Evolutions, Corporate, Corporations, Governance, Ethics, Business, Standards, Conduct, Principles, Regulatory, and Regulation

In a world where the implications and consequences of corporate actions and decisions are potentially far-reaching and lasting, ethical standards – their observance and their breach – must be part of the language of business conduct, whether in the context of corporate transgressions, regulatory effectiveness, terms of engagement between business and their stakeholders, or the metrics used by investors in assessing performance and risk and understanding long-term value.This critically important book proposes a new paradigm for understanding, developing and maintaining standards of corporate governance. Its point of departure is not a position along the diverse paths of traditional corporate governance and regulatory theory, law and practice, nor specific questions of how to institute, implement and observe policies and practices that function as proxies for good governance. Instead, it starts with the idea of framing governance generally, and corporate governance specifically, as a matter of conduct that is guided by a set of fundamental ideals and principles. Evolutions in Corporate Governance attempts to answer the wider question of how to re-imagine a framework within which 'good' corporate governance – that takes account of and is responsible for the social, environmental, ethical as well as legal and economic dimensions of business conduct – is addressed alongside issues of profitability and competition, in the face of forces of globalization and business influence that are testing the limits of what can be accomplished by traditional law and regulation. Dempsey contends that meaningful change in behaviour will only come when there is a corporate governance framework that explicitly encompasses both law and ethics.
Unlike the British model, much of what is considered to be regulation of the corporate governance of corporate entities in the United States is effected indirectly through the regulation of securities markets pursuant to federal securities law. This distinction is important in locating the appropriate authority for matters of corporate governance when considering and comparing different jurisdictional practices. It is also critical to understanding the fundamental distinction between corporate governance as constitutive and relatively uncontested, as in the British model, and corporate governance as additive and consequently contested as it is in the United States.The departure from the British model resulted from a constitutional divide between federal and state law that prevented Congress in 1930 from adopting a federal model of incorporation that reflected in full the British Companies Act 1929 despite the desire and intention to do so. The United States Supreme Court confirmed the original legislators’ intention to follow the British model in its judgement in Gustafson v. Alloyd Co. 513 U.S. 561 (1995). Supreme Court Justice Kennedy, regarding the proper basis for interpreting the civil liability provisions of the Securities Act 1933, ss. 11 and 12, stated ‘[F]ar from suggesting an intent [sic] to depart in a dramatic way from the balance struck in the British Companies Act, the legislative history suggests an intent to maintain it’.Instead, Congress proceeded with an accommodation of federal and state constitutional jurisdiction in the form of the 1933 Securities Act that seeks to regulate the governance of companies indirectly by means of direct regulation of the sale of securities. That is, using the federal jurisdiction over the market for the sale and exchange of securities, as a means to attach corporate governance requirements as between offerer and purchaser of shares.