The Figure in the Landscape: A Comparative Sketch of Directors’ Self-Interested Transactions

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A central question that underlies many analyses of corporate governance is whether the law and legal institutions have a constituent role in shaping governance practices, or whether the law, as well as governance practices, are best viewed as the inevitable results of market forces, centered upon capital markets. A separate, but related question is the degree to which mechanisms of governance -- such as shareholder voting, take-over bids, independent directors, mandatory disclosure, and shareholder litigation -- can function adequately as substitutes for one another. The perspective I offer on these questions is based on a comparison between the United States and the United Kingdom, which are sufficiently similar in relevant respects that their divergences are illuminating.


This article was first published, in slightly different form in 2 Company, Financial & Insolvency Law Review 190 (1999)