Towards a Constitutional Theory of Corporate Governance

Matthias Benz and Bruno Frey

No 304, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: The idea that there is a uniformly �optimal� governance structure for corporations features prominently in current debates and policy proposals. In this paper, we propose a different, constitutional theory of corporate governance: the criterion for a good corporate governance structure is whether it is freely chosen by the shareholders. We illustrate our approach 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.

Keywords: Corporate; Governance; Constitutional; law (search for similar items in EconPapers)
Date: 2006-09
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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:304

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