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Advanced Lecture (Corporate Law and Governance) (E)

[Lecture Course Basic Information]

Lecturer: MCGINTY Sean Michael
Other Lecturers: *
Course Type: Lecture
Semester: Spring
Year:* 3, 4
Course Periods:* Tuesday 14:45-16:15 (4th period)
Credits:* 2
Whether mandatory or not:* Not
Classroom:* Course will be held online this term, students are requested to not come to campus.

 

Outline of Lecture Course

This course introduces students to the major issues in the field of corporate law and governance. The corporation, despite the transnational level at which many large ones now operate, remains a creation of national or subnational (state, provincial) law across the world. The laws across almost all jurisdictions have generally come to provide the corporation with certain common characteristics such as legal personality, limited liability, the use of transferable shares and management under a board of directors. Despite these similarities, there remains significant differences both in the laws on the books and the law in practice across countries which raise important questions that animate much of contemporary research.

 

Rather than focusing specifically on any single jurisdiction, this course takes a comparative approach to the subject, looking at how major jurisdictions differ in their approaches to these issues.   Its focus is also divided between both corporate “law” and corporate “governance”, two related but distinct areas of study. 

 

In terms of the “comparative” part, the course will primarily use the comparative method of studying legal rules by examining how legal systems in different social and economic contexts handle certain core problems of corporate law and governance.

 

The distinction between corporate “law” and “governance” is relevant in so far as the former largely involves the study of corporate law statutes (such as the Japanese Companies Act) and doctrines related thereto, while the latter involves the study of the corporation as a business organization which must create mechanisms by which its various constituencies – shareholders, creditors, managers, employees and so on – control the relationships and processes which allow it to operate. The latter is thus somewhat broader than the former.   Though it likewise concentrates on the study of rules governing corporations, it draws in rules from both legal sources (corporate law, securities regulation, competition law and so on) and non-legal sources (such as social norms or codes of conduct).

IMPORTANT NOTE: Due to the switch from in-class to online learning this term, there will be some alterations to the 15 week schedule listed below.  We will cover the same content, but instead of 15 1.5 hour lectures I will break it down into smaller recorded lectures which will be distributed each Friday. 

 

Course Objectives

The main objective of the course is to familiarize students with the basic concepts of corporate law and governance, the issues these have to address and how these differ across countries.  A more general objective is to allow students to draw conclusions on broader questions currently being explored in corporate law and governance research. These include the question of whether or not corporate laws are converging on an optimal model, whether or not countries can effectively “transplant” corporate law rules or governance mechanisms, and why differences in corporate law rules and practices continue to persist in a globalized world.

Textbooks

There is no required textbook for the course.  However if you are interested in learning more and have some spare cash lying around these are some textbooks which  are useful:

Mathias Siems and David Cabrelli, Comparative Company Law: A Case-Based Approach (Hart, 2013)

Reinier Kraakman et al., The Anatomy of Corporate Law: A Comparative and Functional Approach (Oxford University Press, 2009)

 

Course Materials/Supplementaries

These will be distributed through the Canvas system and NUCT.  

Lectures will be pre-recorded and uploaded each week, so you can download them and listen to them whenever you want (I'll do it each Friday).  I'll put them up both here on Canvas and on NUCT.  The lectures I upload will probably deviate a bit from the 15 week outline listed below, which was prepared for in-class lectures.  Content-wise it will be the same, but I will probably break the content down into smaller lectures.  For ease of following, each of them will be numbered, so just follow them in the order the files are named (1, 2, 3 etc).

Assessment

Assessment will be:

50% midterm examination

50% Final Exam

Both of these will be done online (mid term in June, Final exam in early August).  Instructions on the date and format will be notified via NUCT.  

Prerequisites None
Instructions for Out-of-Class Study Nothing in particular, though please do the readings each week.
Responding to Student Questions

Prof. McGinty can be reached by email at smcginty@law.nagoya-u.ac.jp 

 

Other Notes None.

 

Lecture Theme Lecture Course Description Learning outside the class Related page
1 Introduction Class Overview, introduction to materials * *
2 The Corporation In this class we'll get to know what the corporation is.  What is the historical origin of this way of organizing businesses? What are its legal features?  And what is  function its intended to serve? * *
3 Shareholder and Stakeholder Models

In this class we'll get to know the various theories underpinning the corporation.  These basically go to the heart of the question of which of the many stakeholders with an interest in it - shareholders, managers, employees, creditors, society at large - the rules governing it should prioritize.

 

Readings:

Lynn A. Stout, Bad and Not-so-Bad Arguments for Shareholder Primacy 75 Southern California Law Review 1189 (2002)

* *
4. Incorporation

In this class we'll go through the process of how corporations are formed.

5. The Board of Directors

In this class we'll take a look at the board of directors.  Who are these people and what do they do?  As we'll see, the answer to these questions vary from jurisdiction to jurisdiction.

Readings:

Paul Davies, Klaus J. Hopt, Richard G.J. Nowak and Gerard Van Solinge (eds) Corporate Boards in Law and Practice: A Comparative Analysis in Europe (Oxford University Press, 2013) pp. 9-37

Bruce E. Aronson, The Olympus Scandal and Corporate Governance Reform: Can Japan Find a Middle Ground Between the Board Monitoring Model and Management Model? 20 Journal of Japanese Law 85 (2013)

* *
6. Duties of Directors

In this class we'll look at the duties which corporate law imposes on directors.  Breaches of these duties are often a cause of lawsuits against directors so we'll examine some cases in which courts have defined the extent of these duties and how strictly the courts will review director decisions. 

Smith v. Van Gorkom 488 A. 2d 1985

In Re The Walt Disney Company Derivative Litigation 906 A.2d 27

Guth v. Loft, Inc 23 Del. Ch. 255

Carsten Gerner—Beuerle, Phillip Paeche and Edmund Phillp Schuster, Study on Directors` Duties and Liability (Report to European Commission, 2013)

* *
7 The Shareholders  In this class we'll look at the shareholders.  Who are these people (many aren't actual people), what are their interests in the corporation (not all are the same) and how does corporate law define their relationship with the company and the directors who run it? * *
8 Shareholder Remedies

In this class we'll look specifically at what remedies corporate laws in different jurisdictions provides to shareholders when their rights or interests are breached.  

 

Readings;

Dan Puchniak and Masafumi Nakahigashi, Japan`s Love for Derivative Actions: Irrational Behavior and Non-Economic Motives as Rational Explanations for Shareholder Litigation 45 Vanderbilt Journal of Transnational Law 1 (2012)

 

* *
9 Takeovers, Mergers and Acquisitions 

In this class we'll learn about transactions in which corporations are either taken over, merged with another corporation, or have their major assets sold.  Why do investors sometimes want to take over a company, and how do the directors and CEOs of companies respond (hint: sometimes they don't like it).  What are the legal rules that govern takeover transactions?  Are takeover transactions beneficial (both to those directly involved and to society as a whole) or harmful?

 Readings: 

Jennifer G. Hill, Takeovers, Poison Pills and Protectionism in Comparative Corporate Governance University of Sydney Faculty of Law Research Paper No. 10/120 (2010)

Burkart, Mike C. and Panunzi, Fausto, Takeovers (January 2006). ECGI - Finance Working Paper No. 118/2006. Available at SSRN: https://ssrn.com/abstract=884080 

* *
10 Executive Compensation

In this class we'll look at how the pay of corporate officers and directors is decided and related legal issues.  Do these people get paid too much? How are they paid?  And what can or should be done about it?

 

Randall S. Thomas and Christoph Van der Elst, Say on Pay Around the World Vanderbilt University Faculty of Law Law and Economics Working Paper 14-10 (2014)

Robert J. Jackson and Curtis J. Milhaupt, Corporate Governance and Executive Compensation: Evidence from Japan 111 Columbia Business Law Review 3 (2014)

* *
11 Corporate Social Responsibility In this class we'll look at the question of to what degree corporate decision makers are allowed to take into account the interests of society as a whole when making corporate decisions.  * *
12 Corporate Creditors In this class we'll look at the role played by creditors - those who lend money to a corporation - in corporate governance.  * *
13 Securities Regulation In this class we'll look at the rules which govern the issuance and trading of securities, primarily stocks. * *
14 Comparative Question: How do Corporate Laws Change Over time? In this class we'll take a look at a bigger question, which is how corporate laws across many countries change over time. Are they becoming more similar (converging) or do they retain distinct aspects?  And does any of this matter to economic performance?   * *
15 Review In this class we'll review the content of the entire course and consider the overall picture of corporate law and governance.   * *

※Students who wish to enroll as a member should access the URL below.
Log in using the Nagoya University ID and password, and click on "Enroll in Course".

https://canvas.law.nagoya-u.ac.jp/enroll/PMWA9C

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