Corporate Law and Governance Review

Journal Information
ISSN / EISSN : 2707-1111 / 2664-1542
Published by: Virtus Interpress (10.22495)
Total articles ≅ 29
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Corporate Law and Governance Review, Volume 3, pp 4-6; https://doi.org/10.22495/clgrv3i1editorial

Abstract:
Corporate governance and corporate law cover a wide range of eminent topics for the effective governance system. The articles published in this issue have focused particularly on the board configuration, commercial code regulations about the managers’ decision and compensation, the comparative perspective of the common law rule on pre incorporation contracts, and the responsibility of the company with the authorized fictitious capital from the evidence of emerging markets. Moreover, this issue includes a book review of the theoretical, essential, and international practices of corporate governance, which consists of various timely and interesting concepts, such as the role of institutional investors in corporate governance, the board of directors’ impact on performance and the role of non-executive directors, the audit function and the role of regulation international corporate governance, and socially responsible investment, etc.
José Manuel Bernardo Vaz Ferreira
Corporate Law and Governance Review, Volume 3, pp 53-57; https://doi.org/10.22495/clgrv3i1p5

Abstract:
This review covers the textbook titled “Corporate governance: Theoretical essentials and international prectices”, authored by Aws Alhares and Naser Ibrahim Abumustafa (Virtus Interpress, 2021; ISBN: 978-617-7309-17-7). The review focuses particularly on the relationship between corporate governance and financial structure, the role of institutional investors in corporate governance, the board of directors’ impact on performance and the role of non-executive directors, the audit function and the role of regulation international corporate governance, and socially responsible investment. It also highlights the contribution of this textbook to the ongoing discussion on key points relating to corporate governance
Yalid Yalid, Ryan Aditama, Sindi Sindi, Husni Tamrin, Iswandi Iswandi
Corporate Law and Governance Review, Volume 3, pp 43-52; https://doi.org/10.22495/clgrv3i1p4

Abstract:
The phenomenon of law related to the capital subscribed and fully paid up company is limited liability companies in Indonesia, many of which are not real. The aim of this research is to answer the question: "What is the legality and legal consequences of an establishment with a fictitious authorized capital?". The research was conducted via the study of literature with this type of normative legal research supported by an empirical approach. The results of the research contribute to knowledge that the responsibility of a limited liability company with a capital payment basis is fictitious when the establishment does not essentially meet the validity of the establishment of the limited liability company itself, whether based on terms “materially” or “formally”. The terms formilnya (“formally”) depositing of the authorized capital must be issued and paid-up in full. Although the capital is fictitious or not real, if it has been approved by a legal entity, then it remains as a legitimate legal entity, but the substance of it is a limited liability company. Depositing the authorized capital which is not real contradicts the nature of the limited liability company as a legal entity
Wiseman Ubochioma
Corporate Law and Governance Review, Volume 3, pp 29-42; https://doi.org/10.22495/clgrv3i1p3

Abstract:
The question of how best to protect the interests of a promoter, a third party, and a company in pre-incorporation contracts is one that seems to have defied corporate law. Although this problem has its origin in common law, various countries have made efforts to address it through statutory reforms. The paper, therefore, examines the extent to which the Canadian and Nigerian legal regimes for the pre-incorporation contract have provided panaceas to the problem. This paper, through a comparative analysis, argues that although the legal regimes have made efforts to reform the common law rule on pre-incorporation contracts, they suffer patent defects. It also posits that notwithstanding the defects in the laws, the Canadian legal regimes offer more protection to parties to pre-incorporation contracts than Nigerian law. The paper suggests reforms in both regimes that would meet the reasonable expectations of the parties to a pre incorporation contract
Shu Li
Corporate Law and Governance Review, Volume 3, pp 17-28; https://doi.org/10.22495/clgrv3i1p2

Abstract:
This article aims to reveal the three trajectories of establishing the two-tier model and select Germany, Italy, and China to discuss the ontology of the two-tier model, its integration with other local models, and its development variants. This article compares the similarities and differences of the two-tier model in the organizational structures of three countries to show that there is institutional inertia or path dependence in the design of legal systems and rules on corporate governance. In the two-tier model, the management agency performs the corporate business, the supervisory agency supervises the corporate operations, and the relationship between the management agency and the supervisory agency is subtle and complex. Germany is the original user of the two-tier model. Italy introduced the two-tier model as an optional model in addition to the traditional model. China is learning from the world’s experience and establishing its own two-tier corporate structure based on its own conditions. As Buck and Shahrim (2005) mentioned, cultural traditions, historical development paths and models, the overall development level and maturity of the market economy, social legal awareness, and the improvement of the rule of law influence the corporate governance structure that the country chooses to adopt
Işik Özer
Corporate Law and Governance Review, Volume 3, pp 8-16; https://doi.org/10.22495/clgrv3i1p1

Abstract:
Article 625/2 of the Turkish Commercial Code (TCC), adapted from the Swiss Code of Obligations (Obligationenrecht 811, hereinafter referred as OR 811), allows managers to submit certain decisions and individual matters to the approval of the general meeting. This paper purports to reveal how this article could be interpreted and the regulations to be made in the agreements of limited liability companies in Turkish law. To do that, an interpretation of article 625/2 of TCC is developed. In addition, the effect of this article on the liability of the managers and the references made to articles 51 and 52 of the Turkish Code of Obligations (TCO) are explained. With a regulation added in the agreement of the company, the managers would either be required to submit or they would be free to choose to submit certain decisions and individual matters to the approval of the general meeting. Considering that the submission slows down the decision-making process and causes additional costs, granting the managers the right to choose becomes an important issue. However, the approval of the general meeting does not remove the liability of the managers. So when a lawsuit for liability is filed against managers, the approval of the general meeting may decrease the payment for compensation (articles 51 and 52 of TCO)
Corporate Law and Governance Review, Volume 2, pp 4-6; https://doi.org/10.22495/clgrv2i2editorial

Abstract:
This new issue contains four contributions that geographically extend from Tunisia to Germany, China, and post-colonial countries like Kenya and Uganda. This witnesses the international scope of corporate law and governance and its scalable worldwide applicability, eased by local fine tuning. In spite of this geographical common denominator, the papers evidence spicy differences in their research targets.
Fred Amonya
Corporate Law and Governance Review, Volume 2, pp 47-54; https://doi.org/10.22495/clgrv2i2p4

Abstract:
Crises force us to stop and think. And COVID-19 should. This paper examines the prospect of deep reform of national planning in the young post-colonial states (the moulding states). The paper is a contrasted case study of Kenya and Uganda. The attempt at generalisation across moulding states draws on a shared history of state formation. Two trunks define that history – post-independence conflicts and structural adjustment programme (SAP). A contrast between the two countries teases out a tension, which tension the paper uses to illuminate the two policy spaces. The analytical frame draws on control theory. The paper argues that neither country is likely to see structural reform of their national planning. Yet, the epistemological thrust of the paper is not that deduction but questions arising along with the scrutiny of the policy spaces. Those questions should provoke Africa and more broadly, the emerging economies
, Ute Schottmüller-Einwag
Corporate Law and Governance Review, Volume 2, pp 18-32; https://doi.org/10.22495/clgrv2i2p2

Abstract:
We examine how corporate governance reporting corresponds to actual conduct regarding severance payment caps for prematurely departing members of executive boards in Germany. Firstly, we evaluate the declarations of conformity for all companies listed in the CDAX between 2010 and 2014, which we use to determine conformity and deviation rates, and analyse the reasons for deviation, contributing to current research on comparative corporate governance, which focuses on when, why and how companies deviate from legitimate corporate governance goals (Aguilera, Judge, & Terjesen, 2018). Secondly, we assess the compensation amounts of all severance payments made and published by DAX companies to compare the respective severance ratio with the cap recommended by the German Corporate Governance Code (GCGC). We find that more than 20% of companies listed in the CDAX declared deviation in the declaration of conformity. Moreover, in 57% of actual severance cases where DAX companies had previously declared their conformity, the cap was exceeded. Yet, none of the companies that had exceeded the cap disclosed this in the following declaration of conformity. In most cases, the corporate reports deviated from reality and therefore could not serve as a suitable basis for decisions by the capital market.
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