CONVERGENCE IN SHAREHOLDER LAW
On the one hand, it can be argued that the increasing economic and politi-cal interdependence of countries has led to the convergence of national legalsystems. On the other hand, advocates of the counterhypothesis maintainthat this development is both unrealistic and unnecessary.
Mathias Siems examines the company law of the UK, the USA,Germany, France, Japan and China to see how this issue affects share-holder law. The author subsequently analyses economic and political fac-tors which may or may not lead to convergence, and assesses the extent ofthis development. Thus, Convergence in Shareholder Law not only providesa thorough comparative legal analysis but also shows how company lawinterconnects with political forces and economic development and helpsin evaluating whether harmonisation and shareholder protection shouldbe enhanced.
mathias m. siems is a Reader in Commercial Law at the University ofEdinburgh and a Research Associate at the Centre for Business Research,University of Cambridge.
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international corporate law andfinancial market regulation
Recent years have seen an upsurge of change and reform in corporate law andfinancial market regulation internationally as the corporate and institutionalinvestor sector increasingly turns to the international financial markets. Thisfollows large-scale institutional and regulatory reform after a series ofinternational corporate governance and financial disclosure scandalsexemplified by the collapse of Enron in the US. There is now a great demand foranalysis in this area from the academic, practitioner, regulatory and policysectors.
The International Corporate Law and Financial Market Regulation series willrespond to that demand by creating a critical mass of titles which will addressthe need for information and high quality analysis in this fast developing area.
Series EditorsProfessor Eilis Ferran, University of CambridgeProessor Niamh Moloney, University of NottinghamProfessor Howell Jackson, Harvard Law School
Editorial BoardProfessor Marco Becht, Professor of Finance and Economics at Universite Librede Bruxelles and Executive Director of the European Corporate GovernanceInstitute (ECGI).
Professor Brian Cheffins, S.J. Berwin Professor of Corporate Law at the Facultyof Law, University of Cambridge.
Professor Paul Davies, Cassel Professor of Commercial Law at the LondonSchool of Economics and Political Science.
Professor Luca Enriques, Professor of Business Law in the Faculty of Law at theUniversity of Bologna.
Professor Guido Ferrarini, Professor of Law at the University of Genoa andHonorary Professor, Faculty of Law, University College London.
Professor Jennifer Hill, Professor of Corporate Law at Sydney Law School.
Professor Klaus J. Hopt, Director of the Max Planck Institute of Comparativeand International Private Law, Hamburg, Germany.
Professor Hideki Kanda, Professor of Law at the University of Tokyo.
Professor Colin Mayer, Peter Moores Professor of Management Studies at theSaıd Business School and Director of the Oxford Financial Research Centre.
James Palmer, Partner of Herbert Smith, London.
Professor Michel Tison, Professor at the Financial Law Institute of theUniversity of Ghent.
Andrew Whittaker, General Counsel to the Board at the UK Financial ServicesAuthority.
Professor Eddy Wymeersch, Chairman of the Committee of European SecuritiesRegulators (CESR), Co-Chair of the CESR-European Central Bank WorkingGroup on Clearing and Settlement, and part time Professor of Commercial Law,University of Ghent, Belgium.
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CONVERGENCE IN
SHAREHOLDER LAW
MATHIAS M. SIEMS
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CAMBRIDGE UNIVERSIT Y PRESS
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi, Tokyo, Mexico City
Cambridge University PressThe Edinburgh Building, Cambridge CB2 8RU, UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.orgInformation on this title: www.cambridge.org/9780521187916
© Mathias Siems 2008
This publication is in copyright. Subject to statutory exceptionand to the provisions of relevant collective licensing agreements,no reproduction of any part may take place without the written
permission of Cambridge University Press.
First published 2008
First paperback edition 2011
A catalogue record for this publication is available from the British Library
ISBN 978-0-521-87675-9 HardbackISBN 978-0-521-18791-6 Paperback
Cambridge University Press has no responsibility for the persistence or accuracy ofURLs for external or third-party internet websites referred to in this publication, anddoes not guarantee that any content on such websites is, or will remain, accurate or
appropriate.
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CONTENTS
Preface and acknowledgments page ixList of abbreviations xTable of cases xixTable of legislation xxiii
Introduction 1
part i The object and course of the investigation
1. Dimensions of convergence in shareholder law 7I. The spatial dimension: the legal systems covered 7
II. The objective dimension: the shareholder of a joint stock company 10
III. The temporal dimension 17
IV. The methodological dimension 23
V. Summary 26
part ii The status quo of convergence
2. Legal bases 31I. International and regional law 31
II. Statute law and case law 34
III. Company and securities law 37
IV. Self-regulation and state regulation 45
V. Conclusion 59
3. Bases for a shareholder typology 60I. The shareholder in the theoretical debate 60
II. Real types of shareholder 64
III. Conclusions 66
v
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vi contents
4. The ‘shareholder as such’ 68I. The profit-oriented shareholder 68
II. The active shareholder 87
III. The informed shareholder 120
IV. The anonymous shareholder 136
V. Conclusions to this chapter 147
5. The shareholder in the power structure of the company 149I. The deciding shareholder 150
II. The protected shareholder 174
III. The litigating shareholder 210
IV. Conclusions to this chapter 222
6. Conclusions to Part II 224I. Divergence and convergence 224
II. Globalization and Americanization 226
III. Convergence and artificial convergence 228
part iii Developmental trends and patterns
7. Bases 231I. The dependency of shareholder law 231
II. Regulatory levels of shareholder law 239
III. Regulatory forms at the national level 244
IV. Conclusions to this chapter 248
8. Convergence through congruence 250I. General cultural and economic-policy approximation 250
II. The convergence of legal cultures 255
III. Internationalization of the economy 263
IV. Approximation of shareholder structures 277
V. Legislative responses 290
9. Convergence through pressure 297I. Pressure from company founders 297
II. Pressure from management 307
III. Pressure from shareholders 310
IV. Pressure from other interest groups 314
V. Pressure from international organizations and foreign states 316
VI. Legislative responses 317
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contents vii
10. Future convergences in shareholder law 336I. The ‘shareholder as such’ 336
II. The shareholder in the power structure of the company 353
11. Conclusions to Part III 366I. Re-regulation 366
II. Convergence forces 367
III. Changes in future law 368
part iv Conclusion
12. Convergence as a model for the future 373I. Convergence ‘from above’ 373
II. Convergence ‘from below’ 381
III. The object of convergence in shareholder law 391
IV. Conclusion 395
13. Summary of principal findings 396
References 401Index 451
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PREFACE AND ACKNOWLEDGMENTS
In the last fifteen years, the words ‘globalization’, ‘internationalization’and ‘Europeanization’ have been seen and heard everywhere. The legaldiscussion has been no exception: on the one hand, it has sometimesbeen claimed that national legal systems are increasingly convergent. Onthe other hand, advocates of the counterhypothesis maintain that conver-gence of legal systems is neither realistic nor necessary. This book takes alook at how to approach this issue in relation to shareholder law. Althoughthere are already some publications which deal with company law con-vergence, the reader is often left disappointed. With respect to similaritiesand differences between countries, the previous literature is dominatedby broad statements about different corporate governance systems andanecdotal stories of convergence. A detailed legal analysis is, however,lacking. Similarly, with respect to convergence forces and hurdles, therehas often been only a perfunctory analysis of particular topics, such asregulatory competition or shareholder ownership. But, again, a coherentand comprehensive account is missing. Thus, this book aims at filling thatgap. Its structure is as follows. First, it compares the company laws of theUnited Kingdom, the USA, Germany, France, Japan and China. Secondly,it analyzes economic and political factors, which might (or might not)lead to convergence. Finally, it assesses this development.
I started writing the German version of this monograph in June2001 when I was just finishing my LLM in Edinburgh. Since then Ihave worked and lived in Paris, Berlin, Hamburg, Florence, Cambridge(Massachusetts), Riga, Cambridge (England), and again Edinburgh. Ithank everyone who encouraged my research. Specifically for the Englishedition, I would like to thank Iain Fraser (Florence), Chris Goddard (Riga)and Kim Hughes (Cambridge University Press) for their help and sup-port, as well as Eilıs Ferran, Niamh Moloney and Howell Jackson as theeditors of the series on International Corporate Law and Financial MarketRegulation.
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ABBREVIATIONS
AC UK Law Reports: Appeal CasesAcP Archiv fur die civilistische PraxisAG AktiengesellschaftALI-Principles American Law Institute (ALI), Principles
of Corporate Governance: Analysis andRecommendations, 1994
All ER All England Law ReportsALR Australian Law ReportsAm. J. Comp. L. American Journal of Comparative LawAmer. Econ. Rev. American Economic ReviewAriz. J. Int’l & Comp. L. Arizona Journal of International and
Comparative Law
BB Betriebs-BeraterBCLC Butterworths Company Law CasesBell J. Econ. Bell Journal of Economics and
Management ScienceBerkeley Bus. L.J. Berkeley Business Law JournalBerkeley J. Int’l L. Berkeley Journal of International LawBGBl. German Federal Law Gazette
(Bundesgesetzblatt)BGH German Supreme Court
(Bundesgerichtshof)BGHZ Decisions of the German Supreme Court
(in private law matters)BJIR British Journal of Industrial RelationsBond L. Rev. Bond Law ReviewBrook. J. Int’l L. Brooklyn Journal of International LawBT-Drucks. Printed Matters of the German Bundestag
(Bundestagsdrucksacke)
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list of abbreviations xi
BU Int’l L.J. Boston University International LawJournal
Bus. Hist. Business HistoryBus. Law. Business LawyerBVerfG German Constitutional Court
(Bundesverfassungsgericht)BVerfGE Decisions of the German Constitutional
CourtC. & SLJ Company and Securities Law JournalCal. App. California Appellate ReportsCal. L. Rev. California Law ReviewCal. Rptr. California ReporterCalGCL California General Corporation LawCalPERS California Public Employees’ Retirement
SystemCardozo J. Int’l & Comp. L. Cardozo Journal of International and
Comparative LawCardozo L. Rev. Cardozo Law ReviewCEO Chief Executive OfficerCFO Chief Financial Officerch., chs., Ch., Chs. Chapter, ChaptersCh., ChD UK Law Reports: Chancery DivisionChinArticles Chinese Guide to Articles of Association
of Companies Limited by Shares of6 December 1997
ChinCA Chinese Companies ActChinCG-Code Code of Corporate Governance for Listed
Companies of the China SecuritiesRegulatory Commission (CSRC) (Englishtranslation available atwww.csrc.gov.cn/en/homepage/index en.jsp)
ChinMandProv Chinese Mandatory Provisions in theArticles of Association for CompaniesListed Overseas of 27 August 1994(English translation available at ChinaLaw and Practice, Vol. 9 (1995), No. 4,p. 19)
ChinSA Chinese Securities Act
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xii list of abbreviations
CLJ Cambridge Law JournalColum. Bus. L. Rev. Columbia Business Law ReviewColum. J. Eur. L. Columbia Journal of European LawColum. J. Transnat’l L. Columbia Journal of Transnational LawColum. L. Rev. Columbia Law ReviewComp. Law. Company LawyerComp. L. L. & Pol’y J. Comparative Labor Law and Policy JournalConn. J. Int’l L. Connecticut Journal of International LawCornell Int’l L.J. Cornell International Law JournalCornell L. Rev. Cornell Law ReviewCSRC China Securities Regulatory Commission
DB Der BetriebDC Cir. United States Court of Appeals for the
District of ColumbiaDel. Ch. Delaware Court of ChanceryDel. J. Corp. L. Delaware Journal of Corporate LawDel. Supr. Delaware Supreme CourtDelGCL Delaware General Corporation LawDStR Deutsches SteuerrechtDSW Deutsche Schutzvereinigung fur
Wertpapierbesitz e.V.
EBLR European Business Law ReviewEBOR European Business Organization Law
ReviewEC European Community; Treaty
establishing the European CommunityECFR European Company and Financial Law
ReviewECJ European Court of JusticeECR European Court ReportsEEC European Economic CommunityELJ European Law JournalE.L. Rev. European Law ReviewEU European UnionEurop. Econ. Rev. European Economic ReviewEurop. J. Law & Econ. European Journal of Law and EconomicsEuZW Europaische Zeitschrift fur Wirtschaftsrecht
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EWS Europaisches Wirtschafts- und Steuerrecht
FASB Financial Accounting Standards Board(USA)
Ford. Int. L.J. Fordham International Law JournalFrCCom Code de Commerce (France)FrCG-Principles Principes de gouvernement d’entreprise
resultant de la consolidation des rapportsconjoints de l’AFEP et du MEDEF, 2003
FrCMon Code monetaire et financier (France)FrDecret Decret No. 67-236 sur les societes
commerciales (France)FrRGAMF Reglement general de l’Autorite des
marches financiers (AMF) (France)FSA Financial Services Authority
Ga. L. Rev. Georgia Law ReviewGATS General Agreement on Trade in ServicesGeo. L.J. Georgetown Law JournalGerAktG German Law on Joint-Stock Companies
(Aktiengesetz)GerBGB German Civil Code (Burgerliches
Gesetzbuch)GerBorsG German Stock Exchange Act
(Borsengesetz)GerBorsZulV German Stock Exchange Admission
Regulation(Borsenzulassungsverordnung)
GerCGK German Corporate Governance Code(Deutscher Corporate GovernanceKodex) (English version available atwww.corporate-governance-code.de/index-e.html)
GerFGG German Ex-Parte Jurisdiction Act (Gesetzuber die freiwillige Gerichtsbarkeit)
GerGmbHG German Law on Private LiabilityCompanies (Gesetz betreffend dieGesellschaft mit beschrankter Haftung)
GerHGB German Commercial Code(Handelsgesetzbuch)
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xiv list of abbreviations
GerStGB German Criminal Code(Strafgesetzbuch)
GerUmwG German Transformation Act(Umwandlungsgesetz)
GerWpHG German Securities Trading Act(Wertpapierhandelsgesetz)
GerWpUG German Takeover Act(Wertpapiererwerbs- undUbernahmegesetz)
GerZPO German Code of Civil Procedure(Zivilprozessordnung)
Harv. Bus. Rev. Harvard Business ReviewHarv. Int’l L.J. Harvard International Law JournalHarv. J. on Legis. Harvard Journal on LegislationHarv. L. Rev. Harvard Law Review
IAS International Accounting StandardIASB International Accounting Standards
BoardIBL International Business LawyerICCLJ International and Comparative Corporate
Law JournalICCLR International Company and Commercial
Law ReviewICLQ International and Comparative Law
QuarterlyIFLR International Financial Law ReviewIFRS International Financial Reporting
StandardsInt. L. The International LawyerIMF International Monetary FundInt. J. Bus. International Journal of BusinessInt’l Rev. L. & Econ. International Review of Law and
EconomicsIOSCO International Organization of Securities
Commissions
JapCA Japanese Corporation Act (kaisha ho),Law No. 86/2005
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list of abbreviations xv
JapCC Japanese Commercial Code (Shoho), LawNo. 48/1899
JapCCExcA Japanese law for special exceptions to theCommercial Code concerning audit, etc.of joint stock companies (Kabushikigaisha no kans to ni kansuru shoho notokurei ni kansuru horitsu), Law No.22/1974
JapCG-Principles Tokyo Stock Exchange, Principles ofCorporate Governance for ListedCompanies 2004.
JapSEA Japanese Securities and Exchange Act(Shoken torihikoho), Law No. 25/1948
JBL Journal of Business LawJ. Corp. L. Journal of Corporation LawJCL Journal of Comparative LawJCLS Journal of Corporate Law StudiesJCMS Journal of Common Market StudiesJCP Juris Classeur PeriodiqueJ. Econ. Manage. Strategy Journal of Economics and Management
StrategyJ. Empirical Legal Stud. Journal of Empirical Legal StudiesJ. Finance Journal of FinanceJ. Finan. Econ. Journal of Financial EconomicsJJS Journal of Japanese StudiesJ. L. & Econ. Journal of Law and EconomicsJ. L. Econ. & Org. Journal of Law, Economics and
OrganizationJ. Legal Stud. Journal of Legal StudiesJ. Polit. Economy Journal of Political EconomyJZ Juristenzeitung
Law & Pol’y Int’l Bus. Law and Policy in International BusinessLaw & Soc. Inquiry Law and Social InquiryLoy. LA Int’l & Comp. L.J. Loyola of Los Angeles International and
Comparative Law JournalLQR Law Quarterly ReviewLSE London Stock ExchangeMBCA Model Business Corporation Act (USA)Melbourne U. L. Rev. Melbourne University Law Review
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xvi list of abbreviations
Mich. L. Rev. Michigan Law ReviewMinn. J. Global Trade Minnesota Journal of Global TradeMJ Maastricht Journal of European and
Comparative LawMLR Modern Law Review
NAFTA North American Free Trade AgreementNC J. Int’l & Com. Reg. North Carolina Journal of International
Law and Commercial RegulationNJW Neue Juristische WochenschriftNo(s). Number(s)Nw. J. Int’l L. & Bus. Northwestern Journal of International Law
and BusinessNw. U. L. Rev. Northwestern University Law ReviewNYBCL New York Business Corporation LawNY Int’l L. Rev. New York International Law ReviewNYL Sch. J. Int’l & New York Law School Journal ofComp. L. International and Comparative LawNYSE New York Stock ExchangeNYSE Manual Listed Company Manual of the New York
Stock ExchangeNYU L. Rev. New York University Law ReviewNZG Neue Zeitschrift fur Gesellschaftsrecht
OECD Organization for Economic Co-operationand Development
OECD-Principles OECD Principles of CorporateGovernance (available atwww.oecd.org/dataoecd/32/18/31557724.pdf)
OJLS Oxford Journal of Legal StudiesPenn St Int’l L. Rev. Penn State International Law ReviewQJ Econ. Quarterly Journal of EconomicsRabelsZ Rabels Zeitschrift fur auslandisches und
internationales PrivatrechtRev.int.dr.comp. Revue internationale du droit compareRev. Int. Polit. Economy Review of International Political EconomyRev.soc. Revue des societesRG Supreme Court of the German Reich
(Reichsgericht)
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list of abbreviations xvii
RGZ Decisions of the Supreme Court of theGerman Reich
RIW Recht der internationalen Wirtschaft
s. (ss.) section(s), sentence(s)S. Cal. L. Rev. Southern California Law ReviewSarbanes–Oxley Act 2002 Sarbanes–Oxley Act (Public Company
Accounting Reform and InvestorProtection Act) (USA) of 30 July 2002
SE Societas Europaea (European Company)SE-Reg Council Regulation (EC) No. 2157/2001
of 8 October 2001 on the Statute for aEuropean Company (SE)
SEC Securities Exchange Commission (USA);Regulations and Rules of the SEC basedon Securities Exchange Act of 1934; 17CFR Parts 200–301
SI Statutory InstrumentSt John’s J. Legal Comment. Saint John’s Journal of Legal CommentarySt Louis U. L.J. Saint Louis University Law JournalStan. L. Rev. Stanford Law ReviewTransnat’l L. & Contemp. Transnational Law and Contemporary
Probs. ProblemsTransnat’l Law. Transnational LawyerTul. L. Rev. Tulane Law Review
U. Chi. L. Rev. University of Chicago Law ReviewU. Cin. L. Rev. University of Cincinnati Law ReviewUC Davis L. Rev. UC Davis Law ReviewUCLA Pac. Basin L.J. UCLA Pacific Basin Law JournalU. Pa. J. Int’l Econ. L. University of Pennsylvania Journal of
International Economic LawU. Pa. L. Rev. University of Pennsylvania Law ReviewU. Pitt. L. Rev. University of Pittsburgh Law ReviewUK-CA Companies Act 2006 (United Kingdom)UK-City Code City Code on Takeovers and Mergers of
the Panel on Takeovers and Mergers(United Kingdom)
UK-Combined Code Combined Code on CorporateGovernance (United Kingdom)
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xviii list of abbreviations
UK-FSMA Financial Services and Markets Act 2000(United Kingdom)
UK-Listing Rules UK Listing RulesUK-Table A Table A of the Companies (Table A to F)
Regulations 1985 (United Kingdom)US-GAAP Generally Accepted Accounting Principles
(USA)US-SA Securities Act of 1933 (USA), ch. 38, 48
Stat. 7, codified at 15 USC secs. 77a–77mUS-SEA Securities Exchange Act of 1934 (USA),
ch. 404, 48 Stat. 881, codified at 15 USCsecs. 78a–78kk
US-UCC Uniform Commercial Code (USA)
Va. J. Int’l L. Virginia Journal of International LawVa. L. Rev. Virginia Law ReviewVill. L. Rev. Villanova Law Review
Wash. ULQ Washington University Law QuarterlyWLR Weekly Law ReportsWM Wertpapier-MitteilungenWTO World Trade Organization
Yale J. Int’l L. Yale Journal of International LawYale J. on Reg. Yale Journal on RegulationYale L.J. Yale Law Journal
ZEuP Zeitschrift fur Europaisches PrivatrechtZfRV Zeitschrift fur RechtsvergleichungZGR Zeitschrift fur Unternehmens- und
GesellschaftsrechtZHR Zeitschrift fur das gesamte Handels- und
WirtschaftsrechtZJapanR Zeitschrift fur Japanisches RechtZRP Zeitschrift fur RechtspolitikZVglRWiss Zeitschrift fur vergleichende
Rechtswissenschaft
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TABLE OF CASES
European Union
Centros Ltd v. Erhervsog Selskabsstyrelsen, C-212/97 [1999] ECR I-1459 298, 300,
302
Commission v. Belgium, C-503/99 [2002] ECR I-4809 185
Commission v. French Republic, C-483/99 [2002] ECR I-4781 185
Commission v. Portugal, C-367/98 [2002] ECR I-4731 185
Hughes de Lasteyrie du Saillant v. Ministere de l’Economie, des Finances et de
l’Industrie, C-9/02 [2004] ECR I-2409 301
Kamer van Koophandel en Fabrieken voor Amsterdam v. Inspire Art Ltd, C-167/01
[2003] ECR I-10155 302, 303, 384
SEVIC Systems AG, C-411/03 [2005] ECR I-10805 269, 301
The Queen v. Daily Mail and General Trust plc, C-81/87 [1988] ECR I-5483 302
Uberseering BV v. Nordic Construction Company Baumanagement GmbH (NCC),
C-275/17 [2002] ECR I-9919 301, 302
Waltraud Tomberger v. Gebruder von der Wettern GmbH, C-234/94 [1996] ECR
I-3133 132
United Kingdom
Adams v. Cape Industries plc [1990] Ch 433 (Court of Appeal) 70
Alexander v. Automatic Telephone Co. [1990] 2 Ch 56 (Court of Appeal) 176
Brady v. Brady [1988] BCLC 20 (Court of Appeal) 178, 179
Bushell v. Faith [1970] AC 1099 (House of Lords) 114
Carruth v. Imperial Chemical Industries Ltd [1937] AC 707 (House of Lords) 199
City Equitable Fire Insurance Co., Re [1925] 1 Ch 407 (Court of Appeal) 192
Creasey v. Breachwood Motors Ltd [1993] BCLC 480 (Queen’s Bench) 70
DHN Food Distributors Ltd v. Tower Hamlets LBC [1976] 1 WLR 852 (Court of
Appeal) 70
Ebrahimi v. Westbourne Galleries Ltd [1972] 2 All ER 492 (Chancery Division) 202
Edwards v. Halliwell [1950] 2 All ER 1064 (Court of Appeal) 220
Foss v. Harbottle (1843) 2 Hare 461 (House of Lords) 213
Isle of Wight Ry v. Tahourdin (1883) 25 ChD 320 (Court of Appeal) 152
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xx table of cases
Normandy v. Ind, Coope & Co. [1908] 1 Ch 84 (Chancery Division) 99
Re a Company (No. 00709 of 1992) [1999] 1 WLR 1092 (O’Neill v. Phillips) (House of
Lords) 35, 207
Salomon v. Salomon & Co. [1897] AC 22 (House of Lords) 70
Smith & Fawcett Ltd, Re [1942] Ch 304 (Court of Appeal) 72, 192
Wall v. London & Northern Assets Corporation Ltd [1898] 2 Ch 469 (Court of Appeal)
110
Wallersteiner v. Moir (No. 2) [1975] 1 All ER 849 (Court of Appeal) 214
Weller (Sam) & Sons Ltd, Re [1990] BCLC 80 (Chancery Division) 74
West Mercia Safetywear Ltd v. Dodd [1988] BCLC 250 (Court of Appeal) 179
Yukong Line Ltd v. Rendsburg Investment Corporation [1998] 1 WLR 294 (Queen’s
Bench) 70
United States
A. P. Smith Mfg Co. v. Barlow, 98 A 2d 581 (New Jersey 1953) 179
Allied Chemical & Dye Corp. v. Steel & Tube Co. of America, 14 Del. Ch. 1, 120 A 486
(1923) 202
Aronson v. Lewis, 473 A 2d 805 (Del. 1984) 213
Auerbach v. Bennett, 47 NY 2d 619; 393 NW 2d 994; 419 NYS 2d 920 (1979) (NY
Court of Appeals) 213
Baatz v. Arrow Bar, 426 NW 2d 298 (South Dakota 1990) 70
Business Roundtable v. SEC, 905 F 2d 406 (DC Cir. 1990) 114
Dodge v. Ford Motor Co., 170 NW 668 (Michigan 1919) 179
Edgar v. MITE, 487 US 624 (1982) (US Supreme Court) 184
Eshleman v. Keenan, 22 Del. Ch. 82; 194 A 40 (1937); aff’d 23 Del. Ch. 234; 2 A 2d 904
(1938) 72
Fleigler v. Lawrence, 361 A 2d 218 (Del. 1976) 200
Foster v. Florida, 537 US 990 (US Supreme Court 2002) 386
Gimbal v. Signal Companies, 316 A 2d 599 (Del. Ch.); aff’d in part 316 A 2d 619 (Del.
1974) 166
Harris v. Carter, 582 A 2d 222 (Del. Ch. 1990) 206
Hartford Accident & Indemnity Co. v. W. S. Dickey Clay Mfg Co., 26 Del. Ch. 16; 21 A
2d 178 (1941), aff’d 26 Del. Ch. 411; 24 A 2d 315 (1942) 202
Havlicek v. Coast-to-Coast Analytical Services Inc., 46 Cal. Rptr 2d 696; 39 Cal. App.
4th 1844 (1995) 320
Hoschett v. TSI International Software Ltd, 683 A 2d 43 (Del. Ch. 1996) 62
Inhabitants of Waldoborough v. Knox and Lincoln R. R., 24 A 942 (Maine 1892) 169
Kahn v. Lynch Communication Systems Inc., 638 A 2d 1110 (Del. 1994); 669 A 2d 79
(Del. 1995) 170
Kinney Shoe Corp. v. Polan, 939 F 2d 209 (4th Cir. 1991) 70
Lawrence v. Texas, 123 S Ct 2472 (US Supreme Court 2003) 386
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Laya v. Erin Homes Inc., 352 SE 2d 93 (West Virginia 1986) 70
Liggett v. Lee, 288 US 517 (US Supreme Court 1933) 298
North American Asbestos Corp. v. Superior Court, 225 Cal. Rptr 877; 180 Cal. App. 3d
902 (1986) 320
Paramount Communications Inc. v. QVC Network Inc., 637 A 2d 34 (Del. Ch. 1994)
184
Paul v. Virginia, 75 US 168 (US Supreme Court 1868) 299
Providence & Worcester Co. v. Baker, 378 A 2d 121 (Del. 1977) 114
Revlon Inc. v. MacAndrews & Forbes Holdings Inc., 506 A 2d 173 (Del. Supr 1986)
184
Sea-Land Corp. Shareholders Litigation, Re, No. 8453, 1987 WL 11283 (Del. Ch. 1987)
206
Sea-Land Services v. Pepper Source, 941 F 2d 519 (7th Cir. 1991) 70
Shamrock Assocs. v. Texas Am. Energy Corp., 517 A 2d 658 (Del. Ch. 1986) 143
Sinclair Oil Corp. v. Levien, 280 A 2d 717 (Del. 1971) 72, 192
Smith v. Van Gorkum, 488 A 2d 858 (Del. Supr, 1985) 191
State ex rel. Cochran v. Penn-Beaver Oil Co., 34 Del. 81, 143 A. 257 (1926) 124
State ex rel. Healy v. Superior Oil Corp., 40 Del. 460; 13 A 2d 453 (1940) 124
Stoud v. Grace, 606 A 2d 75 (Del. Supr 1992) 103
Thorpe v. CERBCO Inc., 676 A 2d 436 (Del. 1996) 206
Treves v. Menzies, 37 Del. Ch. 330; 142 A 2d 520 (1958) 72
Unocal Corp. v. Mesa Petroleum Co., 493 A 2d 946 (Del. Supr 1985) 184
Valtz v. Penta Invest. Corp., 188 Cal. Rptr 922l 139 Cal. App. 3d 803 (1983) 320
Walkovszky v. Carlton, 276 NYS 2d 585 (2nd Cir. 1966) 70
Weinberger v. UOP Inc., 457 A 2d 701 (Del. 1983) 202
Wilson v. Louisiana-Pacific Resources Inc., 187 Cal. Rptr 852; 138 Cal. App. 3d 216
(1983) 320
Zapata Corp. v. Maldonado, 430 A 2d 779 (Del. 1981) 213
Germany
BGH, BGHZ 3, 90 158
BGH, BGHZ 8, 348 158
BGH, BGHZ 10, 187 158
BGH, BGHZ 20, 4 70
BGH, BGHZ 48, 163 55
BGH, BGHZ 54, 222 70
BGH, BGHZ 68, 312 70
BGH, BGHZ 70, 122 87
BGH, BGHZ 71, 40 204
BGH, BGHZ 76, 352 204
BGH, BGHZ 83, 122 (Holzmuller) 35, 166
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xxii table of cases
BGH, BGHZ 83, 319 204
BGH, BGHZ 99, 211 172
BGH, BGHZ 103, 184 (Linotype) 204
BGH, BGHZ 107, 296 219
BGH, BGHZ 114, 127 158
BGH, BGHZ 122, 123 70
BGH, BGHZ 125, 239 (Deutsche Bank) 204
BGH, BGHZ 129, 136 (Girmes) 204
BGH, BGHZ 132, 278 363
BGH, BGHZ 135, 244 (ARAG/Garmenbeck) 193, 215
BGH, BGHZ 136, 133 (Siemens/Nold) 49, 204
BGH, BGHZ 146, 179 (MEZ) 122, 219
BGH, BGHZ 153, 57 (Macrotron) 164, 204, 205, 207, 219
BGH, BGHZ 159, 30 (Gelatine) 35, 167
BGH, BGHZ 160, 149 (Infomatec) 197
BGH, NJW 1983, 1910 55
BGH, NJW 1992, 569 219
BGH, NJW 1999, 3197 204
BGH, NJW 2001, 1428 (Aqua-Butzke) 122, 219
BGH, WM 1987, 174 80
BGH, ZIP 1994, 867 70
BGH, ZIP 2005, 2207 (Mangusta/Commerzbank II) 204
BVerfG, BVerfGE 13, 331 70
BVerfG, BVerfGE 100, 289 209
BVerfG, NJW 2001, 279 (Moto Meter) 209, 219
RG, RGZ 68, 235 (Hibernia) 201
RG, RGZ 133, 90 55
ROHG, ROHG XI, 118 192
Other countries
Cour de Cassation, Chambre commerciale et financiere, JCP 1961 II, 69087 (Piquard)
(France) 203
Cour de Cassation, Rev.soc. 1998, 337 (France) 209
Gambotto v. WCP Ltd (1995) 127 ALR 417 (High Court of Australia) 61, 209
Howard Smith Ltd v. Ampol Petroleum Ltd [1974] AC 821 (Privy Council) 152, 192
Lee v. Lee’s Air Farming Ltd [1961] AC 12 (Privy Council) 70
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TABLE OF LEGISLATION
OECD
OECD Principles of Corporate Governance 2004 32
Foreword 241
Preamble 38
No. II. A.3 135
No. II.B.1 162
No. II.B.2 163
No. II.B.3 165
No. II. C.no.2 135
No. II. C.3 160
No. II.E.2 182
No. II. F 119
No. II.G 139
No. III. pr. 211
No. III. A 203
No. III. A.1 66
No. IV. A 180, 227
European Union
Commission Recommendation of 12 December 2004 fostering an appropriate regime
for the remuneration of directors of listed companies, 2004/913/EC 33, 160, 189
Commission Recommendation of 15 February 2005 on the role of non-executive or
supervisory directors of listed companies and on the committees of the (supervisory)
board, 2005/162/EC 33, 195
Directive 68/151/EEC of 9 March 1968 on co-ordination of safeguards which, for the
protection of the interests of members and others, are required by Member States of
companies within the meaning of the second paragraph of Article 58 of the Treaty,
with a view to making such safeguards equivalent throughout the Community (First
Directive) 33, 125
xxiii
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xxiv table of legislation
Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of
capital 321
Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for
the protection of the interests of members and others, are required by Member States
of companies within the meaning of the second paragraph of Article 58 of the Treaty,
in respect of the formation of public limited liability companies and the maintenance
and alteration of their capital, with a view to making such safeguards equivalent
(Second Directive) 33
Art. 1(1) 10
Art. 2 70, 77
Art. 6(1) 315
Art. 19 85, 163
Art. 22(1) 200
Art. 24a 200
Arts. 25 et seq. 163
Art. 25(2) 163
Art. 25(3) 66
Art. 29 202
Art. 29(4)(s.3) 99
Arts. 30 et seq. 163
Art. 39 86
Art. 42 203
Directive 78/855/EEC of 9 October 1978 based on Article 54(3)(g) of the Treaty
concerning mergers of public limited liability companies (Third Directive)
Art. 7 164, 170
Art. 8 165
Arts. 24 et seq. 165
Art. 28 207
Directive 78/660/EEC of 25 July 1978 based on Article 54(3)(g) of the Treaty on the
annual accounts of certain types of companies (Fourth Directive) (as amended) 33,
130
Art. 2(3) 131
Art. 43(7b) 200
Art. 46(1) 177
Art. 46a 127
Directive 82/891/EEC of 17 December 1982 based on Article 54(3)(g) of the Treaty,
concerning the division of public limited liability companies (Sixth Directive)
Art. 5 164
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table of legislation xxv
Directive 89/667/EEC of 21 December 1989 on single-member private limited-liability
companies (Twelfth Directive) 70
Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to
mergers, divisions, transfers of assets and exchanges of shares concerning companies
of different Member States 301
Directive 2001/34/EC of 28 May 2001 on the admission of securities to official stock
exchange listing and on information to be published on those securities
Art. 46 81
Directive 2001/65/EC of 27 September 2001 amending Directives 78/660/EEC,
83/349/EEC and 86/635/EEC as regards the valuation rules for the annual and
consolidated accounts of certain types of companies as well as of banks and other
financial institutions 132
Directive 2003/6/EC of 28 January 2003 on insider dealing and market manipulation
(Market Abuse Directive)
Arts. 2–4 196
Art. 5 129
Art. 6 127
Art. 9 85
Directive 2003/41/EC of 3 June 2003 on the activities and supervision of institutions
for occupational retirement provision 290
Directive 2003/51/EC of the 18 June 2003 amending Directives 78/660/EEC,
83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of
certain types of companies, banks and other financial institutions and insurance
undertakings 132, 177
Directive 2003/58/EC of 15 July 2003 amending Council Directive 68/151/EEC, as
regards disclosure requirements in respect of certain types of companies 33
Directive 2003/71/EC of 4 November 2003 on the prospectus to be published when
securities are offered to the public or admitted to trading and amending Directive
2001/34/EC (Prospectus Directive) 275
Directive 2003/124/EC of 22 December 2003 implementing Directive 2003/6/EC of the
European Parliament and of the Council as regards the definition and public
disclosure of inside information and the definition of market manipulation
Art. 2(1)(s.3) 128
Directive 2004/25/EC of 21 April 2004 on takeover bids (Takeover Directive)
Art. 5 205
Art. 6 127, 187
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xxvi table of legislation
Art. 9 184
Art. 10 127, 187
Art. 11 184
Art. 12 184
Art. 15 209
Art. 16 205
Directive 2004/39/EC of 21 April 2004 on markets in financial instruments amending
Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the
European Parliament and of the Council and repealing Council Directive 93/22/EEC
Arts. 27–28 82
Directive 2004/109/EC of 15 December 2004 on the harmonisation of transparency
requirements in relation to information about issuers whose securities are admitted to
trading on a regulated market and amending Directive 2001/34/EC (Transparency
Directive)
Art. 4 127
Art. 5 127
Art. 6 127
Art. 9 145, 146
Art. 10 54, 146
Art. 12(1) 146
Art. 12(6) 146
Art. 17 33, 203, 243
Arts. 21–22 146
Directive 2005/19/EC of 17 February 2005 amending Directive 90/434/EEC 1990 on
the common system of taxation applicable to mergers, divisions, transfers of assets and
exchanges of shares concerning companies of different Member States 301
Directive 2005/56/EC of 26 October 2005 on cross-border mergers of limited liability
companies 269, 301
Directive 2006/43/EC of 17 May 2006 on statutory audits of annual accounts and
consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and
repealing Council Directive 84/253/EEC
Arts. 22–24 134
Art. 37 156
Arts. 44 et seq. 135
Directive 2006/46/EC of 14 June 2006 amending Council Directives 78/660/EEC on
the annual accounts of certain types of companies, 83/349/EEC on consolidated
accounts, 86/635/EEC on the annual accounts and consolidated accounts of banks and
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table of legislation xxvii
other financial institutions and 91/674/EEC on the annual accounts and consolidated
accounts of insurance undertakings 127, 200
Directive 2006/68/EC of 6 September 2006 amending Council Directive 77/91/EEC as
regards the formation of public limited liability companies and the maintenance and
alteration of their capital 33, 85
Directive 2007/36/EC of 11 July 2007 on the exercise of certain rights of shareholders
in listed companies 33, 243, 338
Art. 4 203
Art. 5 97
Art. 6 94
Art. 7 341
Art. 9 123
Art. 12 106
Regulation (EC) No 1606/2002 of 19 July 2002 on the application of international
accounting standards
Art. 4 132
Art. 5 132
Regulation (EC) 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the
European Parliament and of the Council as regards information contained in
prospectuses as well as the format, incorporation by reference and publication of such
prospectuses and dissemination of advertisements (Prospectus Regulation) 275
Annex III 7.3 and V 27.14 80
Regulation (EC) No. 2157/2001 of 8. October 2001 on the Statute for a European
Company (SE) (SE-Reg) 269
Art. 2 302
Art. 7 302
Art. 8 302
Art. 9(1) 49
Art. 38 49
Art. 39(1)(s.1) 153
Art. 39(2) 156
Art. 43(1) 153
Art. 53 49
Art. 54 91
Art. 55 93
Art. 60(1) 66
Annex I a 10
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xxviii table of legislation
Regulation (EC) No. 2273/2003 of 22 December 2003 implementing Directive
2003/6/EC of the European Parliament and of the Council as regards exemptions for
buy-back programmes and stabilisation of financial instruments 85
Treaty establishing the European Community (EC)
Art. 5 33
United Kingdom
Civil Procedure Rules
r. 19.9(7) 214
UK-CA = Companies Act 2006
s. 4(2) 11
s. 7 70
s. 8 162
s. 18 162
s. 21 162
s. 29 55
s. 30 55
s. 112 15
s. 113 139
s. 116 139
s. 126 15
s. 136 200
s. 146 15, 143
s. 153 15, 143
s. 162(3) 124
s. 168 158
s. 168(5) 158
ss. 170 et seq. 170, 192
s. 172(1) 178
s. 177 191
s. 182 191
s. 188 158
s. 190 167, 191
s. 229 124
s. 232 191
ss. 234 et seq. 191
s. 238 124
s. 239 170
ss. 260 et seq. 213
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table of legislation xxix
s. 263 213
s. 283 170
ss. 288 et seq. 91
s. 302 92
s. 303(3) 93
s. 305 93
s. 306 93
s. 307 98
s. 307(2) 97
s. 310 96
s. 314(2) 94
s. 316 95
s. 317 95
s. 318 170
s. 321 113
ss. 324 et seq. 104
s. 324 104, 110
s. 326 104
s. 328 104
s. 329 104
s. 333 344
s. 336 91
ss. 336 et seq. 12
s. 338(3) 94
s. 340 95
ss. 341 et seq. 12
s. 358 124
ss. 380 et seq. 130
s. 417(5) 179
ss. 423 et seq. 100, 127
s. 439 160
s. 489(3) 156
s. 527 123
s. 544 80
s. 551 163
s. 561 202
s. 617(2) 163
s. 630 66
ss. 658 et seq. 85
s. 684 86
s. 755 12
s. 768 137
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xxx table of legislation
s. 793 143
s. 795 143
s. 797 143
s. 830 74
s. 916 165
s. 943 183
s. 968 183
s. 979 209
s. 983 205
s. 994 35, 74, 192, 202, 213
s. 996(2) 207, 213
s. 1157 192
UK-CA 1985 = Companies Act 1985
s. 9 162
s. 17 162
s. 367 92
s. 372 104
s. 376 95
s. 377 95
s. 381A 91
UK-City Code = City Code on Takeovers and Mergers of the Panel on Takeovers and
Mergers
Principles 2–5 187
Principle 2 127
Principle 3 183
Rule 2.5 127, 187
Rule 9.1 205
Rule 21 183
Rules 24.1 et seq. 127
UK-Combined Code = Combined Code on Corporate Governance
Preamble 57
s. A.7.1 157
s. B.1 188
s. B.2.4 160
s. D.2 110
s. E.3 117
UK-FSMA = Financial Services and Markets Act
s. 2 40
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table of legislation xxxi
s. 40 40
s. 109 196
UK-Listing Rules
§ 9.26 104
§ 9.3.6 104
§ 9.4.1 160
§ 9.9 127
Ch. 10 151, 165
Ch. 11 151
§ 11.1.7 167, 199
Ch. 13 100
§§ 13.28, 13.29 104
UK-Table A = Companies Table A Regulation 1985
Art. 2 66
Art. 3 66
Art. 42 112
Arts. 46 et seq. 113
Art. 60 104
Art. 70 152
Art. 73 157
Art. 77 100
Art. 78 156
Art. 102 72
United States
CalGCL = California General Corporation Law
§ 301.5 172
§ 708 172
§ 2115 299, 320
DelGCL = Delaware General Corporation Law
§ 102(b) 171, 191, 202
§ 109(a) 162
§ 141(a) 153
§ 141(d) 157
§ 141(h) 159
§ 141(k) 158, 172
§ 144 191
§ 151(a) 114
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