Comparative Corporate Governance

20 Pages·2011·0.13 MB·English

ComparativeCorporateGovernance

Comparative
Corporate
Governance
An Overview on US and Some EU Countries’
Corporate Legislation and Theory
Rado Bohinc
Management
ComparativeCorporateGovernance:
AnOverviewonUSandSomeEUCountries’
CorporateLegislationandTheory
prof.dr.RadoBohinc
Reviewers·Prof.Dr.ŠimeIvanjko
andProf.Dr.MarijanKocbek
Publishedby·UniversityofPrimorska,
FacultyofManagementKoper,
Cankarjeva5,6104Koper
Designandtypesetting·AlenJežovnik
Print-run·300
December2010
©2010RadoBohinc
Publishedwiththesupport
fromtheSlovenianBookAgency
CIP–Kataložnizapisopublikaciji
Narodnainuniverzitetnaknjižnica,Ljubljana
347.722
BOHINC,Rado,1949–
Comparativecorporategovernance:anoverviewonUSandsome
EUcountries’corporatelegislationandtheory/RadoBohinc.–
1sted.–Koper:FacultyofManagement,2010
ISBN978-961-266-065-9
COBISS.SI-ID254078976
Table of Contents
Introduction·21
PartOne CorporateGovernanceinGeneral
1 GeneralTheoryonCorporateGovernance·26
1.1 TheMeaningofCorporateGovernance·26
1.2 CorporateGovernanceinthePostTransitionCountries·28
1.3 ComparativeLawMethod·29
2 TheMainOpenIssuesofCorporateGovernance·32
2.1 TheEuropeanDimensionofTransition·32
2.2 EuropeanCorporateGovernance·33
2.3 One-TierorTwo-TierBoards·35
2.4 TheSplittingupofPower·37
2.5 AbandoningtheConceptofShareholders’Sovereignty?
Shareholders’Activism?·38
3 SourcesofLaw·41
3.1 GeneralonInterpretationandHierarchyoftheCorporateLaw·41
3.2 NationalCorporateorCompanyLaws·42
3.3 TheCorporateGovernanceCodes·44
3.4 EUDirectivesontheFieldofCompanyLaw·44
3.5 CommunityRegulationsontheFieldofCorporateLaw·46
3.6 CommissionRecommendationsontheFieldofCorporateLaw·47
3.7 MainEUSourcesofSecuritiesMarketLaw·48
4 OECDPrinciplesofCorporateGovernance·49
4.1 GeneralonOECDPrinciplesofCorporateGovernance·49
4.2 TheMeaningofCorporateGovernance·50
5 OECDGuidelinesforStateOwnedEnterprises·59
5.1 PublicUndertakings·59
5.2 EUDirectivesonPublicUndertakings·59
5.3 StateOwnedEnterprises·60
5.4 OECDStateOwnedEnterprises’Guidelines·61
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TableofContents
PartTwo TypesofBusinessOrganizationsandOwnershipStructure
6 Corporations(Companies),PartnershipsandSoleTraders·68
6.1 GeneralonTypesofCompanies·68
6.2 CorporationsandPartnerships·70
6.3 DistinctionbetweenStructuresandConsequences·71
6.4 CommercialCompaniesandCivilAssociations,
SoleProprietorship·71
6.5 EconomicInterestGrouping·72
6.6 Companies,Cooperatives,PrivateInstitutions,Foundations,
andSocietiesasNon-ProfitAssociations·72
6.7 PartnershipsandCompanieswithShareCapital·73
6.8 SimilaritiesandDistinctionsbetweenCompanies
andPartnerships·74
6.9 CommercialandCivilPartnerships·76
6.10 SpecialFormsofCompanies·77
7 OwnershipStructuresintheUSandEUCorporations·81
7.1 TheGovernanceConsequencesoftheOwnershipStructure·81
7.2 GeneralonOwnershipStructuresinSomeEUCountries·83
7.3 OwnershipStructuresinAustria,Belgium,Germany
andFrance·85
7.4 OwnershipIssuesinPostTransitionalCountries·89
PartThree CorporateGovernanceintheEU
8 GeneralonEUCompanyLaw·98
8.1 TheHarmonizationofEUCompanyLaw·98
8.2 TypesofCompaniesintheEU·99
8.3 GeneralonCorporateGovernanceSystemsinSomeEU
Countries·100
8.4 TheSystemsofBoards’StructureintheEUCountries·101
8.5 CompositionoftheSupervisoryBoard·102
8.6 SomeRecommendationsfromtheWintersReport·103
9 DirectivesintheFieldofCompanyLaw·104
9.1 FirstCouncilDirective(Disclosure)·104
9.2 SecondCouncilDirective(Capital)·106
9.3 FourthCouncilDirectiveontheAnnualAccounts·107
9.4 SeventhDirectiveonConsolidatedAccounts·110
9.5 EleventhDirectiveonBranches·112
9.6 TwelfthDirectiveonSingleMemberPrivateLimitedLiability
Companies·114
9.7 ThirdandSixthDirectives(MergerandDivision)·114
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TableofContents
9.8 DirectiveonTakeoverBids·115
9.9 OtherDirectivesintheFieldofCompanyLaw·116
10 EUCompanyLawRegulationsandRecommendations·118
10.1 EUCompanyLawRegulations·118
10.2 EUCompanyLawRecommendations·118
10.3 OtherLegalActsintheFieldofCompanyLaw·119
10.4 CommunicationfromtheCommissiononSBE·120
11 EuropeanCompany,SocietasEuropea,SE·121
11.1 GeneralonSE·121
11.2 Formation·122
11.3 TheTwo-tierSystemofCorporateGovernanceofSE·122
11.4 TheOne-tierSystemofGovernanceofSE·125
11.5 RulesCommontotheOne-tierandTwo-tierBoardSystems·126
11.6 ConditionsofMembership·126
11.7 JurisdictionofSE·128
11.8 EmployeeParticipationintheSE·128
12 EuropeanCooperativeSociety(ECS)·131
12.1 GeneralonECS·131
12.2 TheFormationofanECS·132
13 EuropeanEconomicInterestGrouping(EEIG)·133
13.1 CouncilRegulationonEEIG·133
13.2 FormationofanEEIG·133
13.3 GovernanceofEEIG·134
14 EURecommendationontheRoleofNon-Executive
orSupervisoryDirectorsofListedCompanies·135
14.1 IndependentNon-executiveorSupervisoryDirectors·135
14.2 ProfileofIndependentNon-ExecutiveorSupervisory
Directors·136
PartFour CorporateGovernanceintheUSA
15 CorporateLawintheUSA·140
15.1 SourcesofUSCorporateStateandFederalLaw·140
15.2 ModelBusinessCorporationAct·141
16 GeneralonUSCorporations·142
16.1 TypesofBusiness·142
16.2 CorporateName,RegistrationOffice·142
16.3 IncorporatorsandArticlesofIncorporation·143
16.4 SharesofPreferredorSpecialClasses·144
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TableofContents
17 TheoreticalBackgroundonCorporateGovernanceintheUSA·145
17.1 SomeTheoreticalIssues·145
17.2 Contra-Managerial(Hegemony)Theory·146
17.3 AgencyCostTheory·146
17.4 RelationalTheoryofBoards(PowerCoalitionTheory)·147
17.5 TheoriesontheNatureoftheCorporation·148
17.6 TheNexusTheoryoftheCorporation(ContractarianModel)·151
17.7 SomeCommentsontheNexusTheory·152
18 StatutoryRegulationoftheUS’BoardofDirectors·155
18.1 DirectorsandOfficersofaCorporation·155
18.2 InitialRegisteredAgentsorInitialDirectors·155
18.3 USSingleBoardSystem·156
18.4 SupervisoryFunctionoftheBoardofDirectors·158
18.5 Shareholders’AgreementonPowersoftheUSBoard·159
18.6 OutsideDirectors·161
18.7 IndependentDirectors·164
18.8 CommitteesoftheBoardofDirectors·165
18.9 NumberandQualificationsRequirementsintheUSA·168
18.10 CumulativeVoting·169
18.11 USClassifiedBoard,FillingofVacanciesontheUSBoard·171
18.12 ShareholdersMeeting·171
PartFive CorporateGovernanceintheUnitedKingdom
19 UnitedKingdomCompanyLawReform·174
19.1 SourcesofUKCompanyLaw·174
19.2 TheCompanies(ModelArticles)Regulations2008·175
20 ClassificationofCompanies·177
20.1 LimitedandUnlimited,PrivateandPublicCompanies·177
20.2 TypesofCompaniesintheUK·177
20.3 GeneralonCompanies·178
20.4 PrivateLimitedCompanies·178
20.5 PublicLimitedCompanies·178
20.6 UnlimitedCompanies·179
20.7 CompaniesLimitedbyGuarantee·179
20.8 CharitableCompanies·180
20.9 LimitedLiabilityPartnerships·180
20.10 SoleTrader·180
21 FormationofaCompany·181
21.1 GeneralonFormationofaCompany·181
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TableofContents
21.2 Name,RegisteredOffice·181
21.3 Objects·182
21.4 AssociationClauseandSubscription·182
21.5 Capital·182
21.6 TheRaisingofCapital·183
21.7 IssueataDiscount,atPremiumandforOther
Considerations·184
21.8 PurchasedbyCompanyofitsOwnShares·184
21.9 TransferofShares·184
22 CorporateGovernanceintheUK·186
22.1 TheDivisionofPowers·186
22.2 CompositionoftheBoardofDirectors·187
22.3 PowersofDirectors·187
22.4 AppointmentofDirectors·188
22.5 RemovalofDirectors·189
22.6 Qualification,VacationofOffice·189
22.7 Decision-MakingbyDirectors·190
22.8 BoardMeetings·191
22.9 Committees·192
23 NatureofthePositionofDirector·193
23.1 DirectorsasLegalAgentsoftheCompany·193
23.2 PowerofDirectorstoBindtheCompany·194
24 TypesofDirectorsinUKLaw·195
24.1 ExecutiveandNonExecutiveDirectors·195
24.2 AlternateDirector·196
24.3 DeFactoandShadowDirectors·196
24.4 PersonsConnectedwithaDirector·196
24.5 Director‘Controlling’aBodyCorporate
andAssociatedBodiesCorporate·197
25 DutiesandLiabilitiesofDirectorsunderUKLaw·199
25.1 GeneralonDutiesofDirectorsunderUKLaw·199
25.2 Directors’FiduciaryDuties·201
25.3 DutytoActwithinPowers·201
25.4 DutytoPromotetheSuccessoftheCompany·202
25.5 DutytoExerciseIndependentJudgment·203
25.6 DutytoAvoidConflictsofInterest·203
25.7 DutynottoAcceptBenefitsfromThirdParties·204
25.8 DutytoDeclareInterestinaProposedTransaction
orArrangement·204
25.9 Directors’LiabilitiesunderUKLaw·206
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TableofContents
26 ConflictofDirectors’DutiesandInterests·208
26.1 GeneralonConflictofInterest·208
26.2 DeclarationofinterestinanExistingTransaction
orArrangement·209
26.3 TransactionRequiringtheApprovalofMembers·210
26.4 Directors’Long-TermServiceContracts·211
26.5 SubstantialPropertyTransactions·211
26.6 Loans,Quasi-LoansandCreditTransactions·213
26.7 PaymentforLossofOfficetoaDirector·214
26.8 AdditionalRequirementsforMembers’Approval·214
26.9 CivilConsequencesofPaymentsMadewithoutApproval·215
PartSix CorporateGovernanceinGermany
27 SourcesofGermanCompanyLaw·218
27.1 GermanLegalSystem·218
27.2 GermanCompanyLaw·218
27.3 TheGermanCorporateGovernanceCode·221
28 PartnershipsandCompaniesinGermany·222
28.1 CivilandCommercialPartnerships·222
29 PublicLimitedCompany,JointStockCompany,
StockCorporation(Aktiengesellschaft)·224
29.1 Formation(Gründung)ofanAG·224
29.2 Name·225
29.3 RegisteredOffice·225
29.4 Object·225
29.5 OneManLimitedCompany·226
30 CapitalofanAG·227
30.1 TypesofShares·227
30.2 ParorNon-ParValueShares·228
30.3 OwnShares·228
30.4 DebenturesorBondsofanAG·229
31 GeneralonGermanCorporateGovernance·231
31.1 BasicStructureofGermanCorporateGovernance·231
31.2 CorporateGovernanceintheGermanCorporateGovernance
Code·232
31.3 TheTwo-TierSystemisCompulsoryforAG·233
31.4 TheManagementBoardManagesatitsOwnResponsibility·234
32 ManagementBoard·235
32.1 DutiesoftheManagementBoard·235
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