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The ‘independent director’ was introduced as a corporate governance tool in the United States in the 1970s and quickly spread to the United Kingdom and from there to Continental Europe and Asian economies. The research presented in this video examines whether this legal transplant works in economies that have different shareholder structures and thus different agency conflicts than the US, and asks why these countries adopted it. Using comparative analysis, HARALD BAUM explains, the researchers discovered that – depending on the context – the independent director can be an almost meaningless tool. They also found that countries were impelled to introduce the concept due to a competition for funds from international investors and organizations that work on American principles of corporate governance. The research results suggest that a greater variety of regulatory tools might be fruitful for the international market.


Harald Baum is Senior Research Fellow and Head of the Japan Law Department at the Max Planck Institute for Comparative and International Private Law. His current positions further include that of Professor at the University of Hamburg as well as Research Associate at the European Corporate Governance Institute, Brussels. Baum is also Vice-president of the German-Japanese Association of Jurists. The focus of his research lies on business law, corporate governance and capital markets in the EU, Japan and the US. He has published and edited numerous books and articles on these subjects. Furthermore, he is the executive founding editor of the Journal of Japanese Law.


Max Planck Institute for Comparative and International Private Law

Different countries, different cultures – and usually also a different basis for legal systems. The development of the European single market, the global integration of multinational business and commercial companies as well as the increasing internationalisation of our daily lives require that areas of private and commercial law provide solutions that cannot only be derived from the legal systems of individual countries. Academics at the Max Planck Institute for Comparative and International Private Law in Hamburg apply analysis of the differences and similarities between different legal systems to develop a foundation for an international understanding of law and its application to cross-border circumstances. This also includes addressing the methodological issues of comparative law and unification of law. The central research tool of the Institute is its library, which contains one of the world’s most extensive collections of literature on civil law. ( Source )
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Original publication

The Rise of the Independent Director: A Historical and Comparative Perspective

Baum Harald
Max Planck Institute for Corporate and International Private Law Research Paper Series
Published in 2016

Independent Directors in Asia: A Historical, Contextual and Comparative Approach

D. W. Puchniak, H. Baum and L. Nottage (eds.)
Cambridge University Press (In Press)
Published in 2017

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