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Towards a Constitutional Theory of Corporate Governance


Benz, Matthias; Frey, Bruno S (2006). Towards a Constitutional Theory of Corporate Governance. Working paper series / Institute for Empirical Research in Economics No. 304, University of Zurich.

Abstract

The idea that there is a uniformly “optimal” governance structure for corporationsnfeatures prominently in current debates and policy proposals. In this paper, we propose andifferent, constitutional theory of corporate governance: the criterion for a good corporatengovernance structure is whether it is freely chosen by the shareholders. We illustrate ournapproach by comparing the constitutional rights of shareholders under US corporate law and Swiss corporate law. Moreover, we discuss the mandatory provisions that shareholders would likely include in corporate law at a constitutional stage, behind the veil of ignorance.

The idea that there is a uniformly “optimal” governance structure for corporationsnfeatures prominently in current debates and policy proposals. In this paper, we propose andifferent, constitutional theory of corporate governance: the criterion for a good corporatengovernance structure is whether it is freely chosen by the shareholders. We illustrate ournapproach by comparing the constitutional rights of shareholders under US corporate law and Swiss corporate law. Moreover, we discuss the mandatory provisions that shareholders would likely include in corporate law at a constitutional stage, behind the veil of ignorance.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:September 2006
Deposited On:29 Nov 2011 22:47
Last Modified:05 Apr 2016 15:11
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html
Permanent URL: http://doi.org/10.5167/uzh-52260

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