Klaus J. Hopt
Max Planck Institute for Comparative and International Private Law
Comparative Corporate Governance : The State of the Art and International Regulation
Corporate governance, i.e. the system by which companies are directed and controlled, has become a key topic for legislation, practice and academia in all modern industrial states. The financial crisis has highlighted the problems. Yet one goes astray if one does not understand how the unique combination of economic, legal and social determinants of corporate governance functions in each country. A functional comparative analysis based on reports from 33 countries and with references to economic literature may help. After dealing with the concepts, instruments (including soft law) and sources of corporate governance, the Article analyses the regulation and practice of the various actors in corporate governance: mainly the board and the shareholders, but also labor, gatekeepers (in particular the auditors), the supervisors and the courts. In the end, a great deal of convergence appears, though many pathdependent differences remain.
Corporate governance as a concept and as a problem area was first discussed in the United States; later, the European debate started in the United Kingdom. From there the issue of corporate governance began its pervasive course through all the modern industrial states, including Australia, China and Japan. Contributions and research projects on the topic abound all over the world.1 Since 1995 the European Corporate Governance Network in Brussels, now known as the European Corporate Governance Institute and based in Luxembourg,2 has been carrying out its interdisciplinary work, gathering under its banner academics and practitioners, lawyers and economists, researchers and regulators. Their common aim is to better understand corporate governance and to improve it. In the meantime, corporate governance institutes and research groups have been formed in many countries and universities, including Harvard, Oxford, Cambridge, Hamburg and others. The topic is of particular concern in practice, especially for the shareholders, stock exchanges, listed corporations, banks and financial institutions, industrial associations, regulators and parliaments of many countries. During the last two decades in many of these countries, corporate and capital market law reforms have taken place or are underway with the express or implicit aim of improving corporate governance or particular elements of it.