The Significance of National Cultural Identity
Corporations, Globalisation and the Law series
Chapter 2: The reasons for convergence and divergence
Chapter 2 considers the differences in national and regional corporate governance which stem from the historical, philosophic and economic nature of particular societies. The first section of the chapter grapples with a definition of corporate governance which is by no means settled. The next section considers EU corporate governance and why harmonisation of company law and corporate governance has been extremely difficult and slow, suggesting that there is not an enormous appetite for convergence in corporate governance in the EU. Next, the chapter will focus on the intractable problems of property rights and ownership, showing the divisions which are inherent in these concepts in different jurisdictions. Property rights can be rigid or loose depending on the norms in particular society. The rhetoric used in discussing property rights often ignores aspects of property rights, such as the importance of always keeping in mind the insight that property rights are, in essence, rights against other people. This means that all property rights govern power relations between people. This is crucial for corporate governance because in the neo-liberal ideology, companies are the property of the shareholders: shareholders ‘own’ the company, or in the nexus of contract parlance, shareholders own ‘the capital’. In this section of the chapter, this discourse of ‘ownership’ is rejected, allowing a wider conception of corporate governance. We consider a number of theoretical foundations of corporate governance. Here we are delving deeper into corporate governance theories. Two important theories explain tensions in the paramount contractual model.
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