Harald Baum Is the ‘Independent Director’ an Effective Corporate Governance Tool Across National Jurisdictions?
© Maximilian Dörrbecker
Max Planck Society
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Max Planck Institute for Comparative and International Private Law
The Max Planck Institute for Comparative and International Private Law in Hamburg is dedicated to performing foundational research and promoting the transfer of knowledge in the fields of comparative and international private law and business law. By analysing similarities and differences in the legal regimes of Europe as well as other parts of the world, the Institute studies the interaction of private rule-making, national legal systems, supranational law and interstate treaties. The research performed at the Institute also serves to lay the groundwork for an international understanding of law and to help develop rules and legal instruments with which the application of national law can be better coordinated in cross-border matters. This is an academic mission of considerable significance particularly within a united Europe and against the background of increasing globalisation and a corresponding internationalisation of law. (Source)
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.
LT Video Publication DOI: https://doi.org/10.21036/LTPUB10411
The Rise of the Independent Director: A Historical and Comparative Perspective
- Harald Baum
- 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