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Corporate governance and labour law: Situating Australia's `regulatory style'
Abstract
This article gives an overview of the `varieties of capitalism' and `legal origins' literature to develop a stylised model of various complementarities between corporate governance and the management of labour, with an emphasis on the role of corporate law and labour law. The authors then apply this model to interrogate the development of Australian labour law and corporate law, and consider whether a case can be made for an Australian exceptionalism.
... Even though ownership is generally dispersed in Anglo systems (Crossland, 2007), Marshall, Mitchell, and O'Donnell (2009:158) argue that "in Australia share ownership is relatively concentrated with similarities to countries such as France, Spain and Italy" (see also La Porta, Lopezde-Silanes, Shleifer, & Vishny, 1999). The Australian employment system, with its arbitration and conciliation system and its compulsory nature of award setting, is characterized by higher labor protection than in other LMEs, although recent changes to employment law have lessened this protection (Marshall et al., 2009). Disclosure of social and environmental performance is, however, not required by law. ...
Empirical
This study seeks to capture the influence of national institutions and industry characteristics on CSR reporting. To explore national institutions, the paper compares CSR reporting in France and Australia characterized respectively as state-led market economies (SLMEs) and liberal market economies (LMEs). Comparisons are also made between high-risk and low-risk industries. The interaction between the two main variables is also analyzed.
Using corporate published data from a sample of 220 Australian and French companies in 2009, the research finds that CSR reporting is stronger and CSR practices more transparent in France compared to Australia. CSR reporting is also stronger in high-risk industries than in low-risk industries. It also found that industry characteristics override the influence of national institutions in high-risk industries. However, these conclusions vary depending on the sub-categories of CSR reporting and the implicit versus explicit form of this type of communication.
This study develops a new model of CSR reporting using 99 items. It provides empirical support for the institutional perspective for understanding differences in reporting whilst demonstrating the interaction between industry risk characteristics and national institutions.
The study offers insights to policy makers interested in promoting CSR accountability and transparency. It especially raises the importance of regulation to develop corporate reporting practices. It also provides insights to managers to identify relevant CSR practices within their country/industries and the different communication strategies that they can adopt in responding to institutional pressures.
This new book, published by Ashgate, examines how businesses manage their labour systems, and particularly how they manage the complex interaction of various factors which give rise to instances of ‘partnership’ style relations between businesses and their employees. The book draws from the literature concerning ‘Varieties of Capitalism’ (VoC) and the different institutional and regulatory designs inherent in different types of political economy. The book is informed by an extensive set of empirical data constructed by the authors, which examines the activities of business corporations in Australia, their outlooks and relationships with stakeholders, and relates these to new and evolving theoretical frameworks based in political economy and law. The book places the Australian regulatory model within this international debate, and assesses the extent to which the system does or does not fit into the general categorisation created in the VoC literature.The chapters of the book are: 1. Corporate governance, employment systems and workplace partnerships in Australia. 2. Law and regulatory style in Australian corporate governance and employment systems. 3. Corporate governance and the management of labour: contemporary business practices in ten Australian companies. 4. Attitudes and outlooks of Australian company directors to stakeholders: the survey data. 5. The interaction of corporate governance and labour management in Australian companies: an analysis.
This article begins by outlining the historical evolution of corporate-governance systems in five major countries: the United States, Britain, Germany, France, and Japan. It then examines the major causal arguments advanced to account for diachronic variations within the country cases as well as synchronic variations between them. The article also highlights some empirically significant phenomena obscured by the framework of the current debate and suggests some ways in which their reintegration may provide greater purchase on the problems of transformation and recomposition thrown up by the debate itself. It discusses some insights of an older historical literature on corporate governance. Finally, the article concludes that the entire contemporary debate could benefit from more careful archival scholarship on the development of corporate governance regimes across the major countries.
This paper examines legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries. The results show that common-law countries generally have the strongest, and French-civil-law countries the weakest, legal protections of investors, with German- and Scandinavian-civil-law countries located in the middle. We also find that concentration of ownership of shares in the largest public companies is negatively related to investor protections, consistent with the hypothesis that small, diversified shareholders are unlikely to be important in countries that fail to protect their rights.
This essay surveys economic thought in Britain and the United States to assess the influence that economists have had on developments in the marketplace and in government (and also to show reverse causation; economic thinking is less free of historical circumstances than economists appreciate). Next it examines whether recent Anglo-American developments are reproducing themselves in other parts of the world, that is, whether we see synchronous swings from status to contract in continental Europe and Japan. Finally, the essay asks what the future holds in store for labor and employment policy: will we see a continued pulsing of Polanyi's double movement or a triumph of the liberal Anglo-American model?
This book is about the relationship between corporate governance regimes and labour management. It examines how finance and governance influence employment relationships, work organization, and industrial relations by means of a comparative analysis of Anglo-American, European, and Japanese economies. The starting point is the distinction widely found in the corporate governance, business systems, and political economy literature between countries dominated by 'shareholder value' conceptions of corporate governance and those characterized by 'stakeholder' regimes. By drawing on a wide range of countries, the book is able to demonstrate the complexities of corporate governance arrangements and to present a more precise and nuanced exploration of the linkages between governance and labour management. Each country-based chapter provides an analysis of the evolution and key characteristics of corporate governance, and then links this to labour management institutions and practices. The book goes beyond the 'complementarities' between governance and labour management systems identified in recent literature, and attempts to identify causal relationships between the two. It shows how labour management institutions and practices may influence finance and corporate governance systems, as well as vice versa. The chapters in this book illuminate current debates about the determinants of corporate governance, the convergence of national 'varieties of capitalism', and the impact of corporate governance on managerial behaviour. The book highlights the complexities of corporate governance systems and refines the distinction between market/outsider and relational/insider systems.
The corporate world today subdivides into rival systems of dispersed and concentrated ownership, with different corporate governance structures characterizing each. Various corporate governance experts have argued that ownership concentration is a consequence of poor legal protection of shareholders. The experience in the United Kingdom casts doubt, however, on the extent to which legal regulation matters in the corporate governance context. Developments in Britain suggest that a highly specific set of laws governing companies and financial markets do not have to be in place in order for dispersed share ownership and strong securities markets to develop. Instead, alternative institutional structures can perform the function that "law matters" advocates say the legal system needs to play. Copyright 2001 by the University of Chicago.
We present data on ownership structures of large corporations in 27 wealthy economies, making an effort to identify ultimate controlling shareholders of these firms. We find that, except in economies with very good shareholder protection, relatively few of these firms are widely-held, in contrast to the Berle and Means image of ownership of the modern corporation. Rather, these firms are typically controlled by families or the State. Equity control by financial institutions or other widely-held corporations is less common.
What is the link between working life and the nature of production on the one hand, and the changing organization of the firms and institutions in which work and production take place? In this book leading socio-economic theorists analyse how these have changed over the last two decades. They look at changing employment practices and systems of work, and link these to political, social, and institutional reforms; the degree of continuity and change in working life, the attitudinal and behavioural consequences of recent changes in the world of work, and the implications of these changes for worker health and well-being.
The article first examines the rationale for representative participation, and the circumstances under which it has spread internationally. It then surveys the existing data for representative participation in Australia, and presents a case for legislation to introduce a generalised system of German-style works councils. The paper concludes that the first step towards this end should be the instigation of a major research agenda to discover more regarding the elements of historical and contemporary practice which have accounted for success and failure in representative participation in Australia.
Empirical evidence from the United States indicates a statistically significant relationship — but not a particularly strong economic relationship — between the CEO’s remuneration and corporate performance. In Australia, the limited number of studies in this field have found that CEO pay is related to company size (the larger the company, on average the higher the pay) but is not linked in any clear way to corporate performance. This article analyses the factors which may explain the lack of a strong link between executive pay and company performance in Australia. Some of these are consistent with the board-capture theory articulated by Bebchuk and Fried.
When Australia deregulated its economy in the 1980s, political pressures built up leading in the 1990s to the dismantling of Australia's industry-wide conciliation and arbitration systems. New laws established regimes of collective bargaining at the level of the employing undertaking. This article analyzes the 1993 and 1996 federal bargaining laws and argues that they fail to protect the right of trade unions to bargain on behalf of their members. This is because the laws do not contain a statutory trade union recognition mechanism. The recognition mechanisms in the Common Law countries of the United States, Canada, Britain and New Zealand are examined, and it is argued that Australia should enact trade union recognition mechanisms that are consonant with its industrial relations history and practice.
This chapter begins with an explanation of the focus of the book: corporate governance and labour management. It then discusses national systems of corporate governance and labour management and mechanisms linking corporate governance and labour management. An overview of the chapters included in this volume is presented.
This chapter defines regulation as an activity that is aimed at 'influencing the flow of events'. It analyses changes in the understanding of corporate law that are wrought by the high level of interest in regulation. It argues that regulation is transforming the understanding of the content of corporate law. Furthermore, it holds that the category of law known as 'corporate law' is being transformed into a broader category of rules called corporate governance. It claims that it is useful to think of corporate governance as a body or category of law as well as a body of governance practices, processes, and structures.
According to the ‘disorganization thesis’, industrial change – namely economic international iration and the expansion of
the service sector – is expected to cause a shift from non-market governance institutions to the market. On the basis of a
cross-sectional and longitudinal analysis, this paper examines this assumption with regard to labour relations systems, using
collective bargaining coverage as an indicator of a system's degree of organization. Disorganization would mean a negative
association between industrial change and coverage, as well as a unidirectional decline in coverage over time. No evidence
of this can be found. Instead, diversity and divergence prevail among countries. This is because the specific pattern of how
bargaining is embedded in labour relations mediates the effects of industrial change. There is a divide between two distinct
bargaining patterns: that is, an inclusive one with largely stable coverage, and an exclusive one which indeed recorded a
decline in coverage. The paper concludes by discussing the future prospects for bargaining and die theoretical implications
of these empirical findings.
Using internal records of board meetings, this research explores issues relating to the motivation of directors’ action during takeover negotiations. The records relate to a time period when regulation was low and directors had ample opportunity to engage in adverse selection and moral hazard. In such circumstances, it might be supposed that they would have sought to protect their own tenure rather than seek to maximize shareholder wealth by recommending acceptance of a bid. However, in the case study under examination the directors worked hard to maximize the bid price by auctioning the company despite having little equity exposure themselves. The directors also sought to protect the interests of the staff when negotiating with bidders. Intentionally this behaviour was not disclosed to the shareholders and, on occasion, threatened the success of the negotiations. The article concludes that the actions of the directors were motivated by strong reputational effects not widely recognized in the contemporary literature as being a force that powerfully drives corporate governance.
Australia. That project was undertaken jointly with Australian Business Limited (ABL). The Australian Council of Trade Unions (ACTU) also made a financial contribution toward the research that is summarised in this paper. The views expressed in this paper are those of the authors alone and are not necessarily supported by the ARC, ABL or ACTU.
The history of Australian company law has attracted remarkably little attention in academic literature, perhaps because it has been mainly seen as a copy of English law with few if any important features worthy of note. This paper seeks to point out several interesting and significant aspects of the evolution of Australian company law and to consider this evolution in the context of the economic development of colonial Australia. Australian company law represents an example of the transplant of English law. This raises the question whether this transplant of law was successful. The central contention of this paper is that the evolution of company law in colonial Australia was innovative and responsive to the economic needs of the society and in particular, it was instrumental in financing the development of the mining industry which played an important role in the economic success of colonial Australia.
Market forces allegedly are serving to destabilise traditional business structures and cause some form of convergence along "Anglo-American" lines. While this trend has been the subject of much debate, it has not been widely commented on in Australia. Moreover, those analysing corporate governance from a comparative perspective have had little to say about the country. Since Australia shares much in common with the US and the UK, those interested in a possible Anglo-American convergence trend can potentially benefit from examining Australian developments. This paper identifies various questions that require analysis to place the country's experience in its proper context. Answers are offered for the questions raised but the primary purpose of the paper is to launch a dialogue between Australians interested in corporate governance and their counterparts elsewhere.
The 2005 ‘Work Choices’ legislation builds on earlier legislative and policy measures of the Howard Coalition Government that have restricted the activities and undermined the traditional legal rights of unions. This article highlights the key aspects of the 2005 legislation affecting trade unions. The constitutional basis of the new framework for regulating registered organisations is considered, as it presents unions with the challenge to revisit the validity of their registration under Federal law or to ‘opt out’ of registration altogether. The new union ‘right of entry’ provisions provide employers with far greater scope to resist or limit unwanted union influence at the workplace. Amendments to the ‘freedom of association’ provisions will restrict unions’ capacity to engage in a range of tactics to support the collective representation of workers’ interests, and limit their ability to block de-unionisation or individualisation strategies by employers. We conclude that the 2005 Act constitutes the most serious threat to Australian unions yet, but that the high-profile debate generated by the reforms, and the erosion of conditions which will inevitably follow for some workers, provide opportunities for unions to re-establish their relevance and reverse declining membership levels.
This article concerns the classification of the corporate governance system of Australia’s listed market. Claims are often made that it is an outsider system of ownership and control, similar to that of the UK and the US. Through an examination of share ownership patterns, institutional investor activism, private rent extraction, the market for corporate control and blocks to information flow, this article argues that the corporate governance system of Australia’s listed market in fact has many of the characteristics associated with insider systems. The misclassification of the corporate governance system of Australia’s listed market has significant impacts for the general classification of insider and outsider systems, as it may be an example of an insider system converging to an outsider system. The misclassification also has significant impacts for the Australian reform agenda, as reforms based on the assumption that the Australian listed market has an outsider system of corporate governance may be inappropriate and damaging.
When Australia deregulated its economy in the 1980s, political pressures built up leading in the 1990s to the dismantling of Australia’s industry-wide conciliation and arbitration systems. New laws established regimes of collective bargaining at the level of the employing undertaking. This article analyzes the 1993 and 1996 federal bargaining laws and argues that they fail to protect the right of trade unions to bargain on behalf of their members. This is because the laws do not contain a statutory trade union recognition mechanism. The recognition mechanisms in the Common Law countries of the United States, Canada, Britain and New Zealand are examined, and it is argued that Australia should enact trade union recognition mechanisms that are consonant with its industrial relations history and practice.
This article presents the results of a study of court judgments resulting from use of the oppression remedy by shareholders. Issues addressed include: trends in the use of the oppression remedy; the types of companies involved in oppression actions (private or public company; number of shareholders in the company); the allegations pleaded by plaintiffs; the remedy sought by plaintiffs; the remedy granted by courts; and the tests used by courts.
The economic importance of directors, the increasing intensity of debate about their functions and accountability, and the continuing public interest in the subject of company directors make this book a timely publication. Company Directors: Principles of Law and Corporate Governance is a detailed, scholarly and comprehensive analysis of law and governance as they relate to Australian company directors. In particular, the duties of company directors, remedies for breach of these duties, and the structure and operations of the board of directors are examined. Commentary on corporate governance, as it relates to company directors, is also provided. The chapters of the book are: Part A Structure and Powers of the Board of Directors 1 Issues in Corporate Governance 2 The Structure and Operations of the Board of Directors 3 Directors and Authority to Act for a Company 4 The Rights of Directors Part B The Duties of Directors 5 The Function and Nature of Directors' Duties 6 The Duty to Act with Care and Diligence and the Duty Not to Fetter Discretions 7 The Duties to Act in Good Faith in the Best Interests of the Company and for a Proper Purpose 8 The Duty to Avoid Conflicts of Interest and Conflicts of Duty 9 Improper Profits and the Appropriation of Corporate Property and Opportunities 10 Insolvent Trading and the Protection of Creditors 11 The Duty to Act Lawfully, with Power and within Authority 12 Duties in Relation to Meetings of Members and Financial Statements 13 The Duties and Liabilities of Directors in the Context of Capital Raising 14 Common Directorships and Nominee Directors 15 Related Parties, Termination Benefits, Insider Trading, and Other Statutory Liabilities 16 Concurrent Liability of Directors 17 Ratification of Duties; Insurance and Indemnification; Statutory Validation Part C Remedies for Breach of Duty and Enforcement 18 Remedies and Penalties 19 Members' Derivative Litigation to Enforce Directors' Duties
This book chapter is a revised version of a paper presented at a conference to mark the centenary of the decision of the House of Lords in Salomon v Salomon & Co Ltd. Few law judgments would be worthy of a major conference 100 years after they are handed down. Yet the decision of the House of Lords in Salomon v Salomon & Co Ltd continues to generate much discussion. A later judgment referred to the decision in Salomon as constituting the foundation of our modern company while one commentator refers to the decision as calamitous. The decision in Salomon remains important today because a number of the matters considered by their Lordships are still being debated. For example, when is it appropriate to grant limited liability to an organisation? This was fundamental to the decision in Salomon yet remains important today when we consider recent debates concerning whether or not certain professions such as solicitors and accountants should be able to incorporate and thereby gain the benefits of limited liability. Is it appropriate to grant limited liability to a company which, although having more than one shareholder, may in fact reasonably be described as a one person company because of the dominance of one particular shareholder? Again, this was fundamental to the decision in Salomon and we finally saw this debate resolved in Australia in late 1995 with the enactment of the First Corporate Law Simplification Act which allows a proprietary company to be formed with only one shareholder. What is the appropriate balance between protecting shareholders of a company by granting them limited liability and protecting unsecured creditors who will bear additional risk where shareholders have limited liability? In Salomon it was the unsecured creditors represented by the liquidator of Salomon & Co Ltd who lost. This issue remains central to a number of significant corporate law debates when we consider statutory provisions of the Australian Corporations Law which impose liability on the directors of a company which engages in insolvent trading. These statutory provisions have, as their objective, the protection of unsecured creditors. There is a further issue arising from the decision in Salomon. To what extent should corporate regulation be essentially mandatory or enabling (in the sense that regulation has, as its objective, the promotion of private agreements between participants in companies on the basis that they are typically in a better position to understand and contract for their own needs rather than the government)? How did this issue arise in Salomon? The English Companies Act of 1862 allowed companies to be incorporated with seven shareholders. The Act specifically granted shareholders limited liability. Aron Salomon had a company duly incorporated in accordance with the Act on 28 July 1892. He held 20,001 shares in the company and his wife, daughter and four sons each held one share. Once there is formal compliance with these provisions allowing for incorporation, is this sufficient to obtain limited liability? A negative reply was given by the Court of Appeal where the judges stated that more than formal compliance with the statutory provisions was required. Lindley LJ stated that the incorporation of the company cannot be disputed. However, he, along with the other judges of the Court of Appeal, did not believe that the legislature intended to give one person companies limited liability. The decision of the Court of Appeal was overturned by the House of Lords. In the chapter, I examine in greater detail issues relevant to the debate on whether corporate regulation should be mandatory or enabling. In Part II, I look more closely at mandatory and enabling systems of regulation. In Part III, I provide some examples, drawn from Australian corporate regulation, of mandatory rules which have had high costs associated with them. In Part IV, I discuss mandatory corporate disclosure rules as a case study of the mandatory/enabling debate. In Part V, I return to a key theme evident in Salomon - limited liability. Should we promote and facilitate limited liability or strictly regulate the circumstances where limited liability should be permitted? Finally, in Part VI, I turn to examine the implications of two significant recent developments (the growth of institutional investors and electronic commerce) for the mandatory/enabling debate.
Empirical evidence from the United States indicates a statistically significant relationship - but not a particularly strong economic relationship - between the CEO's remuneration and corporate performance. In Australia, the limited number of studies in this field have found that CEO pay is related to company size (the larger the company, on average the higher the pay) but is not linked in any clear way to corporate performance. This article analyses the factors which may explain the lack of a strong link between executive pay and company performance in Australia. Some of these are consistent with the board-capture theory articulated by Bebchuk and Fried.
There is growing interest in trying to explain differing corporate ownership structures in different countries. La Porta, Lopez-de-Silanes, Shleifer and Vishny (1998) find that the quality of legal protection of shareholders helps determine ownership concentration: in countries with relatively poor legal protection of investors, publicly listed companies are likely to have large blockholders. In contrast, Roe (2000) seeks to explain ownership differences in terms of politics and finds that publicly listed companies in social democracies are more likely to have concentrated ownership than their counterparts in the (non-socially democratic) United States. Bebchuk (1999a, 1999b) develops a model which predicts that the proportion of a country's publicly listed firms having a controlling shareholder depends on the size of private benefits of control in the corporate sector. Bebchuk extends his model to explain differences in ownership structure among companies in the same country. The model indicates that a company is more likely to have a large blockholder when the private benefits of control potentially available to a blockholder at that company are comparatively large. This paper examines the factors associated with ownership structure among publicly listed Australian companies. The results indicate that private benefits of control help explain the differences in ownership structure among Australian companies.
Two parallel literatures have explored differences across legal and economic systems,noting that countries can be loosely grouped into liberal vs. coordinated market economies on the one hand, and common law vs. civil law countries on the other. These two groups largely overlap. Liberal market economies (LMEs) tend to have a common law tradition, while coordinated market economies (CMEs) belong to the civil law family (French or German). This paper argues that this overlap is not coincidental. The link between legal and economic systems are social preferences reffected in basic norms, or ground rules, found in substantive and procedural laws of different countries. These ground rules are more pervasive than their specific incarnation, such as codetermination in Germany, or shareholder primacy in the United States. The paper develops a typology of ground rules, distinguishing between substantive ground rules that allocate decision making rights to either individuals or to the state/collective; and procedural ground rules that determine whether the individual or a collective (or the state) have the primary or exclusive power to seek judicial remedies. The paper uses examples from contract and corporate law to illustrate these ground rules focusing on German law, as an example for the civil law family and a CME, and the US as an example for a common law jurisdiction and LME. An important implication of this analysis is that each system is highly path dependent and that, therefore, marginal changes of specific incarnations of social preferences are unlikely to fundamentally alter the nature of each system.
NOTE: The research in this Working Paper was subsequently published in the form of the following articles: (i) Jennifer G. Hill, "Subverting Shareholder Rights: Lessons from News Corp's Migration to Delaware", 63 Vand. L. Rev. 1-51 (2010) (available at http://papers.ssrn.com/abstract=1541644) (examining News Corp's shift in domicile from Australia to the United States as a case study, or natural experiment, to assess fundamental differences in traditional shareholder rights in the US, compared to other common law jurisdictions, such as the United Kingdom and Australia. The article also explores the lessons of News Corp's reincorporation for current US reforms increasing shareholder rights, and for the anti-reform claim that if shareholder empowerment were efficient, it would already have existed in the marketplace). (ii) Jennifer G. Hill, "The Rising Tension Between Shareholder and Director Power in the Common Law World", 2010, 18 Corporate Governance: An International Review, pp. 344-359 (2010) special issue on Shareholder Activism (available at http://papers.ssrn.com/abstract=1582258) (examining key arguments in the US shareholder empowerment debate, and the increasing tension between shareholder and director power in common law jurisdications). The balance of power between shareholders and the board of directors is a contentious issue in current corporate law debate. It also lay at the heart of a controversy concerning the re-incorporation of News Corporation (News Corp) in Delaware. News Corp has recently been the subject of intense media attention due its successful bid to acquire Dow Jones & Company. Nonetheless, News Corp's move to the US, which paved the way for this victory, was neither smooth nor a fait accompli. Rather, the original 2004 re-incorporation proposal prompted a revolt by a number of institutional investors, on the basis that a move to Delaware would strengthen managerial power vis-a-vis shareholder power. The institutional investors were particularly concerned about the effect of the re-incorporation on shareholder participatory rights, and the ability of the board of directors to adopt anti-takeover mechanisms, such as poison pills, which are not permissible under Australian law. It was this latter concern, which ultimately led a group of institutional investors to commence legal proceedings in the Delaware Chancery Court in UniSuper Ltd v News Corporation (2005 WL 3529317 (Del Ch)). The News Corp re-incorporation saga highlights a number of important differences between US and Australian corporate law rules relating to shareholder rights, and provides a valuable comparative law counterpoint to the recent US shareholder empowerment debate. Other recent Australian commercial developments discussed in the article show a tension between legal rules designed to enhance shareholder power, and commercial practices designed to readjust power in favor of the board of directors. These developments are interesting because they demonstrate how some Australian companies have tried to create a de facto corporate governance regime, which mimics certain aspects of Delaware law.
This article examines how the federal Constitutions of Australia, the United States, and Canada and judicial interpretation of those Constitutions have shaped national labor law policy in each of those countries. In particular, the extent to which the distribution of federal and State/provincial legislative powers has enabled federal governments to deregulate labor laws is analyzed. In the United States, judicial interpretation of the interstate commerce clause and the pre-emption doctrine played a significant role in giving the federal government control of labor law policy. The federal collective bargaining laws, which have not been significantly amended since 1959, have enabled the emergence of a deregulated labor law model in the United States. The United States' experience is contrasted with the Canadian federal Parliament's limited control over labor relations and the difficulties it would face in deregulating Canadian labor law. In Australia, the Howard federal government has embarked on a bold experiment to use its legislative powers over corporations to create a new deregulated, national labor law regime that would see the role of the Australian states in regulating labor relations diminish. If the High Court upholds this new approach, then the Australian corporations power could play a similar role that the interstate commerce clause played in giving the United States a national collective bargaining regime.
The Takeovers Panel has developed the frustrating action policy under which the directors of a target company must seek shareholder approval for action that would frustrate a takeover bid. This policy operates in addition to the target directors' duties under common law and the Corporations Act 2001 (Cth). Although consistent with the takeovers policy requirement that target shareholders must have a reasonable opportunity to benefit from a takeover bid, the frustrating action policy represents a significant shift in the respective powers of the players in a takeover. Two key changes involve the transfer of responsibility for corporate decisions from target directors to shareholders and the increased power given to bidders through the focus of the frustrating action policy on the defeating conditions set by the bidder. In balancing the different interests involved, there remain a number of uncertainties as to how the policy will operate.
Studies of corporate governance traditionally focus on the governance problems of large publicly held firms, and policymakers' recommendations often focus on such firms. However most small firms, and in many countries, even many large companies, are non-listed. This book provides a comprehensive account of non-listed businesses and their particular governance problems. It explores current discussions and reforms in Europe, the United States, and Asia providing a state of the art account of the law and the economics. Non-listed firms encompass a vast range, from corporations with the potential to go public through family-owned firms, group-owned firms, private equity and hedge funds, to joint ventures and unlisted mass-privatized corporations with a relatively high number of shareholders. The governance of non-listed companies has traditionally been concerned with protecting investors and creditors from managerial opportunism. However, the virtual elimination of the distinction between partnerships and corporations means that an effective legal governance framework must also offer mechanisms to protect shareholders from the misconduct of other shareholders. This volume examines policy and economic measurements to develop a framework for understanding what constitutes good governance in non-listed companies. The authors examine how control is gained and explore the mechanisms that contribute to the development of a modern and efficient governance framework. The book concludes with an exploration of how the closely held firm is likely to stimulate growth and extend innovation and development. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/law//toc.html
Dieser Beitrag beschäftigt sich mit der historischen Entwicklung der Gesetzgebung zum Aktienrecht (1807-2000) als ein Faktor für die Leistung von Unternehmen und das Funktionieren von Kapitalmärkten. Die Gesetzesänderungen können als Indikatoren für die Veränderungen der allgemeinen Rahmenbedingungen verfolgt werden. Dazu gehören Veränderungen im Verhältnis Aktiengesellschaft-Staat, die Verteilung der Kontrollrechte zwischen den verschiedenen Beteiligten am Schicksal einer Aktiengesellschaft oder Veränderungen der Verantwortungsverhältnisse. Die Untersuchung zeigt auf, dass die eigentliche Herausforderung für das Aktienrecht – einschließlich der Rechtspraxis – komplexer ist als bisher in der einschlägigen Literatur vermutet. Jenseits des oft einseitig betrachteten “principal-agent”-Problems rückt insbesondere die der Aktiengesellschaft zugestandene Flexibilität zur Anpassung an eine sich rasend schnell entwickelnde Geschäftswelt in den Mittelpunkt. Rechtsvergleichend lässt sich somit feststellen, dass die Hauptunterschiede zwischen den verschiedenen Rechtssystemen weniger im rechtlichen Schutzumfang von “property rights” liegt, sondern vielmehr in ihrem Einfallsreichtum hinsichtlich von Lösungen, um die inhärente Spannung zwischen rechtlichen Kontrollstrukturen und wirtschaftlicher Flexibilität zu überwinden.
This paper provides an accounting analysis of the implications for labour of restructuring for shareholder value. It presents argument and evidence from the UK that suggests that activity-specific limits on cost recovery constrain returns on capital. These constraints encourage restructuring which aims to improve returns on capital through the reduction of labour costs. If labour loses directly, longer-term outcomes are more complex, as some workers who retain jobs may gain, and much depends on the macro context. Overall, in the context of present-day capitalism, serial restructuring is likely to be a negative process for labour that generates transitory benefits for capital. Copyright 2000 by Oxford University Press.
We explore the finding of La Porta et al. that differences in �legal origin� account for part of cross-national diversity in labour regulation and corporate governance. We suggest that the finding needs a better historical grounding and that a mechanism which might explain it has not been adequately spelled out. In search of an explanation we focus on the role of complementarities between legal and economic institutions, and in particular the part played by the distinctive �legal cultures� of the common law and civil law in setting national systems on separate pathways to economic development.
We present evidence on the evolution of labour law in five countries (the UK, USA, Germany, France and India) using a newly-created dataset which measures legal change over time. The results cast light on the claim that legal origin, or the influence of common law and civil law regulatory styles, affects the content of labour law regimes. We find some divergence between common law and civil law countries at the aggregate level but a more complex picture when the index is decomposed so as to identify changes in specific areas of labour law. We discuss the potential significance of this relatively new approach to the measurement of law for understanding the forces at work in the evolution of labour law.
The corporate world today subdivides into rival systems of dispersed and concentrated ownership, with different corporate governance structures characterising each. The United States and the United Kingdom fall into the former category and other major industrial countries tend to fall into the latter. There is anecdotal evidence that suggests market forces are serving to destabilise traditional structures and cause some form of convergence along American corporate governance lines. According to some corporate governance experts, a variable that will affect how far matters will progress is the law. They argue that because the law "matters", a transition to the US pattern of corporate governance will occur only gradually and tentatively unless there is a legal environment which is hospitable to dispersed share ownership. This paper provides evidence on the extent to which legal regulation does "matter" in the corporate governance context. The approach is historical in orientation and the focus is on the emergence of a separation of ownership and control, characterised by widely dispersed share ownership and strong managers, in the United Kingdom. The experience in Britain is instructive because, with respect to corporate governance, no other major industrial nation has more in common with the United States. Developments in the UK suggest that a highly specific set of laws governing companies and financial markets do not have to be in place to ensure that a separation of ownership and control becomes a central feature of a country's corporate governance system. Instead, alternative institutional structures can perform the function "law matters" advocates say the legal system needs to play. It is an open question, however, whether such alternatives are likely to emerge in countries where a transition to the American pattern of corporate governance could be in progress.
To foster corporate restructuring and capital market integration, the European Commission has repeatedly attempted to introduce Europe-wide takeover regulation, but has encountered strong resistance. We trace the sources of this resistance to differences in corporate governance arrangements across member states and outline the economic effects of takeover regulation, focusing in particular on possible provisions of particular relevance to the European debate. Regulation may stipulate that the same price be offered to all shareholders (a ‘mandatory bid’ rule) and/or that differentiation of voting-rights be voided when a bidder acquires a large enough portion of a firm’s shares (a ‘break-through’ rule). The impact of these and other rules depends on the existing structure of corporate ownership and control, which is very heterogeneous in Europe. And while a break-through rule promotes takeovers, a mandatory bid rule tends to prevent them. Hence, the two rules would tend to offset each other if introduced together, and introducing a strict mandatory bid rule alone would slow down corporate restructuring. We argue that hostile takeovers are a rather blunt instrument for achieving desirable contestability of control, and their regulation is only one of many corporate governance mechanisms to be honed in order to promote corporate restructuring in Europe.
— Erik Berglöf and Mike Burkart
Corporate collapses and employees' right to know: An issue for corporate law or labour law?
- A Forsyth
Forsyth, A. 2003. Corporate collapses and employees' right to know: An issue for corporate law or labour
law? Australian Business Law Review 31: 81-96.
Joint consultative committees in Australia: An empirical update
- A Forsyth
- S Korman
- S Marshall
Forsyth, A., S. Korman, and S. Marshall. 2006. Joint consultative committees in Australia: An empirical
update. Paper presented to the 3 rd Australian Labour Law Association National Conference, Brisbane.
Company directors: Principles of law and corporate governance. Sydney, LexisNexis Butterworths. Australian Securities and Investments Commission
- R Austin
- H Ford
- I Ramsay
Austin, R., H. Ford, and I. Ramsay. 2005. Company directors: Principles of law and corporate governance. Sydney, LexisNexis Butterworths. Australian Securities and Investments Commission. 2006. http://www.asic.gov.au/asic/asic_pub.nsf/ byheadline/2006+company+registration+statistics?openDocument (accessed 30 January 2007).
Company law as imperialism
- R Mcqueen
McQueen, R. 1995. Company law as imperialism. Australian Journal of Corporate Law 5: 187-213.
Australian sharemarket ownership
- G Stapledon
Stapledon, G. 1998. Australian sharemarket ownership. In Securities regulation in Australia and New Zealand,
eds G. Walker, B. Fisse, and I. Ramsay, 242-60. 2nd edn. Sydney: LBC Information Services.
The law of the labour market
- S Deakin
- F Wilkinson
Deakin, S., and F. Wilkinson. 2005. The law of the labour market. Oxford: Oxford University Press.
Ownership and control of Australian companies
- E Wheelwright
Wheelwright, E. 1957. Ownership and control of Australian companies. Sydney: Law Book Co.