Description

This lecture will focus on the two recent periods when the functions of company law were actively debated in policy circles and in academia. The first was the period of roughly forty years from the middle of the 1970s up until the financial crisis at the end of the first decade on this century. During this period, company law became a poster-child for the application of the law-and-economics approach. What emerged was the view that the purpose of company law was to reduce the costs of running businesses in the corporate form. This involved in particular the provision of an organisational structure for companies (by separating business assets from personal assets) and the reduction of the multiple agency costs which arise when a range of inputs has to be coordinated in order to produce the outputs of the business.

The second period began with the financial crisis and continues to this day. Now the focus shifted to the externalities of business activity, that is, costs which are imposed by businesses on persons outside the corporate structure and which are therefore not borne by those within it (whether managers, shareholders, employees or consumers of its products). This is not a new problem, but it has been given a new impetus by the threats of climate change and by the increasing international focus on human rights abuses.

This lecture will make two arguments. The first is that the lessons from the first period continue to be important for the design and development of corporate law. They have not been overtaken, but rather have been added to, by the analyses produced in the second period. The second lesson is that the post-financial crisis analyses raise a fundamental issue about the proper scope of company law and about its relationship with other bodies of law, such as regulation. The balance between corporate action and state action in addressing climate change and human rights abuses needs more serious assessment than it often receives. Unthinking reliance on corporate action is likely to end in disappointment. Nevertheless, corporate law has an important role in supporting state regulation and the lecture will seek to identify the most promising of the contributions company law could make to this end.

SPEAKER BIO

Paul Davies is currently a Senior Research Fellow at the Commercial Law Centre, Harris Manchester College, University of Oxford.

He was the Allen & Overy Professor of Corporate Law, University of Oxford, from 2009-2014; Cassel Professor of Commercial Law at the London School of Economics and Political Science, 1998-2009; and, before that, Professor of the Law of the Enterprise, University of Oxford.

He was elected a Fellow of the British Academy in 2000; appointed an honorary Queen’s Counsel in 2006 and elected an honorary Bencher of Gray’s Inn in 2007.

His main interests are in labour law, corporate law and banking law. He is the editor (with Sarah Worthington) of Gower’s Principles of Modern Company Law; author (with numerous others) of The Anatomy of Corporate Law and (with a different set of others) of Principles of Financial Regulation; and (on his own) of Introduction to Company Law. He also contributes to Palmer’s Company Law. (A list of recent publications is available at www.law.ox.ac.uk/people/paul-davies-qc-hon).

He was a member of the Steering Group whose reports led to the Companies Act 2006 (UK). He carried out a review for the UK Treasury which led to a reform in 2010 of the law on the liability of issuers for inaccurate statements to the market.

He is a Fellow and Research Member of the European Corporate Governance Institute (ecgi.global) and is an active member of the European Company Law Experts Group (europeancompanylawexperts.wordpress.com).

MODERATOR BIO

Professor Tan Cheng Han, SC was Dean of the NUS law school from 2001 to 2011, Chairman of the E W Barker Centre for Law and Business from 2012 to 2019, and Dean of the City University of Hong Kong School of Law from 2019 to 2022. Professor Tan’s present appointments include being Chairman of Singapore Exchange Regulation Pte Ltd, President of the Asian Law Schools Association, and a member of the Singapore Business Federation’s Board of Trustees and the Hong Kong Law Reform Committee. Recent publications include: Intermediaries in Commercial Law (Hart, 2022, with Paul S Davies (eds)); “Vicarious Liability in the Law of Agency” [2022] 2 Journal of Business Law 164; “Implied Terms in Undisclosed Agency” (2021) 84 Modern Law Review 532; “Mixed Ownership Reform and Corporate Governance in China’s State-owned Enterprises” (2020) 53 Vanderbilt Journal of Transnational Law 1055 (with Wang Jiangyu); and “Estoppel in the Law of Agency” (2020) 136 Law Quarterly Review 315.