Chapter 4: The integration of codes into national legal systems
While they have become a widely used regulatory tool worldwide, corporate governance codes were not deemed promising in every legal context. This was especially true in civil law systems where codes were received with great reservation and reluctance to consider soft regulation as regulation at all. Conversely codes are expected to play a greater role in those countries where corporate law gives companies significant leeway in organizing their own governance. The emergence of codes as part of a wider regulatory landscape therefore raises fundamental problems. It may come along with a redefinition of the role of the state, cause disruption when integrated into the pre-existing environment of legal systems and lead to a hybridization of legal systems. In this context, it is interesting to compare (1) the unclear and evolving legal status of codes and (2) their formal integration into legal systems.
The codes’ legal status covers the way codes are implemented and, taking account of their specific issuers, extends to legitimacy-related issues. Issuers influence how codes are drafted and how legitimate they are. Certain authors acknowledge the legal character of codes (Aguilera and Cuervo-Cazurra 2009; Hopt 2011) contending their issuers have obtained quasi-government power, the diminishing power of governments in regulatory corporate governance. Other authors are more reluctant; suspicions remain that codes may cater to the interests of their private issuers which may not be consistent with the interests of society at large. As such, any comparison of codes’ legal status should take...
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