The Rise of International Corporate Law

51 Pages Posted: 17 Nov 2020 Last revised: 30 Nov 2020

See all articles by Mariana Pargendler

Mariana Pargendler

Fundação Getulio Vargas Law School at São Paulo; New York University School of Law; European Corporate Governance Institute

Date Written: November 11, 2020

Abstract

Comparative corporate governance has focused either on prevailing differences across legal systems, or on spontaneous legal transplants of foreign institutions in response to global competition. This essay argues that corporate law today is not only a product of the invisible hand of the market, but also of the soft (and not-so-soft) hands of international organizations and standard setters. By tracing the emergence of international corporate law (ICL) since the Asian crisis of the late 1990s, it shows how the IMF, the OECD, the World Bank, and the United Nations, among several other international players, have helped shape legal reforms and corporate governance developments around the world. The observed influence of ICL ranges from the impulse for independent directors and the control of related-party transactions, to the growth of ESG investment factors and human rights policies.

The rise of ICL responds to interjurisdictional externalities and nationalist bias of domestic regimes that have been largely neglected by prevailing theories, which failed to predict and notice the strong push for international coordination and standard setting in the field. ICL has also gone beyond merely prescribing an Anglo-Saxon model of corporate governance to also promote legal innovations that place the United States in the receiving end of international pressure. Legal implants from ICL, rather than legal transplants from a foreign jurisdiction, are an increasingly relevant force behind corporate governance change. While ICL has been influential, its efficacy and normative vision face challenges. The time has come to move beyond an exclusively comparative focus to also scrutinize the potential and limits of corporate lawmaking at the international level.

Keywords: international corporate law, international corporate governance, comparative corporate governance, legal implants

JEL Classification: K22, K33, O16

Suggested Citation

Pargendler, Mariana, The Rise of International Corporate Law (November 11, 2020). European Corporate Governance Institute - Law Working Paper, 555/2020, FGV Direito SP Research Paper Series n. Forthcoming, Available at SSRN: https://ssrn.com/abstract=3728650 or http://dx.doi.org/10.2139/ssrn.3728650

Mariana Pargendler (Contact Author)

Fundação Getulio Vargas Law School at São Paulo ( email )

R. Rocha, 233, Bela Vista
São Paulo, 01330-000
Brazil

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

European Corporate Governance Institute ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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