Corporate governance and the protection of investors: A comparative and critical perspective on the legal responses to the ultimate concern and on potential developments

Abstract

This paper, after reviewing the mechanisms for the direct and indirect protection of minority shareholders in the US, France, Germany and the UK, assesses these machanisms in light of a "subjective" aspect of minority shareholders protection (protection of weaker shareholders vs. stronger shareholders and/or management) and in light of an "objective" aspect of minority shareholders protection (conditions for the long-term success of the company) that can both be extrapolated from the OECD Principles. In this assessment, the paper, after evidencing the factors pushing towards formal convergence both within the EC and at the wider international level, and the need for functional convergence, calls into discussion the usefulness itself of international comparisons based on the formal rules in place in one jurisdiction commonly used as a yardstick, and suggests that a new minority shareholders protection index could be identified, taking into consideration both the subjective aspect and the objective aspect of investors protection.