Economic Efficiency and the Proceduralisation of Company Law
This paper extends the analysis carried out by the authors for the UK Law Commissions and published as Part 3 of the Consultation Paper on Directors, Duties (September 1998). After considering some of the potential uses of economics in company law, the paper develops a theoretical framework which relates company law to a wider set of corporate governance mechanisms which operate to mitigate risk and uncertainty in contractual relations. This framework is then applied to provisions relating to self-dealing and conflicts of interests under Part X of the Companies Act 1985. It is argued that in this and related contexts, the economic role of company law should be seen as promoting cooperation and the sharing of information and risk between corporate actors, a function described in terms of the 'proceduralisation' of company law.
References listed on IDEAS
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- Simon Deakin & Stephen Pratten, 1999. "Competitiveness Policy and Economic Organisation: The Case of the British Film Industry," Working Papers wp127, Centre for Business Research, University of Cambridge.
- Easterbrook, Frank H & Fischel, Daniel R, 1993. "Contract and Fiduciary Duty," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 425-451, April.
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"Legal Restrictions on Private Contracts Can Enhance Efficiency,"
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Oxford University Press, vol. 6(2), pages 381-409, Fall.
- Aghion, P. & Hermalin, B., 1990. "Legal Restrictions on Private Contracts Can Enhance Efficiency," DELTA Working Papers 90-14, DELTA (Ecole normale supérieure).
- Coase, R H, 1996. "Law and Economics and A. W. Brian Simpson," The Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 103-119, January. Full references (including those not matched with items on IDEAS)
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