Cover

Title

Copyright

Contents

List of figures

List of tables

List of contributors

Acknowledgments

Introduction

PART I Systemic issues

1 The end of history for corporate law

I. Introduction

II. Convergence past: the rise of the corporate form

III. The failure of alternative models

A. The manager-oriented model

B. The labor-oriented model

C. The state-oriented model

D. Stakeholder models

IV. The shareholder-oriented (or “standard”) model

A. In whose interest?

B. Which shareholders?

C. The import of ownership structure

V. Competitive pressures toward convergence

A. The force of logic

B. The force of example

C. The force of competition

VI. The rise of the shareholder class

A. The diffusion of equity ownership

B. The shift in balance toward public shareholders

VII. Convergence of governance practices

VIII. Legal convergence

A. Board structure

B. Disclosure and capital market regulation

C. Shareholder suits

D. Takeovers

E. Judicial discretion

IX. Potential obstacles to convergence

A. Transactions to capture surplus

B. Controllers who wish to build empires

C. The insiders’ political clout will be insufficient to protect them

D. The insiders who preserve their firms and legal protections will become increasingly irrelevant

X. Weak forces for convergence

A. Harmonization

B. Competition for charters

XI. Limits on convergence

A. Differences in institutional context

B. Harmless mutations

XII. Limits on the efficiency of convergence

A. Third-party costs: corporate torts

B. Managerialism

C. How big a problem?

XIII. Conclusion

2 A theory of path dependence in corporate ownership and governance

Introduction

I. Explaining persistent differences

A. The focus of our inquiry

B. The persistence of corporate differences

C. Sources of path dependence

II. Structure-driven path dependence

A. Path dependence of the efficient structure

B. Persistence of existing structures due to rent-seeking

C. Conclusion on structure-driven path dependence

III. Rule-driven path dependence

A. Systems of corporate rules

B. Path dependence of the efficient rules

C. Path dependence of the rules that are actually chosen

D. Elimination of differences in rules by political fiat

E. Conclusion on rule-driven path dependence

IV. Other bases for persistent divergence

A. Differences of opinion

B. Differences in firms and markets

C. Differences in culture, ideology, and politics

V. Conclusion

3 Path dependence and complementarity in corporate governance

Introduction

I. Explanations for path dependence

II. Consistent corporate governance systems

References

4 Globalizing corporate governance: convergence of form or function

I. The interaction of adaptivity and path dependency

II. Functional but not formal convergence: replacing senior management

III. The interaction of formal and functional convergence

IV. The failure of functional convergence: venture capital and the structure of capital markets51

V. Convergence by contract

A. Convergence through security design

B. Convergence through stock exchange listing

VI. Hybrid convergence through regulatory competition

VII. Conclusion

PART II Government players

5 The international relations wedge in the corporate convergence debate

Introduction

I. The privatization of Deutsche Telekom and the fostering of shareholder capitalism

II. The collapse of the 13th Directive and Germany’s new stance on target defenses

A. The origins of the 13th Directive

B. Germany’s new vulnerability

C. The final act in the the European Parliament

D. Germany’s new takeover law

III. The effort to revive the 13th Directive within a framework of mutual takeover vulnerability

Conclusion

6 Property rights in firms

Introduction

I. Diversity

II. (Non)Convergence in three countries

III. A property rights spectrum

IV. A corporate governance spectrum from property rights

V. Convergence?

Conclusion

7 Modern politics and ownership separation

Introduction: why do only some nations have public firms?

I. Social democracies’ pressures on the public firm

II. The data

III. Alternative formulations of the thesis

IV. Reservations and refinements

V. Political preconditions in the United States

Conclusion on political preconditions to separating ownership from control

PART III Specific institutions

8 The politics of corporate convergence

I. Background and motivation: types of convergence theory

II. Interest groups and corporate lawmaking

III. Social norms: “embeddedness” of institutions

IV. Permanent disequilibrium?

9 Ungoverned production

I

II

III

IV

V

10 Convergence of substantive law and convergence of enforcement: a comparison

I. Simplifying the approach

II. Transparency

III. Shareholders’ voting rights

IV. Fiduciary duties

V. Insider trading

VI. Takeover defenses

VII. Reorganization and bankruptcy

VIII. The nature and “volatility” of the correlation

11 Cross-shareholding in the Japanese keiretsu

I. Introduction2

II. The financial firms

III. The Zaibatsu9

IV. Conclusions

References

Index