Rising Powers and Interdependent Futures

At a workshop on Law and Finance in Rising Powers, held at the Centre for Business Research, University of Cambridge, Gregory James, Senior Lecturer in Economics at Loughborough University, and Mathias Siems, Professor of Commercial Law at Durham University, presented work on shareholder rights in developed and developing countries. In a podcast interview following the presentation, they summarize their findings.

James said: “We looked at 30 Countries, both developed and developing economies, and the convergence of legal rights in these economies. Does convergence in company law lead to some convergence in legal systems, towards best practice?

“Interestingly, we found that in countries where you wouldn’t really expect it like Russia and China shareholder protection is good, at least on the books, compared to somewhere like Germany.

“We are using the CBR shareholder protection index and other research methods, and the interesting finding we have from the legal data was that all the countries were keen on improvement for shareholder protection. There seems to be a global trend in terms of fads and fashions for global rules protecting shareholders – that is interesting from a political economy perspective. We also found that while similar legal rules may flow across borders the operation of those rules is often quite different in practice. “

Siems said: “Rather than shareholder protection always being a good thing, it could be the other way round, it could be that legal systems that are less protective maybe advantageous – because you don’t need to be bothered by too much red tape. We could ask, do we really need to protect shareholders to the maximum? Is shareholder protection always good or may it be counter-productive in some circumstances?

“We don’t have a global law maker, we don’t have the UN regulating corporate governance or company law so we have to look to country level. Do we need global rules or will we see national standards becoming more uniform?”

Listen to the full interview with Gregory James and Mathias Siems

More podcasts from the workshop on Law and Finance in Rising Powers,
Centre for Business Research, University of Cambridge, December 9th 2014