Hostname: page-component-76fb5796d-22dnz Total loading time: 0 Render date: 2024-04-26T11:38:11.926Z Has data issue: false hasContentIssue false
  • English
  • Français

Teaching corporate governance

Published online by Cambridge University Press:  02 January 2018

Brian R Cheffins
Brian R Cheffins*
Affiliation:
Faculty of Law University of Cambridge
Get access Rights & Permissions [Opens in a new window]

Abstract

Corporate governance is ‘hot’ in the United Kingdom and legal academics have written widely on the subject. Still, the topic has been virtually ignored as an academic discipline for law students. This article argues that corporate governance is a subject which should be included in the law curriculum and describes how a course dealing with the topic might be structured.

Type
Research Article
Information
Legal Studies , Volume 19 , Issue 4 , December 1999 , pp. 515 - 525
Copyright
Copyright © Society of Legal Scholars 1999

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1. Quoted in B R Cheffins ‘Corporate Governance in the United Kingdom: Lessons for Canada’ (1997) 28 Can Bus LJ 69 at 69. See also T J Gallagher ‘Accountability is Going Global’ Directors & Boards, Winter 1998, p 12.

2. M Conley ‘Moves to Halt Another Decade of Excess’ Financial Times, 5 August 1999, p 10:‘[t]he 1990s have been the decade of corporate governance’.

3. Report of the Committee on Corporate Governance (London: Gee, 1998). chaired by Sir Ronald Hampel (hereinafter Hampel Report), para 1.1 and G McCormack ‘Institutional Shareholders and the Promotion of Good Corporate Governance’ in B Rider (ed) The Realm of Company Law: A Collection of Papers in Honour of Professor Leonard Sealy, SJ Berwin Professor of Corporate Law at the University of Cambridge (London: Kluwer, 1998)p 131 at 131.

4. Hampel Report, above n 3; Report of the Committee on the Financial Aspects of Corporate Governance (London: Gee, 1992), chaired by Sir Adrian Cadbury (hereinafter Cadbury Report); Directors' Remuneration: Report of a Study Group Chaired by Sir Richard Greenbury (London: Gee, 1995) (hereinafter Greenbury Report).

5. The Stock Exchange Listing Rules (hereinafter Listing Rules), para. 12.43A and Appendix ‘The Combined Code’.

6. Department of Trade and Industry Modem Company Law For a Competitive Economy (London: DTI, 1998) p 10.

7. A brief sampling includes: P L Davies ‘Institutional Investors as Corporate Monitors in the UK’ in K J Hopt and E Wymeersch (eds) Comparative Corporate Governance: Essays and Materials (Berlin: Walter de Gruyter, 1997) p 47; S Leader and J Dine ‘United Kingdom’ in A R Pinto and G Visentini (eds) The Legal Basis of Corporate Governance in Publicly Held Corporations: A Comparative Approach (The Hauge: Kluwer, 1998) p 219; and C Villiers ‘Self Regulatory Corporate Governance - Final Hope or Last Rites?’ (1998) 3 Scottish L & PQ 208. Various other examples are cited elsewhere in the footnotes.

8. For instance, of the nine company law academics who agreed to give a lecture in the 1999 Company Lawyer Lecture series and provided a title in advance for their talk, three referred to ‘corporate governance’ in their title (a copy of the relevant documentation is on file with the author).

9. LLM students at Cambridge will be able to take a corporate governance option beginning in 1999–2000 and Paddy Ireland of Kent Law School is planning to organise a course on the topic in the near future. Otherwise, the author is unaware of any other UK law department which offers a course devoted solely to corporate governance.

10. C Bradley et al ‘The Future of Company Law: Themes and Structures’ in P B H Birks (ed) Examining the Syllabus: Beyond the Core (Oxford: Oxford University Press, 1993) p 41 at 44.

11. For a similar paper dealing with education law, see A Ruff ‘Education Law: The Chrysalis in the Undergraduate Law Curriculum’ (1998) 32 Law Teacher 169.

12. W Bessler et al ‘Going Public: A Comparative Governance Perspective’ in K J Hopt et a1 (eds) Comparative Corporate Governance – The State of the Art and Emerging Research (Oxford: Clarendon Press, 1998) p 569 at 570 and A Solomon and J F Solomon ‘Empirical Evidence of Long-Termism and Shareholder Activism in UK Unit Trusts’ (1999) 7 Corp Gov - An International Review 288 at 299.

13. See eg A Shleifer and R W Vishny ‘A Survey of Corporate Governance’ (1997) 52 J Fin 737 at 737 and E Sternberg Corporate Governance: Accountability in the Marketplace (London: IEA, 1998) pp 18–22.

14. Above n 3, paras 1.15, 1.16. The members of the Cadbury Committee discussed corporate governance in similar terms: above n 4, para 2.5.

15. Above n 6 at 9.

16. Examples include M M Blair Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century (Washington, DC: Brookings Institution, 1995) p 3 and S Sheikh and S K Chattejee ‘Perspectives on Corporate Governance’ in S Sheikh and W Rees (eds) Corporate Governance and Corporate Control (London: Cavendish, 1995) p 1 at 3.

17. S Turnbull ‘Corporate Governance: Its Scope, Concerns and Theories’ (1997)5 Corp Gov - An International Rev 180 at 181, 188.

18. Cadbury Report, above n 4, para 3.1 and Greenbury Report, above n 4, para 1.4.

19. RAG Monks and N Minow Corporate Governance (Cambridge, Mass: Blackwell, 1995) pp 270–271.

20. See E Berglof ‘Reforming Corporate Governance: Redirecting the European Agenda’ (1997) 24 Economic Policy 93 at 93 as well as Sir Adrian Cadbury ‘Postscript’ in Sheikh and Rees, above n 16, p 391 at 393.

21. M E Kissane ‘Global Gadflies: Applications and Implementations of US.-Style Corporate Governance Abroad’ (1997) 17 NYL Sch J Int'l & Comp L 621 at 672–673.

22. In North America, for instance, most law schools offer a course in securities regulation and imposing such a restriction is standard practice. On the other hand, at the London School of Economics, the concurrent study of the law of business associations and corporate insolvency has proved to be beneficial: Bradley et al, above n 10 at 44.

23. See eg A Hicks ‘Teaching Modem Company Law: The Pint Pot’ (1992) 26 Law Teacher 4 at 5 and D K Smith ‘Studying Modem Corporations Law in Context’ (1999) 33 Law Teacher 196 at 199.

24. I Snaith ‘Company Law on Degree Courses: Survey Report’ (1990) 11 Co Lawyer 177 at 180.

25. Snaith, above n 24.

26. On the dangers involved with imparting inside information to shareholders, see Criminal Justice Act 1993, ss 52–64; Cadbury Report, above n 4, para 6.14 and Hampel Report, above n 3, para 5.12.

27. R Smerdon A Practical Guide to Corporate Governance (London: Sweet & Maxwell, 1998) pp 16, 67 and J Gibbs and D Tankel ‘Rewarding Executives: Disclosure and Approval’ PLC, October 1998, 31 at 31.

28. The Listing Rules have a status equivalent to subordinate legislation. See Financial Services Act 1986, ss 145, 153 and B R Cheffins Company Law: Theory, Structure and Operation (Oxford: Clarendon Press, 1997) p 412.

29. Listing Rules, above n 5, para 12.43A(a) and Combined Code, above n 5, Preamble, paras 4, 5.

30. Hampel Report, above n 3, para 1.25.

31. Hampel Report, paras 1.8, 1.9; see also H Short ‘Corporate Governance: Cadbury, Greenbury and Hampel - A Review’ (1999) 7 J of Fin Reg and Comp 57 at 60.

32. J Charkham ‘Corporate Governance; Overcoded? Has Hampel Meant Progress?’ (1998) 10 Eur Bus J 179 at 180, 183 and J Parkinson and G Kelly ‘The Combined Code on Corporate Governance’ (1999) 70 Pol Q 101 at 104.

33. See eg Cheffins, above n 28 pp 24–28.

34. B R Cheffins ‘Using Theory to Study Law: A Company Law Perspective’ (1999) 58 CW 197 at 219.

35. Turnbull, above n 17 at 180.

36. Monks and Minow, above n 19 p xv.

37. Cf Bradley et al, above n 10 at 44.

38. Bradley et al, above n 10.

39. On the impact which Law Society regulations have on the undergraduate curriculum, see P Birks ‘Short-Cuts’ in P B H Birks (ed) Reviewing Legal Education (Oxford: Oxford University Press, 1994), p 20 at 22–26.

40. Above n 9.

41. On cases and materials available for an undergraduate company law course, see eg L S Sealy Cases and Materials in Company Law (London: Butterworths, 6th edn, 1996); H RajakA Sourcebook of Company Law (Bristol: Jordans, 2nd edn, 1995) and A Hicks and S H Goo Cases and Materials on Company Law (London: Blackstone, 2nd edn, 1997). The situation is much the same in other jurisdictions, though there are some student texts and casebooks which deal in depth with certain aspects of corporate governance: eg S Berns and P Baron Company Law and Governance: An Australian Perspective (Melbourne: Oxford University Press, 1998) and LE Mitchell et al, Corporate Finance and Governance: Cases, Materials, and Problems for an Advanced Course in Corporations (Durham, NC: Carolina Academic Press, 2nd edn, 1996).

42. Examples of published collection of essays include Sheikh and Rees, above n 16; D D Prentice and P R J Holland (eds) Contemporary Issues in Corporate Governance (Oxford: Clarendon Press, 1993) and S Deakin and A Hughes, (eds) Enterprise and Community: New Directions in Corporate Governance (Oxford: Blackwells, 1997).

43. Above n 27.

44. Above n 27 at vii.

45. See D D Prentice ‘Some Observations on the Teaching of Company Law’ in Birks, above n 39 p 33 at 35 (making similar observations with respect to using theoretical company law scholarship in the classroom).

46. Above n 5.

47. See eg Company Law Review Steering Group Modern Company Law for a Competitive Economy (London: DTI, 1999) ch 5.1.

48. Cheffins, above n 28 chs 13 and 14; J E Parkinson Corporate Power and Responsibility: Issues in the Theory of Company Law (Oxford: Clarendon Press, 1993) chs 6 - 12 and E Ferran Company Law and Corporate Finance (Oxford: Oxford University Press, 1999) Pt 11. See also G P Stapledon Institutional Shareholders and Corporate Governance (Oxford: Clarendon Press, 1996), which examines the role which institutional investors play in corporate governance in the UK and in Australia.

49. See above n 42.

50. See articles such as A Dignam ‘A Principled Approach to Self-Regulation? The Report of the Hampel Committee on Corporate Governance’ (1998) 19 Co Lawyer 140; A Belcher ‘Regulation by the Market: The Case of the Cadbury Code and Compliance Statement’ [1995] JBL321 and G Kelly and J Parkinson ‘The Conceptual Foundation of the Company: A Pluralist Approach’ (1998) 2 CfiLR 174.

51. Other journals that have published articles on corporate governance which are potentially relevant for a legal audience include Political Quarterly (eg Parkinson and Kelly, above n 32 and J Freedman ‘Accountants and Corporate Governance: Filling a Legal Vacuum?’ (1993) 64 Pol Q 285); the Journal of Financial Regulation and Compliance (eg Short, above n 3 1); and Long Range Planning (eg J Plender ‘Giving People a Stake in the Future’ (1998) 3 1 Long Range Planning 211).

52. See eg Companies (Tables A to F) Regulations 1985, SI 1985/805, Table A, arts 70,72,73 and 84.

53. For more detail on the foregoing matters, see Cheffins, above n 28 at 117–124.

54. For statistics on the ratio of executive to non-executive directors, see K Peasnell et al ‘A New Model Board’ Accountancy International, July 1998, p 91.

55. D G Smith ‘Corporate Governance and Managerial Incompetence: Lessons from Kmart’ (1996) 74 NCLR 1037 at 1085; see eg Cadbury Report, above n 4, para 4.5 and Hampel Report, above n 3, para 3.8.

56. For an analysis of these questions and related issues, see Cheffins, above n 28 ch 13.

57. For an overview of the issues involved, see Cheffins, above n 28 ch 14.

58. Hampel Report, above n 3, para 5.1.

59. Hampel Report, above n 3, para 5.5 and Cadbury Report, above n 4, paras 6.6,6.11. Corporate governance experts who have expressed support for the thesis being advanced include Stapledon, above n 48 at 17–18,207–212,284–285; J P Charkham ‘A Larger Role for Institutional Investors’ in N Dimsdale and M Prevezer (eds) Capital Markets and Corporate Governance (Oxford: Clarendon Press, 1994) p 99 and B S Black ‘Agents Watching Agents: the Promise of Institutional Investor Voice’ (1992) 39 UCLA L 811.

60. See Company Law Review Steering Group, above n 47, ch 5.1; on the ‘pluralist’ vision of the company, see ibid, para 5.1.13.

61. On this topic, see B R Cheffins ‘Current Trends in Corporate Governance: Going from London to Milan via Toronto’ to be published in the Duke Journal of Comparative and International Law.