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Regulatory Regimes and Norms for Directors' Remuneration: EU, UK and Belgian Law Compared

Published online by Cambridge University Press:  20 December 2012

Joseph Lee*
Affiliation:
Joseph Lee, PhD (London), Lecturer in Business Law, Nottingham University Business School, UK; Collaborateur scientifique, Faculty of Law, University of Liège, Belgium; Attorney-at-law, New York, USA.
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Abstract

This article examines the regulation of directors' remuneration in EU, UK and Belgian law. The author argues that there are two categorises of norms for the regulatory framework of directors' remuneration: one is market-based, market efficiency norms of agency costs; the other is socio-legal norms. The paper argues that agency costs – a responsive mode of governance – alone cannot adequately address the problems of directors' remuneration. On the other hand, socio-legal norms – which are value and ethics-focused – can better construct a paradigm capable of addressing a broader issue of directors' remuneration in the EU context. Agency costs-based regulation has been used by the EU whereas socio-legal matters have been left to Member States. The article shows how socio-legal norms could form the underlying basis of the regulatory regime by examining the laws in the UK and Belgium. It is concluded that the European Court of Justice will need to carry out the role of negative integration by harmonising these social values in developing EU company law.

Type
Articles
Copyright
Copyright © T.M.C. Asser Press and the Authors 2012

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