Hans-Ueli Vogt, Die Konvergenzen von Gesellschaftsrechten im Lichte der Globa-lisierung, in: Hans-Ueli Vogt (Hrsg.), Konvergenzen von Gesellschaftsrechten, Zürich/St. Gallen 2012, S. 392 ff.
Vogt Hans-Ueli – Die Konvergenzen von Gesellschaftsrechten im Lichte der Globalisierung
Summary
In his habilitation thesis, Prof. Dr. Hans-Ueli Vogt offers a theoretical foundation for convergence in corporate law. He approaches this thesis via an initial analysis of how corporate law systems in different jurisdictions are in a process of convergence. The within summary focusses on chapter 10 of Prof. Vogts’ paper, wherein he addresses the subject of globalization as an important factor for the process of convergence.
Corporate law shows all the features that are characteristic for globalized law: a production of legal structures remote from politics and therefore a proximity of the law to global systems and networks, a pluralistic production of law and also pluralistic law regimes. This observation is not contrary to the fact that corporate law is still predominantly national law. It is exactly the national anchoring of corporate law in the context of a globalized economy that demonstrates what globalization of the law means.
The author then explains the specific reasons for the convergence of corporate law in the light of globalization.
First, globalization fosters an imitation of legal structures. The legal comparison of corporate laws has promoted imitations of corporate law structures. It is namely the establishment of the “Law and Economics” approach that enabled authors to describe the global anatomy of corporate law and therefore heightened comparative law activity in the field of corporate law. Imitations of corporate law structures can mainly be seen in the fields of shareholders’ participation rights, responsibility of companies and disclosure of company information.
The pluralistic coexistence of different territorial and functional regulators in corporate law sometimes leads to collisions. Globalization accumulates such collisions, which can result from the extraterritorial application of laws or regulations. A good example of this is seen in the field of disclosure of company information. A prominent example of an imitation engendered through a collision is the Sarbanes-Oxley Act and its extraterritorial effects on the EU. To solve this problem, the EU adopted regulation similar to the US.
Another factor that fosters convergence of corporate law is the global nature of many shocks and crises. The corporate scandals regarding “Parmalat” and “Enron” were the motivating factors for imitating US legal structures in the field of responsibility of corporate management with regard to the responsibility of the management for the disclosure of company information. Imitations are also apparent in the practice of holding managers personally responsible for business decisions; the American concept of the “business judgement rule” has been adopted in Europe.
A second reason is found in parallel innovations, which are in fact a crucial factor for the convergence of corporate laws. Although the biggest part of corporate law is still created by national politics, the main causes for new innovations derive directly from the economy and are therefore quite similar in various jurisdictions. Competition is a stimulating factor for parallel innovation and imitation in the production of corporate law. Significantly, the internationalization of capital markets has also lead to a certain amount of competition between different systems of corporate governance.
A third and final ground is found in the production of corporate law by way of coordination; this is a process that leads to convergence. It particularly holds true in the area of accounting. Both American and European accounting systems rely heavily on certain similar principles, such as “fair presentation” and “true and fair view”; and, both systems have delegated the concretization to private regulators (“IASB” and “FASB”), which coordinate the rule setting activities.
Despite the various reasons that lead to a tendency of convergence, there are also significant differences remaining. Regarding the different levels of shareholder’s participation rights, the main reasons are found in the weaker influence of institutional shareholders in Europe compared to the US as well as the different ownership structures (usually, there is only one influential shareholder in Europe).
Further significant structural convergence between the US and European law is found in the area of management responsibility. While US law permits every shareholder to file a shareholder derivative suit, Germany only allows such a suit when the shareholder owns at least one percent of the capital or shares with a value of 100’000 Euros. In the US, if a shareholder derivative suit is successful and results in an increase of the corporation’s assets, the lawyers of the claimant would be entitled to compensation (“attorneys’ fees”); such fees (and thus an important incentive) do not exist in Europe.