i u ional 'rame-or, 3s a u or+ laand codes o' conduc 4 o' a coun r+ o impro%e in erna ional compe i i%eness, as -ell ha o' he coun r+ in *ues ion and o' companies doin$ business here.

Cn order o appl+ a more sui able me hodolo$ical approach i mi$h be help'ul o loo, in o he na ure o' corpora e $o%ernance s ruc ures, o' corpora e la-, capi al mar,e la-, codes o' conduc . !o%ernance s ruc ures o' business en erprises are an essen ial par o' he or!anisation o' such en erprises. An or$anisa ion ma+ be unders ood as a se o' en'orceable rules o$e her -i h he ac ors -or,in$ under hese rules.1= )hese rules are essen ial -hen he *uali + o' he or$anisa ion s ruc ure ma ers. )he+ ma+ be 'ormal rules 3as in he case o' le$al rules4 or in'ormal rules. )hus nei her a con%en ional le$al approach appears o be sui able o anal+se compara i%e $o%ernance, nor a radi ional economics approach, -hich ends o ne$lec he impac o' he speci'ic ins i u ional 'rame-or, on he 'unc ionin$ o' ins i u ional %ariables, li,e corpora e lapro%isions or corpora e $o%ernance rules. A speci'ic approach 'or he s ud+ o' di''eren se s o' rules and o' or$anisa ions appears o be necessar+. )he approach chosen here is he Ge- Cns i u ional Aconomics. 1; )he reason 'or his choice is he po en ial o' his approach in he 'ield o' posi i%e impac anal+ses o' ins i u ions li,e corpora e la- pro%isions and corpora e $o%ernance rules -i hin speci'ied ins i u ional 'rame-or,s 3posi i%e anal+sis4 and in he 'ield o' norma i%e anal+sis o de%elop polic+ proposals -hich do no purpor o ma?imise social -el'are bu -hich are orien ed o-ards a h+po he ical o' $i%en ac ors. Ge- Cns i u ional Aconomics is a ne- branch o' economics, -hich e?pands he scope o' economics o he anal+sis o' social in erac ions be+ond mar,e ransac ions. 20 C anal+ses he creaion, he chan$e and he impac o' ins i u ions. Cns i u ions are bein$ de'ined as $eneral rules o$e her -i h he en'orcemen s+s em. 21 Ge- Cns i u ional Aconomics -or,s -i h he so-called economic paradi$m, i.e. he assump ion o' scarci + o' resources and ha o' sel'-in eres ed ra ional beha%iour o' indi%idual ac ors. Bu di''eren 'rom so-called neo-classical mains ream economic heor+ i asser s ha ra ionali + is bounded, ha here are ransac ion cos s and ha in'orma ion is s+s ema icall+ incomple e. )hus Ge- Cns i u ional Aconomics is as -ell dis inc 'rom neo-classical economics and 'rom old ins i u ional economics. 22 Ihen anal+sin$ or$anisa ions he ne- ins i u ional economics approach is in eres ed in he impac o' di''eren ins i u ional arran$emen s and a,es in o accoun ha here are %arious le%els o' ins i u ions. )he radi ional dis inc ion is ha be -een pri%a e orderin$ and public orderin$. Bu as -ell in he 'ield o' pri%a e orderin$ as in he 'ield o' public orderin$ here are more le%els. 23 Pri%a e ac ors ma+ co-opera e and se heir o-n s andards, e.$. in he 'orm o' non-bindin$ codes. Public orderin$ ma+ a,e place on he na ional, he supra-na ional and he in erna ional le%el. A posi i%e ne- ins i u ional economics anal+sis has o de ermine -hich is he rele%an le%el o' anal+sis. )he independen %ariable ma+ be he indi%idual or$anisa ion o' a compan+, he se o'

rules o' a pri%a e code, he na ional corpora e la-, he supra-na ional la- and he in erna ional la-. C' 'or ins ance problems o' adFus men o' he or$anisa ion o' companies due o a chan$e o' a non-bindin$ code are bein$ discussed he o her %ariable ( e.$. he applicable corpora e la- ( has o be cons an . )he norma i%e approach o' ne- ins i u ional economics res s upon he 'undamen o' norma i%e indi%idualism.20 )hus he o%erall norma i%e $oal is no o ma?imise social -el'are b+ comparin$ -el'are $ains o' -inners and -el'are losses o' losers and accep a problem solu ion -hen he -inners can compensa e he losers and are s ill be er o'' 31aldor-8ic,s- es 4. )his es presupposes in er-subFec i%e comparabili + o' indi%idual u ili + -hich is no possible. )he norma i%e es is he so-called h+po he ical consen es -hich as,s, ho- he ac ors -ould decide i' he+ are able o predic he conse*uences o' a $i%en solu ion bu he+ do no ,noheir indi%idual posi ion 3%eil o' i$norance4. 25

+.

EC N (IC%

$ G ,ERNANCE %TR"CT"RE%

Ihereas a sel'-emplo+ed business man does no need a $o%ernance s ruc ure, problems s ar -i h rela ional con rac s ( e.$. emplo+men con rac s - because such con rac s are ( necessaril+ incomple e and hus ma+ produce e? pos oppor unism and hold-ups. 26 C' business or$anisa ion becomes more comple? $o%ernance s ruc ure ha%e o re'lec ha comple?i +. Er$anisin$ a business en erprise as a corpora ion -i h separa ion o' o-nership and con rol allo-s a speci'ic +pe o' di%ision o' labour 3be -een in%es ors KshareholdersL and mana$ers4. 27 Bo h in%es ors 3shareholders4 and mana$ers ma+ pro'i 'rom he bene'i s o' ha +pe o' di%ision o' labour. Bu mana$ers ma+ e?ploi in%es ors due o he e?is in$ in'orma ion as+mme r+. Jos o' he radi ional corpora e $o%ernance li era ure in he 9ni ed 6 a es o' America is 'ocussin$ on ha a$enc+ problem and de%elops proposals o' ho- o be er pro ec 3alle$edl+ -ea,4 in%es ors 3shareholders4. 2= Ihereas ha con%en ional approach o corpora e $o%ernance as,s ho- o pro ec in%es ors 3shareholders4 a$ains oppor unis ic beha%iour o' mana$emen one ma+ chan$e he direc ion o' he approach. 2;)he *ues ion is hen -hich $o%ernance s ruc ure should mana$ers in an ini ial public o''erin$ 3CPE4 in%es ors so ha he+ ha%e an incen i%e o in%es in o he compan+. )he direc ion o' he approach ma ers. 30 )he con%en ional shareholder-orien ed approach ries o 'ind he op imal solu ion 'or shareholder pro ec ion. )he mana$emen -orien ed approach ries o iden i'+ a $o%ernance s ruc ure -hich $i%e in%es ors an incen i%e o pro%ide e*ui + capi al a reasonable condi ions and incen i%es 'or he mana$ers o emplo+ heir human capi al in an op imal manner. )his second %ie- has been de%eloped 'or so-called human capi al in ensi%e business en erprises. 31 )he core concep is eas+@ C' human capi al is he mos %aluable resource

'or a business en erprise he $o%ernance s ruc ure chosen should pro%ide ade*ua e incen i%es 'or mana$ers -ho are he o-ners o' such human capi al. 6hareholder pro ec ion ma ers in his case as -ell, bu i has o be unders ood as a cons rain , no more. Iha ma ers is he impac o' he $o%ernance s ruc ure on he o%erall per'ormance o' he business en erprise. C' $o%ernance s ruc ures 'or business en erprises are o be de%eloped 'rom he mana$emen perspec i%e ( as has been done here ( i is e%iden ha $o%ernance s ruc ure ma+ ha%e an impac on he per'ormance o' he business en erprise on capi al mar,e s. )he messa$e should be@ #api al cos s -ill be lo-er i' $o%ernance s ruc ure -hich are 'a%ourable 'or shareholders -ill be o''ered. Bu accordin$ o he assump ions o' ne- ins i u ional economics in'orma ion is s+s ema icall+ incomple e and ra ionali + o' ac ors is bounded. )he in'orma ion problem is he 'ollo-in$ one@ A%en i' in%es ors ha%e a clear pic ure, ho- $o%ernance is or$anised in he compan+ he+ in end o in%es in, he+ mi$h no ha%e su''icien in'orma ion concernin$ he economic impac o' ha $o%ernance s ruc ure on he per'ormance o' he compan+. C' he s+s em o' moni orin$ and con rollin$ mana$emen b+ shareholders and heir a$en s 3e.$. independen members o' super%isor+ or$ans4 is inso'ar per'ec as mana$ers ha%e more or less o ac accordin$ o in%es ors& pre'erences in%es ors are no sure -he her he $o%ernance s ruc ure chosen reduces ris, a,in$ b+ mana$emen and hus leads o sub-op imal mana$emen . )he+ ma+ pre'er o in%es in o business en erprises -i h less per'ec $o%ernance s ruc ures bu -i h a hi$h *uali + mana$emen . Ene has o a,e in o accoun ha $o%ernance s ruc ures are an ins rumen o pre%en mana$ers 'rom ne$lec in$ in%es ors& pre'erences. Bu -ha coun s in he be$innin$ is he *uali + o' he mana$emen . )his is especiall+ rue in human capi al in ensi%e business en erprises. )o sum up he discussion o' economics o' corpora e $o%ernance@ !o%ernance s ruc ures should cope -i h problems o' e?-pos oppor unism and -i h principal-a$enc+ problems. Bu onl+ o s ress principal a$enc+ problems 'rom a shareholder perspec i%e is oo narro-. )hus i ma,es sense o con ras shareholder-orien ed and mana$er-orien ed corpora e $o%ernance s ruc ures. )he la er ones should be especiall+ rele%an 'or human capi al in ensi%e business en erprises -here $o%ernance s ruc ures are needed -hich pro%ide incen i%es 'or mana$emen no onl+ o ac accordin$ o shareholders& pre'erences bu o ma,e op imal use o' human capi al. A simplis ic shareholder perspec i%e o' corpora e $o%ernance is reducin$ he problem o one o' 'unc ionin$ o' capi al mar,e s. Bu business en erprises are ac i%e simul aneousl+ on 'ac or mar,e s 3e.$. capi al mar,e s4 and produc mar,e s. .e$ula ion o' capi al mar,e s b+ prescribin$ shareholder-orien ed $o%ernance s ruc ures mi$h be sub-op imal. 6uch re$ula ion -or,s -i h he implici assump ion o' comple e in'orma ion and unbounded ra ionali +. C' incomple e in'orma ion and bounded ra ionali + are bein$ assumed, one mi$h -ell predic ha in%es ors are no -illin$ o pa+ a premium Fus 'or shareholder-orien ed $o%ernance s ruc ures

-hen he+ are no sure ha such $o%ernance s ruc ures mi$h ha%e a ne$a i%e impac on he per'ormance on produc mar,e s.

-.

"% %'ARE' L!ER. RIENTE! G ,ERNANCE RE$ R(% AN! T'EIR E/& RT T T'ER C "NTRIE%

)he 96 model o' corpora e $o%ernance is a shareholder-orien ed model. C ma+ be unders ood as an a emp o $i%e an ans-er o he problem o' separa ion o' o-nership and con rol. C' o-ners dele$a e po-ers o mana$emen ( -hich seems o be a na ural conse*uence o' modern indus rial produc ion ( he+ are con'ron ed -i h he principal a$enc+ problem. C' mana$ers are success'ul in mana$in$ he business en erprise accordin$ o heir o-n in eres s o-ners loose con rol and ma+ be e%en e?ploi ed b+ mana$ers. 6candals li,e Anron and Iorld-#om ha%e made such a dan$er mani'es . )he ob%iousl+ simple ans-er o such scandals is a re'orm o' corpora e $o%ernance in o he direc ion o' s ren$ henin$ shareholders& posi ion and o in roduce ne- modes o' super%isin$ mana$emen b+ more e''icien con rol s ruc ures. C does no ma,e sense 'or he ( small ( indi%idual shareholder o e?ercise con rol o%er he mana$emen , because he produces a so-called club $ood. E her shareholders are pro'i in$ 'rom his ac i%i ies -i hou ha%in$ o share he cos burden 3'ree-rider problem4. )his leads o so-called ra ional i$norance and hen o ra ional apa h+. #on rol o%er mana$ers e?ercised b+ shareholders is no possible. )hus he call 'or independen or$ans ( li,e independen direc ors, independen members o' he audi commi ee e c. seems o sol%e he problem. 32 )he principal - i.e. he shareholder ( emplo+s a$en s in order o super%ise o her a$en s, i.e. members o' mana$emen . )he implici assump ion is ha he independen a$en s do no collude -i h mana$emen bu co-opera e -i h shareholders. )his ne- oolbo? o' a shareholder-orien ed corpora e $o%ernance s ruc ure ma+ be unders ood as a poli ical ans-er o scandals o' 'inancial mar,e s in he 9ni ed 6 a es o' America. :ue o he %er ical separa ion o' po-ers in he 96 s+s em -here corpora e la- is s a e la-, -hereas securi ies re$ula ion is 'ederal la-, he poli ical ans-er on he na ional le%el had o be a 'ar-'led$in$ re'orm o' 'ederal securi ies re$ula ion, ha is he 6arbanes E?le+ Ac . )he border line be -een corpora e la- and capi al mar,e la- 3securi ies re$ula ion4 has been mo%ed o-ards more compe ences 'or he 'ederal le%el. Enl+ b+ in er%enin$ in o he 'ield o' corpora e $o%ernance, i.e. he in ernal or$anisa ion o' such corpora ions -hich ma,e use o' he na ional capi al mar,e , b+ means o' 'ederal capi al mar,e la- he $oal o' a %isible re'orm o res ore con'idence in na ional capi al mar,e s could be achie%ed. .e$ula ion o' capi al mar,e s has been he ins rumen o re'orm corpora e $o%ernance. C is easil+ unders andable ha such a re$ula or+ approach is 'ocussed on he impac o' corpora e $o%ernance on capi al mar,e s and is s+s ema icall+ ne$lec in$ he impac o' corpora e $o%ernance on he per'ormance o' business

en erprises on produc mar,e s. #ombined -i h assump ions 'rom neo-classical economic heor+ 3comple e in'orma ion, unbounded ra ionali +4 such a one-sided approach ma+ easil+ miss he problem ha po en ial in%es ors are no onl+ in eres ed in he impac o' $o%ernance s ruc ures on he principal-a$enc+ problem bu on i s impac on o%erall per'ormance o' business en erprises, includin$ heir per'ormance on produc mar,e s. Ii h he a emp o cope -i h problems o' corpora e $o%ernance b+ re'ormin$ 96 capi al mar,e la- a ne- problem has emer$ed@ he e? ra- erri orial applica ion o' 96 capi al mar,e la-. C' corpora e $o%ernance is no lon$er been %ie-ed as a ma er o' in ernal or$anisa ion bu a ma er o' re$ula ion o' capi al mar,e s le$al solu ions -ill au oma icall+ no onl+ a''ec na ional en erprises bu 'orei$n en erprises as -ell, i.e. all business en erprises -hich ma,e us o' 96 capi al mar,e s. C' 'orei$n business en erprises -ould be rea ed di''eren l+ his -ould mean ne$a i%e discrimina ion o' 96 'irms. )he e? ra- erri orial applica ion o' 96 capi al mar,e la- o 'orei$n business en erprises see,in$ access o 96 capi al mar,e s has he 'ollo-in$ conse*uences@ Cn order o $e access such business en erprises are bein$ 'orced o adop he 96 shareholder-orien ed corpora e $o%ernance concep . )his mi$h lead o 'ric ions and con'lic s be -een he necessi + o cop+ 96 corpora e $o%ernance s ruc ures and na ional corpora e la- bindin$ 'or such 'orei$n business en erprises. )radi ionall+ ma ers o' corpora e $o%ernance are bein$ deal -i h b+ corpora e la-. C is hen impor an -hich na ional corpora e la- ( accordin$ o he rules o' con'lic o' la-s ( is bein$ applicable. 9nder he sea heor+ companies are no 'ree o choose he applicable la- bu ha%e o be incorpora ed in ha Furisdic ion -here he compan+ has i s sea . )he incorpora ion heor+ on he o her hand allo-s 'or incorpora ion in one Furisdic ion and ha%in$ he cen re o' business ac i%i ies ( he sea ( in ano her one. :espi e he 'ac ha he Auropean #our o' /us ice has se%erel+ res ric ed he applica ion o' he sea heor+ -hen i con radic s he 'ree ri$h o' es ablishmen in he Auropean 9nion, man+ companies on he Auropean con inen are 3s ill4 bein$ incorpora ed under he Furisdic ion o' he coun r+ he+ ha%e heir sea . )his is rue 'or /apan and P. #hina as -ell, independen 'rom sea heor+ or incorpora ion heor+. 9nder he circums ances described business en erprises see,in$ access o 96 capi al mar,e s ha%e o adop $o%ernance s ruc ures -hich do no con radic 96 capi al mar,e la-. )heir incen i%es are lo-er capi al cos s because o' he hi$h li*uidi + o' 96 mar,e s. C' he+ do no ha%e access o such mar,e s his could be a compe i i%e disad%an a$e %is-M-%is 96-based business en erprises -hich hen enFo+ more 'a%ourable erms on capi al mar,e s. )o ma,e his simplis ic s or+ a li le more sophis ica ed@ A non-96-based en erprise should -ei$h he ad%an a$e o' lo-er capi al cos s, due o access o 96 capi al mar,e s, a$ains cos s incurred b+ he in roduc ion o' ne- $o%ernance s ruc ures -hich ma+ no be sui able 'or he en erprise.

10

)he non-96-based business en erprises could sa%e cos s i' he+ can lobb+ a home o in roduce re'orms o' na ional corpora e la- -hich elimina e 'ric ions and con'lic s -i h 96 capi al mar,e la-. Poli icians o' hese home coun ries could ma,e such re'orms plausible -i h he ar$umen ha such re'orms are necessar+ prere*uisi es in order o s ren$ hen in erna ional compe i i%eness o' he na ional capi al mar,e . Cn order o allo- a smoo h adop ion o' he 96 corpora e $o%ernance concep i mi$h be help'ul o s ar on he le%el o' pri%a e orderin$, 'irs on he le%el o' he indi%idual business en erprise and hen on he le%el o' non-bindin$ corpora e $o%ernance codes. C' he re'orms pleaded 'or on hese le%els are purpor edl+ consis en -i h in erna ional s andards o' corpora e $o%ernance he na ional la- ma,er can easil+ been con%inced ha he should re'orm he ins i u ional 'rame-or, 'or such corpora e $o%ernance codes, i.e. na ional corpora e la- and ma+ be na ional capi al mar,e la-. Bu non-bindin$ corpora e $o%ernance codes ma+ be eroded b+ so-called de'ec ors, i.e. business en erprises -hich 'ind i in heir o-n in eres no o compl+ -i h a na ional corpora e $o%ernance code. A%en i' he na ional la--ma,er in roduces compl+-or-e?plain rules in o na ional corpora e la3li,e ar . 161 o' he !erman s oc, corpora ion ac 4, his mi$h no de er de'ec ors. )he ne? "re'orm&-s ep -ill be he in roduc ion o' bindin$ obli$a ions in o na ional s a u or+ la-. )he conse*uences o' 96 capi al mar,e la- re'orms and heir impac on o her Furisdic ions ma+ be bene'icial or no . Ihe her his is he case or no depends on he *uali + o' he 96 shareholder-orien ed corpora e $o%ernance concep as compared o compe in$ concep s and he speci'ic conse*uences o' ransplan in$ 96-la- pro%isions in o o her le$al s+s ems. >ur hermore he a rac i%eness o' 96 capi al mar,e s 'or 'orei$n en erprises pla+s an impor an role. As has been men ioned be'ore i mi$h be a ra ional decision 'or a business en erprise e%en o accep an in'erior corpora e $o%ernance s ruc ure i' he disad%an a$e o' adop in$ his concep is o%ercompensa ed b+ be er capi al mar,e condi ions. En he o her hand i has o be a,en in o accoun ha o%er-re$ula ion o' 96 capi al mar,e s mi$h dri%e a-a+ capi al see,in$ business mar,e s -hich $o o less re$ula ed places. As 'ar as re$ula or+ compe i ion be -een Furisdic ions is concerned he in erpla+ be -een e? ra- erri orial applica ion o' 96 capi al mar,e la- and reac ions o' a''ec ed business en erprises and heir respec i%e home coun ries ma+ -ell lead o a di''eren ia ed s+s em o' corpora e $o%ernance on he in erna ional le%el. )he 'orei$n re$imes are %ulnerable onl+ inso'ar as na ional companies ha%e o see, access o 96 capi al mar,e s. A presen heir is no empirical e%idence ha in%es ors are -illin$ o pa+ a premium 'or companies -i h 96 shareholder-orien ed corpora e $o%ernance s ruc ures. C' he anal+sis is con'ined o heore ical considera ions he superiori + o' a shareholder-orien ed corpora e $o%ernance s ruc ure can onl+ be assumed 'or such business en erprises -here capi al cos s are

11

decisi%e 'or heir compe i i%eness and -here shareholder-orien ed $o%ernance s ruc ures do no lead o reduced mana$emen *uali +. )he con%er$ence h+po hesis hus has a -ea, 'undamen . )here are a hand'ul o' presupposi ions@ 314 Cn%es ors are -illin$ o pa+ a premium 'or shareholder-orien ed corpora e $o%ernance. 324 )he 96 capi al mar,e is so a rac i%e ha companies see,in$ access o hese mar,e s are -illin$ o accep $o%ernance s ruc ures -hich 'or heir purpose are sub-op imal. 334 #ompanies in eres ed in access o 96 capi al mar,e s are success'ul in lobb+in$ a home. 304 Ga ional la- ma,ers are con%inced ha cop+in$ 96 corpora e $o%ernance -ill s ren$ hen he compe i i%eness o' na ional capi al mar,e s. 354 #orpora e $o%ernance s ruc ures in roduced in o na ional Furisdic ions 'or in erna ional business en erprises -ill be applied o business en erprises -hich are onl+ ac i%e on na ional mar,e s. 0. a4 C R& RATE G ,ERNANCE IN 1A&AN2 GER(AN3 AN! &R C'INA )he common problem

Ihereas /apan and !erman+ ha%e o' en been pu in o one and he same bas,e -hen corpora e $o%ernance s ruc ures ha%e been compared on an in erna ional scale, he problems o' P. #hina seem o be o all+ di''eren . )he reason -h+ he hree coun ries are here discussed o$e her are he 'ollo-in$ ones@ 314 #orpora e la- o' all hree coun ries is based on he -o ier board s+s em -i h dis inc ion be -een mana$emen board and super%isor+ board. 324 All hree coun ries are oda+ under pressure o open heir s+s ems 'or 96 in'luences. 334 Cn all hree coun ries corpora e $o%ernance codes ha%e been in roduced -hich adop impor an elemen s o' shareholder-orien ed corpora e $o%ernance. Bu here are impor an di''erences as -ell, -hich -ill be discussed in he ne? sec ions.

b4

/apan

/apan has responded o pressures e?ercised b+ re'orms o' 96 capi al mar,e la- and he dependence o' in erna ional /apanese business en erprises on 96 capi al mar,e s -i h 'le?ible re'orm pro$ramme o' corpora e la- combined -i h "Principles o' #orpora e !o%ernance 'or

12

7is ed #ompanies& o' )o,+o 6 oc, A?chan$e. )he essence o' ha /apanese response is o lea%e i o companies and hus o he mar,e o decide -hich $o%ernance s ruc ures are bes sui able 'or he indi%idual business en erprise 3modular s+s em4.

c4

!erman+

!erman+ has a,en se%eral s eps o re'orm he o%er-re$ula ed s oc, corpora ion ac o' 1;65. Bu ins ead o' de-re$ula in$ he ac and in roducin$ op ions 'or business en erprises he re'orms ha%e ra her added ne- re$ula or+ pro%isions -hich $o in o he direc ions o' s ren$ henin$ shareholders and especiall+ minori + shareholders. A !erman #orpora e !o%ernance #ode has been in roduced as a non-bindin$ code -hich ries o s ren$ hen he posi ion o' shareholders and he super%isor+ board bu -i hou copin$ -i h he problem o' code ermina ion -hich se%erel+ hampers he *uali + o' corpora e $o%ernance in !erman+. c4 P. #hina

P. #hina has seen re'orm s eps on -o le%els. )he corpora e ac has been re%ised his +ear in roducin$ more elemen s o' he 96 corpora e la- s+s em and nearl+ elimina in$ he remnan s o' he super%isor+ board pro%isions. )he o her le%el is ha o' a #ode o' #orpora e !o%ernance 'or 7is ed #ompanies in #hina, issued b+ #hina 6ecuri ies and .e$ula or+ #ommission and he 6 a e Aconomic and )rade #ommission as o' /anuar+ 7, 2001. )his code is bindin$ 'or lis ed companies and in roduces man+ elemen s o' shareholder-orien ed corpora e $o%ernance s ruc ures in con'ormi + -i h he 96 approach.

d4

#on%er$ence o' corpora e $o%ernance in /apan, !erman+ and P. #hina in o he direc ion o' he 96-approach

C' he anal+sis is con'ined o he paper 'orm o' re'orms in /apan, !erman+ and P. #hina one ma+ come o he conclusion ha con%er$ence o' corpora e $o%ernance in hese coun ries o-ards he 96 model is -ell under -a+. )he in roduc ion o' audi commi ees and independen direc ors is a common 'ea ures in all re'orm pro$rammes. Bu in !erman+ he super%isor+ board is no in line -i h he ideal o' independen super%isors i' one does no accep he doc rine ha emplo+ees o' a compan+ ser%in$ as members o' he super%isor+ board are "independen &. Accordin$ o presen bindin$ la- in !erman+ he+ occup+ 50 per cen o' he sea s in super%isor+ boards in lar$e !erman companies 3-i h more han 2000 emplo+ees4. )he open issue ( no onl+ in !erman+, bu especiall+ in /apan and in P. #hina ( is he "independence& o' so-called independen direc ors. )he si ua ion in all hree coun ries is so

13

di''eren compared o ha in he 9ni ed 6 a es ha is di''icul o ima$ine ha here -ill be a su''icien number o' real independen super%isors in he hree coun ries. Cn P. #hina here is ano her problem@ he in'luence o' he local par + or$anisa ion. )he preliminar+ resul o' compara i%e anal+sis o' corpora e $o%ernance is disappoin in$. )here has been a mo%e o-ards appro?ima in$ cer ain pro%isions o' s a u or+ la- and o' corpora e $o%ernance codes in o he direc ion o' he 96 model. Bu i no 'or $ran ed ha hese pro%isions -ill ha%e a similar e''ec compared o hose in 96 la-. Cn /apan he ne- s+s em is he mos 'le?ible one. Cn roducin$ a mar,e es 'or di''eren op ions and modules allo-s /apanese companies o search 'or he op imal corpora e $o%ernance s ruc ure. Bu i' companies decide no o 'ollo- he 96 model he+ ha%e o pa+ a price@ no bein$ able o use 96 capi al mar,e s. )he price mi$h be lo-er han e?pec ed. )here is a cons an pressure in he 96 o cope -i h he problem o' o%er-re$ula ion o' capi al mar,e s. Bu his -ill a,e some ime in order no send a -ron$ si$nal o capi al mar,e s -here rus ou$h o be res ored b+ he 6arbanes E?le+ Ac , -hich pro%es o be ha%e been an e?a$$era ion. Cn !erman+ he ne- s+s em is s ill o%er-re$ula ed. Access o' !erman companies o 96 capi al mar,e s depends on he -illin$ness o' he 6ecuri ies and A?chan$e #ommission o prolon$ue he pro%ision accordin$ o -hich access o' companies -i h co-de ermina ion on he le%el o' super%isor+ board is bein$ olera ed 'or an in erim period. )he di''icul + -i h !erman corpora e $o%ernance pro%isions is he non-bindin$ charac er o' he !erman #orpora e !o%ernance #ode combined -i h he compl+-or-e?plain pro%ision o' ar . 161 !erman s oc, corpora ion ac , -hich ob%iousl+ does no 'unc ion. )here is an on$oin$ rend o-ards bindin$ pro%isions o' he s oc, corpora ion ac -hich hen leads o s ill more o%er-re$ula ion. Cn P. #hina he s a u or+ pro%isions 'or corpora e $o%ernance are s ill e? remel+ broad and %a$ue. )he o''icial #ode o' #orpora e !o%ernance 'or 7is ed #ompanies in #hina urns ou o be re$ula or+ de%ice in he hands o' he #hina 6ecuri ies .e$ula or+ #ommission ra her han an ins rumen o adop $o%ernance s ruc ures o he 96 model. Bu i is he clear $oal o' he la-ma,er and he re$ula ors in P. #hina o pa%e he -a+ 'or #hinese companies o in erna ional capi al mar,e s. As lon$ as 96 s andards are bein$ percei%ed is in erna ionall+ s a e o' he ar P. #hina has an in eres o adop 96 s andards. Bu a,in$ in o accoun ha he closes in erna ional super po-er o P. #hina is /apan i has o be e?pec ed ha P. #hina is no in eres ed in cop+in$ 96 models one o one bu ra her 'ollo-s he /apanese e?ample.

10

4.

"TL

)here is $ood reason o $uess ha he 96 shareholder-orien ed corpora e $o%ernance approach is economicall+ no op imal. C e?a$$era es he capi al mar,e 'ocus and does no a,e in o accoun he in erdependence be -een 'ac or and produc mar,e s and he necessi + ha corpora e $o%ernance should be 'ramed in manner ha i 'i s bo h needs. )he shareholderorien ed approach is no able o cope -i h he speci'ic problems o' human capi al in ensi%e business en erprises. C is no clear a all -he her in%es ors -ill pa+ a premium 'or ha sor o' shareholder-orien ed corpora e $o%ernance s ruc ures as bein$ in roduced b+ he 6arbanes E?le+ Ac in o 96 capi al mar,e la-. And hus i is no sure, -he her he e?is in$ o%er-re$ula ion o' ha Ac -ill be mi i$a ed soon, so ha op ional modes o' corpora e $o%ernance -ill be allo-ed. )he ad%an a$e o' such a mo%e -ould be ha mar,e ac ors -ould decide -hich $o%ernance s ruc ure he+ pre'er. )his is he road /apan has chosen -i h i s op ional model. >rom a norma i%e perspec i%e i -ould be ad%isable ha he 96 and !erman+ ha%e a closer loo, on he /apanese e?perience -i h i s ne- s+s em o' corpora e la- and corpora e $o%ernance. C' more op ions are bein$ in roduced in a number o' 'inancial places his -ould loosen he dependence o' he #hinese de%elopmen on he 96 model.

15

10

11

12

13 10

15

. )he erm has supposedl+ been in roduced b+ Iilliamson@ E. Iilliamson, N The Economic Institutions of "apitalism#, Ge- Oor,, 1;=5, p. 2;=. . 9.#. BraendleD /. Goll, NEn he #on%er$ence o' Ga ional #orpora e !o%ernance 6+s emsP, 16 Journal of Interdisciplinary Economics, 2005. . 8. 8ansmannD.. 1raa,man, Q)he And o' 8is or+ 'or #orpora e 7a-N, Harvard Law School $iscussion %aper Go. 2=0H A. %. Ierder, N"orporate overnance &Unternehmensverfassun!'# , in@ !. 6chre+oe$$, A. %. Ierder 3eds.4, 8and-oer erbuch 9n ernehmens'uehrun$ und Er$anisa ion, 6 u $ar , 2000, p. 162. . .. /. !ilsonDJ./. .oe, N9nders andin$ he /apanese 1eire su@ E%erlaps be -een compan+ $o%ernance and indus rial or$ani2a ionP, 102 (ale Law Journal =71 31;;34H #h. 1irchner, NHori)ontale *apanische Unternehmens!ruppen &+eiretsu' im deutschen ,on)ernrecht#, in@ #orpora ions, #api al Jar,e s, and Business in he 7a-, liber amicorum .ichard J. Bu?baum, ed. b+ )heodor Baums, 1laus /. 8op , Gorber 8orn, 7ondon, )he 8a$ue, Bos on 2000, pp. 33;-362. . #h. 1irchner, N-ur .ehl+onstru+tion des deutschen ,on)ernrechts / ,riti+ und 0euans1t)e in interdis)iplin1rer %erspe+tive#, in@ 7 Jana$emen 'orschun$ , !es al un$ %on Er$anisa ions$ren2en, ed. b+ !. 6che+R$$ and /. 6+do-, Berlin, Ge- Oor,, 1;;7, pp. 271 ( 312. . Berliner Ge 2-er, #orpora e !o%ernance 3members@ #h. 1irchner, >./. 6aec,er, /. 6ch-albach, A. 6ch-ar,, A.%. Ierder, #h. Iindbichler4, N12 )hesen 2ur Jodernisierun$ der Ji bes immun$, in@ 0; A, ien$esellscha' P, 200 320004H #h. 1irchner, N!runds ru, ur eines neuen ins i u ionellen :esi$ns 'uer die Arbei nehmermi bes immun$ au' der 9n ernehmensebeneP, in@ 0; 2+tien!esellschaft, 1;7 320004. . )he dis inc ion be -een he corpora e le%el, he le%el o' corpora e $o%ernance codes and he le$isla i%e le%el is bein$ discussed in@ P. 8ommelho'' D J. 6ch-ab, N3e!elun!s4uellen und 3e!elun!sebenen der "orporate overnance5 eset), Sat)un!, "odices, unternehmensinterne rundsaet)e#, in@ P. 8ommelho''D1. /. 8op D A. %. Ierder 3eds.4 8andbuch #orpora e !o%ernance, 1oeln 2003, pp. 51-=6 . En con%er$ence o' corpora e $o%ernance see #o''ee, /. 31;;;4, N)he >u ure as 8is or+@ )he Prospec s 'or !lobal #on%er$ence in #orpora e !o%ernance and i s Cmplica ionsP, ;3 0orthwestern University Law 3eview, 601707H 9.#. BraendleD /. Goll 3>n. 24H 8. 8ansmannD.. 1raa,man 3>n. 24H B... #he''ins, N#urren )rends in #orpora e !o%ernance@ $oin$ 'rom 7ondon o 7ima o )oron oP, 10 $u+e Journal of "omparative and International Law 5 320004H /. !ordon, NPa h-a+s o #orpora e #on%er$enceS )-o 6 eps on he .oad o 6hareholder #api alism in !erman+@ :eu sche )ele,om and :aimler #hr+slerP, 5 "olumbia Journal of European Law, 21; 31;;;4, !. Visen ini N#ompa ibili + and #ompe i ion Be -een Auropean and American #orpora e !o%ernance@ Ihich Jodel o' #api alismSP 23 Broo+lyn Journal of International Law, =33 31;==4. . 6ee 8ansmannD1raa,man 3>n. 24H #o''ee 3>n. =4H Visen ini 3>n. =4H more cau ious@ .. .omano, NA #au ionar+ no e on :ra-in$ 7essons 'rom #ompara i%e #orpora e 7a-P, 678 (ale Law Journal 2021 31;;34. . 6ee 7. Bebchu,DJ. /. .oe, NA )heor+ o' Pa h :ependence in #orpora e E-nership and !o%ernanceP, 52 Stanford Law 3eview, 775 31;;;4H J./. .oe, NStron! 9ana!ers, :ea+ ;wners< The %olitical 3oots of 2merican "orporate .inance#, Prince on,1;;0H J./. .oe, NPoli ical Precondi ions o 6epara in$ E-nership 'rom #orpora e #on rolP, 53 Stanford Law 3eview, 53; 320004. . 8op , 1. 31;;=4, NThe erman Two/Tier Board = 2 erman >iew on "orporate overnance# , in@ 1./. 8op D8. 1andaDJ./. .oeDA. I+meerschD6. Pri$$e 3eds.4, #ompara i%e #orpora e !o%ernance ( )he 6 a e o' he Ar and Amer$in$ .esearch, E?'ord 1;;=, pp. 227 ( 25=H Pri$$e, 6., N2 Survey of erman "orporate overnance#, in@ 1./. 8op D8. 1andaDJ./. .oeDA. I+meerschD6. Pri$$e 3eds.4, #ompara i%e #orpora e !o%ernance ( )he 6 a e o' he Ar and Amer$in$ .esearch, E?'ord 1;;=, pp. ;02 ( 1000H 6chmid , .einhard 8. 320004@ ?"orporate overnance in ermany5 2n Economic %erspective# , in@ 1rahnen, /.P.H 6chmid , ..8.@ NThe erman .inancial System#, E?'ord@ E?'ord 9ni%ersi +, pp.3=6-020H 6chmid , 8., :ru,arc2+,, /. 31;;74, N"orporate overnance in ermany#, Baden-Baden. . 1anda, 8. 31;;=4, NTrends in Japanese "orporate overnance#, in@ 1./. 8op D8. 1andaDJ./. .oeDA. I+meerschD6. Pri$$e 3eds.4, #ompara i%e #orpora e !o%ernance ( )he 6 a e o' he Ar and Amer$in$ .esearch, E?'ord 1;;=, pp. ;21 ( ;02H A. )a,ahashi, ?)he >u ure o' /apanese#orpora e !o%ernance5 )he 2005 .e'ormP, 10 -eitschrift fuer Japanisches 3echt@Journal of Japanese Law 35 320054. EA#:, N overnance in "hina#, Paris 2005 . )he hierarch+ o' rule-ma,in$ 'rom pri%a e orderin$ on he le%el o' con rac s be -een pri%a e par ies and public orderin$ on he cons i u ional le%el is bein$ discussed in@ 1. 8omannD#h. 1irchner, N ;rdnun!sethi+#, in@ 10 /ahrbuch 'uer Geue Poli ische Ee,onomie 1=;, 1;; ( 205 31;;54. . )he dis inc ion is no- bein$ in roduced 'or he purpose o' de'inin$ companies subFec o he obli$a ion o prepare consolida ed accoun s on he basis o' Tin erna ional accoun in$ s andards"H .e$ula ion 3A#4 Go 1606D2002 o' he Auropean Parliamen and o' he #ouncil o' 1; /ul+ 2002 on he applica ion o' in erna ional accoun in$ s andards, ;fficial Journal of the European "ommunities 7 203D1 o' 6ep . 11, 2002.

16

17

1=

1;

20

21 22

23 20

25 26

. . 27 . 2= . 2; . 30 . 31 . 32 .

. )he so-called business Fud$emen rule has been incorpora ed in o Ar . ;3 sec. 1 sen ence 2 o' he !erman 6 oc, #orpora ion Ac b+ he 7a- on corpora e in e$ri + and modernisa ion o' he s oc, corpora ion ac 39JA!4 -i h e''ec 'rom Go%. 1, 2005. . )he means-and-ends paradi$m is bein$ discussed in@ J.A. 6 rei , NTheorie der :irtschaftspoliti+#, 6 h ed., 6 u $ar 2005, p. 270H a me hdolo$ical cri i*ue o' ha paradi$m is bein$ 'ormula ed in@ 1. 8omann, N$ie Interdependen) von -ielen und 9itteln#, )uebin$en 1;70. . Er$anisa ion@ I. Geus, NEinfuehrun! in die Betriebswirtschaftslehre#, 0 h ed. )uebin$en2005, pp. 157 ( 161H !. 6chre+oe$$DA. %. Ierder, Er$anisa ion, in@ !. 6chre+oe$$DA. %. Ierder 3eds.4 N Handwoerterbuch Unternehmensfuehrun! und ;r!anisation#, 0 h ed. 6 u $ar 2000, pp.;66 ( ;77H .. .ich erDA. >urubo n, N0eue Institutionenoe+onomi+# , 3rd ed. )uebin$en 2003, pp. 10, 11. . .. 8. #oase, N)he Ge- Cns i u ional AconomicsP, in@ 100 -eitschrift fuer die !esamte Staatswissenschaft@Journal for Institutional and Theoretical Economics , 6. 22; ( 231 31;=04H .. 8. #oase, NThe .irm, the 9ar+et, and the Law#, #hica$o 1;==H J. ArleiDJ. 7esch,eD:. 6auerland, N0eue Institutionenoe+onomi+# , 6 u $ar 1;;;H P. Jil$romD/. .ober s, NEconomics, ;r!ani)ation and 9ana!ement, En!lewood "liffs# 1;;2H :. Gor h, NStructure and "han!e in Economic History#, Ge- Oor, 1;=1H A. Pico D6. 6chuller, NInstitutionenoe+onomie#, in@ !. 6chre+oe$$DA. %. Ierder 3eds.4 NHandwoerterbuch Unternehmensfuehrun! und ;r!anisation#, 0 h ed. 6 u $ar 2000, pp. 510 ( 522H .. .ich erDA. >urubo n 3>n. 1=4H 6. Voi$ , NInstitutionenoe+onomi+#, 6 u $ar 2002H. . /. 8irshlei'er, N)he A?pandin$ :omain o' AconomicsP, in@ 75 2merican Economic 3eview, 53 ( 6= 31;=54H !. 1irch$aessner, Q:ie neue Iel der U,onomieN, in@ 10 2nalyse A ,riti+, 107 ( 137 31;==4H !. 1irch$aessner, , Q;e+onomie als imperial&istisch'e :issenschaft< -ur 2nwendun! des oe+onomischen >erhaltensmodells in den benachbarten So)ialwissenschaften? , in@ 7 /ahrbuch 'uer Geue Poli ische Ee,onomie, 12= ( 105 31;==4. .. .ich erDA. >urubo n 3>n. 1=4, p. 7@ A. Pico D6. 6chuller 3>n. 1;4, p. 516. . )he dis inc ion be -een old and ne- ins i u ional economics is bein$ discussed in@ ).I. 8u chison, NCns i u ional Aconomics Eld and Ge-P, in@ 100 Journal for Institutional and Theoretical Economics, 20 ( 2; 31;=04H A. Pico D6. 6chuller 3>n. 1;4, p. 517, 51=. 1. 8omannD#h. 1irchner 3>n. 104. . /. J. /ames J. 31;;04, Q)he domain o' cons i u ional economicsN, in@ 1 "onstitutional %olitical Economy, 1 - 1= 31;;04H C. Pies, N0ormative Institutionenoe+onomi+< -ur 3ationalisierun! des politischen Liberalismus#, )uebin$en 1;;3. 6. Voi$ 3>n. 1;4, pp. 250 ( 257. .ela ional con rac sH e? pos oppor unismH hold-ups BerleDJeans 96-corpora e $o%ernance-models 1irchnerD.ich er Vi a aus 1irchnerD.ich er .aFan DVin$ales Cndepen direc ors@ ????