Index A Alternative dispute resolution, 292 Annual reports board accountability and, 130, 131 conflict minerals and, 151 corporate sustainability reporting and, 148, 158 King III compliance and, 248 non-financial information and, 182 UK Corporate Governance Code and, 235, 237, 238 Apply and explain approach to corporate governance, 17, 19, 252, 254, 258 Apply or explain approach to corporate governance, 16, 19, 241, 243, 244, 250, 252 254 ASX Corporate Governance Principles and Recommendations Principle 3, 178 179 Recommendation 7.4, 147 148, 179 Australian Corporate Governance Principles and Recommendations, 42 43 Australian Securities and Investments Commission, 148 B Board accountability annual reports and, 130, 131 as critical element of good corporate governance, 117 118, 122 125, 139 stages of, 123 124 voluntary codes and, 123 Board accountability in transnational corporate governance codes, 11 analysis of, 125 135 assessment of, 125 139 definition of code, 125 Brazilian Code of Best Practice of Corporate Governance, 43 44 Brazil-Malawi bilateral investment treaty, 202 Business and human rights movement, 189 190 hard law, 203 205 hardening of initiatives, 198 205 history of, 195 196 soft law (see Soft law) soft to hard law continuum and, 194 198 Business and Human Rights Treaty. See UN Proposed Treaty on Business and Human Rights C CACG Principles for Corporate Governance, 11 Cadbury Report, 3, 33, 80, 81, 84 85, 91, 97, 99, 103, 106, 117 118, 125, 159, 245 Code of Best Practice, 4, 99, 102 debate arising from, 79 80 Check the box approach to corporate governance, 6, 16, 80, 120, 257 China Association for Public Companies, 285 Code of Corporate Governance of Public Corporations, 285 Guidelines for the Function of Board of Supervisors, 286 Guidelines for the Function of Representatives of Securities Affairs, 286 Guidelines for the Function of the Secretary of Board of Directors, 286 Springer International Publishing Switzerland 2017 J.J. du Plessis, C.K. Low (eds.), Corporate Governance Codes for the 21st Century, DOI 10.1007/978-3-319-51868-8 295
296 Index China Association for Public Companies (cont.) Guidelines for the Independent Directors for the Fulfillment of their Duties, 286 China Securities Regulation Commission, 286, 289, 293 Code of Corporate Governance of Listed Companies in China, 41 42, 285 Corporate Constitution Guidelines for Listed Companies, 280 City Code on Takeovers and Mergers (UK), 102 Climate change, 24 26 Code of Corporate Governance for Listed Companies in China, 41 42, 285 Code of Corporate Governance of Public Corporations (China), 285 Code of Governance Principles for South Africa, 134 Code on Responsible Investment in South Africa, 250 Commonwealth Association for Corporate Governance Principles for Corporate Governance in the Commonwealth, 119, 126, 132 135, 140 Companies Act 2006 (UK), 33 34, 181, 236 237 Companies Act 2008 (SA), 17, 244, 245, 250, 256, 258 Companies Act 2013 (India), 107 111 developments leading to, 108 109 Company delisting, voluntary, Germany. See Voluntary company delisting, Germany Company law, China articles of association, 279 bylaws, 281 282 corporate constitutions, 280 281 good corporate governance policy, 282 284 regulation of stock exchanges, 286 287 shareholder s agreement, 282 Company law, Germany Squeeze Out and, 218, 223, 224 Compliance management systems, Germany, 266 Comply or explain approach to corporate governance, 4 6, 16, 35, 81, 83, 85 86, 101 103, 105, 120 122, 128, 212, 234 237, 240 243, 245, 257, 277 Concentrated shareholding, India, 106 Confederation of Indian Industry, 99, 100 Conflict Free Tin Initiative, 170 Conflict Free Smelter Program, 170 Conflict Free Sourcing Initiative, 170 Conflict minerals, 169 annual reports and, 171 contracts theory and, 13 corporate social responsibility and, 180 Dodd-Frank Conflict Minerals Rule (see Dodd-Frank Conflict Minerals Rule) mandatory disclosure on, 183 184 multinational businesses and, 170 Corporate Constitution Guidelines for Listed Companies (China), 280 Corporate governance apply and explain approach, 17, 19, 252, 254, 258 apply or explain approach, 16, 19, 241, 243, 244, 250, 252 254 board accountability and, 117 118 business as usual approach, 27 check the box approach, 6, 16, 80, 120, 257 company delisting and, 210 comply or explain approach, 4 6, 16, 35, 81, 83, 85 86, 101 103, 105, 120 122, 128, 212, 234 237, 240 243, 245, 257, 277 definition, 3, 79 globalisation of (see Globalisation of corporate governance) hard-law and (see Hard law) if not, why not approach, 120, 212 India (see Corporate governance, India) link to regulation, 233 necessary reform of, 48 51 non-financial reporting, 31 role of mass media, 292 self-regulatory approach, 4, 6, 9 soft law and (see Soft law) Corporate governance, China codes, 285 286 policy, 282 284 Corporate governance codes, 23, 119 122, 284. See also specific codes areas addressed by, 122 corporate social responsibility language and, 24 externalisation of environmental and social business impacts, 38 39 hard law and (see Hard law)
Index 297 movement from soft to hard law and, 24 national, 11 promotion of Anglo-Saxon concepts, 35 36 role of, 79 soft law and (see Soft law) superficial attempts at integrating corporate social responsibility, 39 48 transnational, board accountability in (see Board accountability in transnational corporate governance codes) triple failure of, 7 8, 24, 32 48 types of, 118 voluntary (see Voluntary corporate governance codes) Corporate governance, Germany corporate social responsibility and, 262 delisting and, 223 227 Corporate governance, India Clause 49, Listing Agreement, 99 100 Companies Act 2013, 107 111 compliance rates, 106 107 Corporate Governance Voluntary Guidelines, 108 109 Desirable Corporate Governance code, 99 evolution of, 99 101 experiment with voluntary code, 99 101 hard law and 10, 98 jettisoning of soft law approach, 98 milder mandatory approach, advocacy for, 98, 111 Satyam corporate governance scandal, 100, 108 109 suitability of mandatory approach for, 101 107 ultra-mandatory approach, 10 11, 98, 108, 111 Corporate governance law, United States. See Delaware law Corporate governance, South Africa, 243 244. See also King Reports apply and explain approach, 17, 19, 252, 254 apply or explain approach, 16, 19, 243 245, 252 255 Code on Responsible Investment in South Africa, 250 success of, 17 Corporate Governance Voluntary Guidelines (India), 108 109 Corporate human rights obligations. See Business and human rights movement Corporate law Japan, 289 290 move to greater shareholder orientation, 13 Corporate social responsibility conflict minerals and, 180, 184 Directive 2014/95/EU and, 18, 262, 268 269, 271 integration into corporate governance codes, 39 48 language, corporate governance codes and, 24 reporting performance, companies with, 155 156 responsible sourcing and, 179, 183 South Africa, 251 Corporate social responsibility, Germany, 262, 266 267 approach to, 267 269 German Accounting Standard No. 20, 268 law enforcement, 269 270 Ministry of Justice concept for implementation of, 267 268 non-financial reporting, 268 Corporate sustainability, 8, 49 51 accountability and, 153 best practice regulatory structure design, 159 162 commercially based, 152 153 definition, 28 29 disclosure rules (see Corporate sustainability disclosure rules) for the interest of the enterprise, 17, 263 265 Germany, 264, 269 legitimacy and, 153 reporting (see Corporate sustainability reporting) shareholder primacy barrier, 29 32 Corporate sustainability disclosure rules best practice sustainability regulatory structure, 159 162 mandatory regimes, 153 159 purposes and intended audience, 151 153 Corporate sustainability reporting, 12 ad hoc environment, issues arising from, 153 155 annual reports, 148, 158 Directive 2014/95/EU and, 147 integrated reports, 150 151 key performance indicators and, 161, 163 management discussion and analysis, 148 149 mandatory (see Mandatory corporate sustainability reporting) mix of hard and soft law, 146 148 positive effects across financial markets, 155
298 Index Corporate sustainability reporting (cont.) relationship to future financial performance, 155 societal legitimacy and, 153 specialist reports, 149 150 websites, 151 Courts importance of explanation in, 63 65 incoherence and, 68 legitimacy, 63 64, 66 68 political context of decisions, 64 written opinions (see Written opinions) D Delaware courts, 60 61 clarity and, 71 72 directors duties in takeovers, 70 doctrine of good faith and, 70 duty of care and, 69 duty of loyalty and, 69 70 implications for, 8 9 incoherence and, 68 73 judicial expertise in, 8, 61 62 legitimacy, 8 Delaware law, 59 60 judicial enforcement of (see Delaware courts) softness of, 8, 58 62 Democratic Republic of Congo, 169 170, 172 173, 177 Desirable Corporate Governance code, India, 99 Deutsches Aktieninstitut, 213 Directive 2014/95/EU, 81, 275, 278, 288 corporate social responsibility and, 18, 262, 268 269, 271 corporate sustainability reporting and, 147 disclosure of non-financial and diversity information, 18, 182, 263, 264 German implementation requirements, 17 18 Dispersed shareholding, 106 Dodd-Frank Act 2010, 5, 13, 171, 184 185 Dodd-Frank Conflict Minerals Rule, 172 175, 185 cost of mandatory disclosure under, 176 necessity of, 180 184 suitability to corporate law, 177 179 unintended consequences of, 176 177 Düsseldorf Stock Exchange, 227 Dutch Corporate Governance Code, 46 47 E Electronic Industry Citizenship Coalition, 170 EU Directive 2014/95/EU. See Directive 2014/ 95/EU EU Green Paper on Corporate Social Responsibility, 77 Extractive Industries Transparency Initiative, 170 F Financial Conduct Authority Disclosure and Transparency Rules, 236 Listing Rules, 235 236 Financial Reporting Council (UK), 79, 80, 242 Financial Reporting Review Panel, 82 Stewardship Code, 86, 120 Financial Services Authority (UK), 82 Frankfurt Stock Exchange, 15, 210, 213, 226 227 G G20/OECD Principles of Corporate Governance, 11, 118, 121, 140, 290 board accountability and, 126 129 promotion of Anglo-Saxon concepts by, 35 shareholder primacy and, 34 35, 38 39 German Accounting Standard No. 20, 268 German Corporate Governance Code, 212, 261 Art. 1(2), 264 Art. 4.1.1, 264 German Sustainability Code, 269 GlaxoSmithKline LLC, 283 Global Compact. See UN Global Compact Global Corporate Governance Forum, 126 Global Financial Crisis (GFC), 5, 19 Global Reporting Initiative, 12, 28, 149, 270 G4 guidelines, 149 150 Globalisation, 265 Globalisation of corporate governance, 275 domestic endorsement of global standards, 289 290 hard law, 287 289 UN as preferred promoter of hard law globalisation, 290 291 Guidelines for the Conduct of the Controlling Shareholders and de facto Controllers of Listed Companies (China), 287 Guidelines for the Disclosure of Environmental Information in Listed Corporations (China), 287
Index 299 Guidelines for the Filing and Training of Independent Directors in Listed Corporations (China), 287 Guidelines for the Function of Board of Supervisors (China), 286 Guidelines for the Function of Representatives of Securities Affairs (China), 286 Guidelines for the Function of the Secretary of Board of Directors (China), 286 Guidelines for the Independent Directors for the Fulfillment of their Duties (China), 286 Guidelines for the Internal Control of Listed Corporations (China), 287 Guidelines for the System on Management of Disclosure Affairs in Listed Corporations (China), 287 H Hampel Report, 129 Hard law, 7, 9, 18, 88, 212, 291 business and human rights, 203 205 commonalities and interactions with soft law, 277 278 company delisting and, 15 16 corporate sustainability reporting and, 147 globalisation of 287 289 identification of, 276 Indian corporate governance and (see Corporate governance, India) non-identical role to soft law, 276 277 reform of corporate governance codes, 8 struggle between soft law, 265 267 Human rights and business. See Business and human rights movement I ICGLR Regional Certification Mechanism, 170 If not, why not approach to corporate governance, 120, 212 ILO Declaration on Fundamental Principles and Rights at Work, 182 ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Soft Policy, 191, 195, 197 Implementation Rules on the Electronic Voting on the General Meeting of Shareholders in Listed Corporations (China), 287 India, corporate governance in. See Corporate governance, India Institute of Chartered Accountants in England and Wales, 79, 80 Institute of Directors in South Africa, 246, 252 Code of Governance Principles for South Africa, 134 Governance Assessment Instrument, 253 Institute of Public Auditors (Germany) Principles for Proper Performance of Reasonable Assurance Engagements Relating to Compliance Management Systems IDW PS 980, 266 Institutional investors, 86 87, 103, 105, 243 244, 250 Integrated reporting, 150 151 Integrated Reporting Initiative, 28 Intergovernmental Panel on Climate Change, 24 25 Internal affairs doctrine, 58 International Corporate Governance Network, 11, 47 48, 118 Statement on Global Corporate Governance Principles, 130 132, 134, 135, 137 138, 140 International Integrated Reporting Council, 12, 150 151 International Monetary Fund, 118, 200 Investor protection, Germany, 226 227 J Johannesburg Stock Exchange, 16, 243, 245, 250, 258 Listing Requirements, 16, 244, 252, 255 Socially Responsible Investment Index, 244 K Kay Review, 87, 182 King I Report, 243, 245 King II Report, 243, 245, 251 King III Report, 243, 252 apply or explain approach, 16, 19, 241, 243, 244, 250, 252 254 inclusive stakeholder approach, 250 integrated reporting, 256 257 Practice Notes, 253, 258 studies on effectiveness of, 246 252 King IV Report, 17, 19, 245 246 apply and explain approach, 17, 19, 252, 254, 258 King Code of Governance for South Africa (King III), 44 46
300 Index King Code of Governance for South Africa (King III) (cont.) compliance, annual reports and, 248 Practice Notes, 16, 248 King Committee, 245 L Listing rules, Germany, 212 213 London Stock Exchange, 79, 80 M Management discussion and analysis, 148 149 Mandatory corporate sustainability reporting, 12 company conduct and culture and, 157 158 conflict minerals and, 183 Harvard Business School study 2012, 13 14, 183, 185 statutory provisions and, 160 162 Market failure, 292 Markets in Financial Instruments Directive (Germany), 214 Minority shareholders Germany, Squeeze Out and, 218, 223, 224 India, 105 106 UK Corporate Governance Code and, 84 Model Rules on the Function of the Board of Directors in Listed Corporations (China), 287 Modern Slavery Act 2015 (UK), 14, 204 206 Multinational corporations. See also Transnational corporations business and human rights movement and, 195 Myners Report, 86 87 N National Equities Exchange and Quotation System (China), 287 New York Stock Exchange Intercontinental Exchange Listing Rule 303A.01, 160 Non-financial reporting, 18, 31, 182, 268 Non-governmental organisations, 9, 14, 27, 79, 183, 186, 202, 205, 269, 290 Norwegian Code of Practice for Corporate Governance, 40 41 O OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas, 170 171 OECD Guidelines for Multinational Enterprises, 28, 50, 170, 182, 195, 270 National Contact Points, 197 OECD Principles of Corporate Governance, 4 5, 118, 126, 133, 136, 137. See also G20/OECD Principles of Corporate Governance Operating and financial review, 148 P Pension funds, 31, 87 Predatory shareholders, 15, 225 Principles for Corporate Governance in the Commonwealth, 119, 126, 140 board accountability and, 132 135 Principles for Proper Performance of Reasonable Assurance Engagements Relating to Compliance Management Systems IDW PS 980 (Germany), 266 Protect, Respect and Remedy Framework report, 182, 196, 200 Public interest litigation, China, 292 Public Investment Commission (South Africa), 243 R Regulation of voluntary corporate delisting, Germany, 210 211 competition of listing rules and, 226 227 conditions of revocation of listing authorisation, 220 cumulative average abnormal return, 216 217 empirical facts relating to, 213 217 evaluation of new provision in context of corporate governance, 223 227 illiquidity of shares based cash settlement, 222 legal protection, 222 223 market price based cash settlement, 220 221 price manipulation and misinformation based cash settlement, 221 222
Index 301 reasons for, 213 219 scope of application of new provision, 219 220 weighing of interests, 217 219 Remuneration, connection to success of the company, 34 Report of the Committee on the Financial Aspects of Corporate Governance. See Cadbury Report Ruggie, John, 190, 197 Protect, Respect and Remedy Framework report, 182, 196, 200 S Sarbanes-Oxley Act 2002, 5, 81, 101, 110, 178 Securities and Exchange Board of India, 11, 99 100, 111 Listing Obligations and Disclosure Requirements Regulations 2015, 101 Securities and Exchange Commission Final Rule, 13, 173 175 Self-regulation, UK Corporate Governance Code business elites and, 83, 91 institutionalism and regulation, 82 84 notions of ownership, board structures and control, 84 political economy, 85 86, 88 problematic reliance on informal institutions, 83 protection of minority shareholders, 84 recommendations to address comply or explain shortcomings, 240 243 representation of corporate governance in, 85 86 shareholder value and stewardship, 86 88 transnational domain and transnational corporations, 88 92 Shanghai Stock Exchange, 286, 287 Guidelines for the Conduct of the Controlling Shareholders and de facto Controllers of Listed Companies, 287 Guidelines for the Disclosure of Environmental Information in Listed Corporations, 287 Guidelines for the Filing and Training of Independent Directors in Listed Corporations, 287 Guidelines for the Internal Control of Listed Corporations, 287 Guidelines for the System on Management of Disclosure Affairs in Listed Corporations, 287 Implementation Rules on the Electronic Voting on the General Meeting of Shareholders in Listed Corporations, 287 Model Rules on the Function of the Board of Directors in Listed Corporations, 287 Shareholder activism, 105, 292 Shareholder primacy drive, 7, 24 as barrier to corporate sustainability, 29 32 G20/ OECD Principles of Corporate Governance and, 34 35, 38 39 triple failure of corporate governance codes and, 33 48 Shareholder value company law and, 30 enlightened approach, 179 Shareholder wealth maximisation, short-term movement away from, 13 Shareholder s agreement, China, 282 Shareholders, Germany, delisting and, 218 219 shareholders meeting and corporate governance, 223 226 Shenzhen Stock Exchange, 286, 287 Guidelines for the Tender Offer of Listed Corporations, 286 287 Soft law, 8 10, 77, 82, 97, 119, 191 192, 212, 234, 291 advantages of 192 193 business and human rights and, 190 191 commonalities and interactions with hard law, 277 278 company delisting, Germany, and, 15, 210 corporate human rights obligations and, 14 corporate sustainability reporting and, 147 148 Delaware law and, 58 62 as governance, 199 200 versus hard law, 193 194 identification of, 276 Indian corporate governance and, 98, 111 non-identical role to hard law, 276 277 softness of, 278 279 struggle between hard law, 265 267 Soft law to hard law, 193 business and human rights movement, 194 195 corporate governance codes and, 24 corporate human rights obligations and, 14 oscillation, German voluntary company delisting, 210 213 Solventis Wertpapierhandelsbank, 214 215, 217 South African Chamber for Business, 245
302 Index Squeeze Out, 218, 223, 224 State Economy and Trade Commission (China), 285 Statement on Global Corporate Governance Principles, 134, 135, 137 138, 140 board accountability and, 130 132 Stern Review, 25 Stewardship, 86 87 Stewardship Code, (UK), 86, 120 Stock Exchange Act (Germany), 15, 209, 210, 212 Stock exchange regulation, 291 292 China, 286 287 Sustainability disclosures. See Corporate sustainability disclosure rules Sustainable Companies Project (2010 2014), 7, 29, 48 T Takeover Directive (Netherlands), 36 37 Takeover Panel (UK), 82 Transnational corporations, 9. See also Multinational corporations UK Corporate Governance Code and, 88 90 U UK Combined Code, 117, 125, 237 238 UK Corporate Governance Code, 6, 125, 128, 137, 199 annual reports and, 235, 237, 238 change and, 80 81 comply or explain approach, 4, 16, 78, 81, 91, 102 103, 199, 234 243, 257 effectiveness studies, 237 239 focus on shareholder interests, 34 major criticisms of, 78 as model for spread of self-regulation, 79 opt out, listed companies and, 234 recommendations to address shortcomings of comply or explain approach, 240 243 review of operation of, 85 role of shareholders in, 86 self-regulation and (see Self-regulation, UK Corporate Governance Code) UN Convention Against Corruption, 290 Framework Convention on Climate Change, Paris Agreement, 26 Global Compact, 28, 77, 190, 195 198, 202, 269, 270 Guidance in Good Practices in Corporate Governance Disclosure, 133 Guiding Principles on Business and Human Rights, 14, 28, 170, 182, 196 198, 200 203 International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families, 203 Millennium Development Goals, 25 Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, 195, 198 as preferred promoter of hard law globalisation, 290 291 Proposed Treaty on Business and Human Rights, 14, 189 Protect, Respect and Remedy Framework, 182, 196 Sustainable Development Goals, 25 US corporate governance law. See Delaware law US Supreme Court Lochner era decisions, 66, 67 V Viènot Report, 137 Voluntary company delisting, Germany, 15 comparison to change in legal form, 224 225 comparison to Squeeze Out, 224 German Corporate Governance Code and, 212 historical development, 210 213 lock wait, 211, 227 regulation of (see Regulation of voluntary corporate delisting, Germany) shareholders meeting and, 210 soft law approach, 210 Voluntary corporate governance codes, 10, 20, 57 board accountability and, 123 companies with concentrated shareholding and, 84 dispersed shareholding and, 106 Indian experimentation with, 99 101 prerequisites for, 102 104 specific aims, 11 W World Bank, 90, 117, 118, 200 Written opinions, 64 65 incoherent phraseology and, 67 68 poor, legitimacy and, 66 68 vagueness and, 67