Corporate Governance, Capital Markets, and Securities Law

Abstract

This chapter explores the interrelationships among corporate governance, capital markets, and securities law. More specifically, it considers the role that securities law should play in encouraging corporate governance standards that hold managers and directors accountable to shareholders. It also examines whether disclosure, bolstered by market forces, is sufficient to promote efficient corporate governance provisions. After charting the origins of the dividing line between securities law and corporate governance in the United States, the article looks at the efforts of the Securities and Exchange Commission to push against that boundary. It then analyses the institutional connections between capital markets and corporate governance, especially whether there are practical limits to the link between securities law and corporate governance. Finally, it discusses future prospects concerning the boundary between corporate governance and securities law.