Suchergebnisse

Rate capping was introduced by the British Conservative Government in 1984 to impose a legally enforceable ceiling on the rating power of local authorities. It is a discriminatory measure. High-spending authorities, as assessed in accordance with current and historic data, are given annual rate limits by central government, with rights of appeal and negotiation. The process has generated great controversy, with some local authorities threatening municipal bankruptcy and all showing great reluctance to operate within the system. But the financial impact has so far been marginal: The government moved gingerly, and creative accounting has helped postpone financial difficulties.

A system of shared corporate governance between shareholders and workers, codetermination has been mostly ignored within the U.S. corporate governance literature. When it has made an appearance, it has largely served as a foil for shareholder primacy and an example of corporate deviance. However, over the last twenty years—and especially in the last five—empirical research on codetermination has shown surprising results as to the system's efficiency, resilience, and benefits to stakeholders. This Article reviews the extant American legal scholarship on codetermination and provides a fresh look at the current state of codetermination theory and practice. Rather than experiencing the failures predicted by our law-and-economics framework of shareholder primacy, codetermination has fared better than alternative systems, particularly with respect to the ravages of the Global Financial Crisis. At a time when corporate leaders, politicians, and academics are rethinking the shareholder primacy model, the Article presents an updated perspective on codetermination and invites U.S. scholars to reexamine their prior assumptions.

The consensus around shareholder primacy is crumbling. Investors, long assumed to be uncomplicated profit-maximizers, are looking for ways to express a wider range of values in allocating their funds. Workers are agitating for greater voice at their workplaces. And prominent legislators have recently proposed corporate law reforms that would put a sizable number of employee representatives on the boards of directors of large public companies. These rumblings of public discontent are echoed in recent corporate law scholarship, which has cataloged the costs of shareholder control, touted the advantages of nonvoting stock, and questioned whether activist holders of various stripes are acting in the company's best interests. Academics who support stronger share-holder rights are accused of pandering to special interest groups or naively seeking a panacea in a plebiscite. As critical theorists have documented over time, the foundations of the shareholder primacy model have always been compromised. In particular, the arguments for a core feature of the modern corporation—the exclusive shareholder franchise—have been revealed as the product of flawed assumptions, misapplied social choice theory, and a failure to hold true to the fundamental precepts of standard economics. It is time to look at such governance features anew, and reorient the literature around the basic purpose of corporations: to provide a legal mechanism for business firms to engage in the process of joint production. In this Article, we present a new shared governance model, one that builds on the longstanding theory of the firm as well as a novel theory of democratic participation. These twin arguments, economic and political, both counsel in favor of extending the corporate franchise to employees as well as shareholders, and, importantly, provide a way to distinguish these two constituencies from other corporate stake-holders when it comes to governance rights. We conclude by assessing the current status of a shared governance system in Germany and advocating for further theoretical and empirical inquiry into shared governance structures that provide for joint shareholder and employee participation.

The consensus around shareholder primacy is crumbling. Investors, long assumed to be uncomplicated profit-maximizers, are looking for ways to express a wider range of values in allocating their funds. Workers are agitating for greater voice at their workplaces. And prominent legislators have recently proposed corporate law reforms that would put a sizable number of employee representatives on the boards of directors of large public companies. These rumblings of public discontent are echoed in recent corporate law scholarship, which has cataloged the costs of shareholder control, touted the advantages of nonvoting stock, and questioned whether activist holders of various stripes are acting in the company's best interests. Academics who support stronger shareholder rights are accused of pandering to special interest groups or naively seeking a panacea in a plebiscite. As critical theorists have documented over time, the foundations of the shareholder primacy model have always been compromised. In particular, the arguments for a core feature of the modern corporation — the exclusive shareholder franchise — have been revealed as the product of flawed assumptions, misapplied social choice theory, and a failure to hold true to the fundamental precepts of standard economics. It is time to look at such governance features anew, and reorient the literature around the basic purpose of corporations: to provide a legal mechanism for business firms to engage in the process of joint production. In this article, we demonstrate how the prerogatives of corporate governance have been improperly limited to shareholders. We then present a new mutual-control model of corporate governance, one that builds on the longstanding theory of the firm as well as a novel theory of democratic participation. These twin arguments, economic and political, both counsel in favor of extending the corporate franchise to employees as well as shareholders, and, importantly, provide a way to distinguish these two constituencies from other corporate stakeholders when it comes to governance rights. We conclude by assessing the current status of a shared governance system in Germany and advocating for further theoretical and empirical inquiry into organizational governance structures that provide for joint shareholder and employee participation.

The consensus around shareholder primacy is crumbling. Investors, long assumed to be uncomplicated profit-maximizers, are looking for ways to express a wider range of values in allocating their funds. Workers are agitating for greater voice at their workplaces. And prominent legislators have recently proposed corporate law reforms that would put a sizable number of employee representatives on the boards of directors of large public companies. These rumblings of public discontent are echoed in recent corporate law scholarship, which has cataloged the costs of shareholder control, touted the advantages of nonvoting stock, and questioned whether activist holders of various stripes are acting in the company's best interests. Academics who support stronger shareholder rights are accused of pandering to special interest groups or naively seeking a panacea in a plebiscite.As critical theorists have documented over time, the foundations of the shareholder primacy model have always been compromised. In particular, the arguments for a core feature of the modern corporation — the exclusive shareholder franchise — have been revealed as the product of flawed assumptions, misapplied social choice theory, and a failure to hold true to the fundamental precepts of standard economics. It is time to look at such governance features anew, and reorient the literature around the basic purpose of corporations: to provide a legal mechanism for business firms to engage in the process of joint production.In this article, we present a new shared governance model, one that builds on the longstanding theory of the firm as well as a novel theory of democratic participation. These twin arguments, economic and political, both counsel in favor of extending the corporate franchise to employees as well as shareholders, and, importantly, provide a way to distinguish these two constituencies from other corporate stakeholders when it comes to governance rights. We conclude by assessing the current status of a shared governance system in Germany and advocating for further theoretical and empirical inquiry into organizational governance structures that provide for joint shareholder and employee participation.

American corporations are structured in such a way that shareholders, and shareholders alone, have the right to vote in all significant corporate decisions. Over the years, this exclusive shareholder franchise has been supported by an ongoing procession of justifications. But as those arguments have fallen by the wayside, shareholder primacists have circled back and latched upon a final argument for the special voting status of shareholders, arguing that this fundamental feature of corporate governance is the product of the set of freely-bargained-for agreements among all corporate constituents. Because this set of agreements reflects the preferences of all parties to the corporate contract, they contend, it should thus be viewed as the best way to structure the corporation. The thesis of this Article is that the "nexus of contracts" theory is both descriptively wrong and normatively hollow, and, in particular, provides a poor foundation for the exclusive shareholder franchise. The corporation is neither a mere contract nor a set of contracts, literally or metaphorically. Indeed, the whole notion of the corporation as a nexus of contracts has been a theatrical production of dodges, feints, and posturing designed to rationalize and justify the existing order of things and create the kind of rhetorical space corporate law scholars need to advance their own particular policy positions. Once freed from the constraints of false theories, it is time to do the hard work of starting over and determining what the ideal structure or structures might be for organizations that bring together capital and labor in a process of joint production.