Edited by Alessio M. Pacces
Comment on John Armour, ‘Enforcement Strategies in UK Corporate Governance: A Roadmap and Empirical Assessment’
Roberto Pardolesi The first thing to say is that John Armour is simply too smart, and his chapter too sophisticated for my almost naïve command of the issues canvassed in his pages. Given this huge handicap, I am forced to a candid admission: the best that I can do is to stockpile a few, scattered remarks and submit a couple of disingenuous questions. Second, summing up very briefly the core of John Armour’s argument. Much in the vein of John Coffee, he denounces the inanity of an approach focused entirely on the black letters of the law in the books, and stresses the crucial role of the enforcement strategies, the law in action. This is why he proposes an original taxonomy, based on a double-entry matrix for enforcement: public/private, on the one hand, and formal/informal, on the other. Relying on such a framework, he undertakes the ambitious project of evaluating the contribution of each of the cells of the matrix in the realm of the UK listed companies. With the mastery of an economic scholar, John Armour, himself a lawyer, collects crude figures about private formal enforcement, a category including minority shareholder suits (the mythical derivative actions), securities litigation concerning misleading statements or omissions in disclosure, and insolvency litigation. His conclusion concerning the effectiveness of this kind of disparate pressure is merciless: it appears close to nil. With the sole exception of the US, this conclusion would obtain – I believe – for most jurisdictions I am aware of. Having thus...
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