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Operationalising a Stakeholder Conception in Company Law

Chiu, H; (2016) Operationalising a Stakeholder Conception in Company Law. Law and Financial Markets Review , 10 (4) pp. 173-192. 10.1080/17521440.2017.1309161. Green open access

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Abstract

UK company law, in its arguably insular shareholder-focused framework, has been called into question regarding its fitness for purpose11 See http://www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/news-parliament-2015/corporate-governance-inquiry-launch-16-17/, 30 September 2016. View all notes in the continuing litany of corporate malpractices and scandals22 From the failure of Polly Peck, Maxwell and BCCI in the 1990s to the failures of American giants Enron and World.com in the early 2000s, and the failure of Rover in the UK at about the same period, the onset and near-failure of giant banking corporations in 2007–09, and most recently the failure of BHS in the UK in 2016. View all notes since the 1992 resolve to reform corporate governance.33 The Cadbury Code of Corporate Governance introduced in 1992 in response to the failures of Polly Peck, Maxwell and BCCI. View all notes The excessive focus on shareholder interests, rights and powers in UK company law is starting to reveal failures that not only jeopardise companies’ viability but also give rise to adverse social impact. We argue that the shareholder primacy-led foundations for UK company law should be revisited, and that the adoption of a stakeholder conception in company law can be both normatively and positively supported. We suggest the contours of legal reform in company law: to introduce stakeholder covenants with the company, and recalibrate shareholder powers and enforcement. We believe that these key aspects of reform are possible and important to usher in a new framework for company law that will address the efficiency and social legitimacy needs of the company.

Type: Article
Title: Operationalising a Stakeholder Conception in Company Law
Open access status: An open access version is available from UCL Discovery
DOI: 10.1080/17521440.2017.1309161
Publisher version: http://dx.doi.org/10.1080/17521440.2017.1309161
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of Laws
URI: https://discovery.ucl.ac.uk/id/eprint/1546446
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