CORPORATE GOVERNANCE AS A LIMITED LEGAL CONCEPT

The concept of corporate governance has come under intense public scrutiny in recent years. Business people everywhere are asking: What exactly does ‘good’ corporate governance entail? Which aspects of it are legally binding, and in what ways is it merely a set of expectations on how corporations should be organized ideally? Nowhere are these important questions answered more precisely - nowhere are the lines more clearly drawn - than in the insightful synthesis of statutory law, case law, and organizational theory presented in this book.

Recognizing that the concept of ‘good’ corporate governance is not dramatically different from one jurisdiction to another but represents an international phenomenon that has to a reasonable extent the same characteristics everywhere, the author proceeds, with detailed analysis, through a series of issues that (he shows) make up the brunt of corporate governance. Each of these issues in turn gives rise to such specific problem areas as the following:

board compensation and executive compensation;
unitary and dual board structures;
monitoring management;
legal parameters of ‘mismanagement’;
the ‘supervisory gap’;
audit, selection and appointment and remuneration committees;
director tenure and retirement policy;
risk management and risk reporting;
corporate safety culture;
conflicts of interest;
whistleblower arrangements;
aims of the regulation of public takeover bids; and
defensive tactics in case of a hostile public takeover bid.

These problems - and many others - are examined in the light of corporate governance codes and guidelines and of reports and judgments that deal with specific instances where investigators or courts were asked to analyze corporate governance issues in concrete cases. Each of the ten chapters includes in-depth analysis of such cases. A special feature of the book is a set of model corporate governance guidelines based on US corporate practice.

Corporate Governance as a Limited Legal Concept is remarkable for its very thorough characterization and definition of corporate governance as a legal concept, as a code of conduct, and as an organizational structure. The author’s clearly reasoned analysis of the legal limits of corporate governance will be of great interest and practical value to business people and their counsel in any jurisdiction.