Tuesday, April 24, 2007

Hopt on Comparative Company Law in the 20th Century

Klaus J. Hopt, Max Planck Institute for Private Law and the European Corporate Governance Institute (ECGI) has just posted an essay, Comparative Company Law, published recently in The Oxford Handbook of Comparative Law. Here's the abstract:
The developments of company law in countries belonging to five legal families illustrate the principle-agent conflicts that company law faces and the range of solutions it offers to cope with them. Comparative company law is about learning from each other's experience in a competitive way, and solving together the cross-border problems arising for and from companies that are facing global competition. Comparative company law today is conceived and created equally by legislators, lawyers, academics, and courts. Examples include the influence of German, French, and U.S. law on company law codifications in Japan and other countries, the legal practice in regard to cross-border transactions, the worldwide growing presence of academic comparative research, and last but not least the decision-making of the European Court of Justice.
The driving forces of comparative company law can be traced back to the spread of the 1930s' U.S. securities regulation into European Union member states, Eastern European states, and also China; the harmonization efforts of the European Community since the late 1950s; and most recently, the international rise of the corporate governance and code movements in the 1990s that had some famous origins in the United Kingdom. This leads to modern challenges such as the pros and cons of self-regulation in company law and beyond.
From a broader perspective, there is a need for the adjustment of company and capital market law in all the legal families considered. In this respect, comparative company law is a highly promising source for exploring the key issues, including convergence and divergence in company and capital market law, harmonization versus regulatory competition, and the means and institutions that provide for operative enforcement. Comparative research, together with economic and empirical analysis, will thus contribute to an understanding of the real functioning of company law - a core task for the future of the European internal market, but also beyond in a globalized world.