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Corporate Governance

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Ata Rahmani
added 2 research items
This article which involves a comparison between the company laws of England and Iran concerns the question of why of majority and minority shareholders, only the former should have the final say in corporations. It will examine three important theories of political, economic and doctrinal which have been relevant to found the rule of majority in English and Iranian corporations. While the two systems share the foundations for the rule of majority, they have diverged in the choice of their model of corporate governance. The former is a major member of the Anglo-American model of corporate governance whereas the latter pursues the continental Europe model. In the light of a cultural, political and economic background examination of the two systems, the article will also provides some answers for the question of how such divergence occurred in the two systems.
While English company law traditionally supports the idea of shareholder control, some company law theorists have recently challenged it. In particular, it is accused of being unprofessional and discriminatory. Inexperienced and dispersed shareholders should not be allowed to take governance decisions at the exclusion of a number of non-shareholder interest groups. This article concerns three questions: what shareholder control means, how it works and why shareholders should control corporations. It will describe the very concept of shareholder control and examine three important theories; namely, the contractarian, the stakeholder and the shareholder control theories that are relevant to the debate over shareholder control in corporations. It will also examine the company law of England and Wales in order to see how the formal corporate governance scheme has reconciled these competing theories. Keywords: Corporate governance, shareholder control, stakeholder theory, contractarian theory.