Has the Worldwide Convergence on the Anglo-American Style Shareholder Model of Corporate Law Yet been Assured?

Abstract

It has become increasingly mainstream for corporate law scholars to recognise that the world has dichotomised itself into two patterns of share ownership: dispersed ownership of shares and concentrated ownership of shares. In substance, the differences in ownership patterns beget different background systems of corporate governance. In general, the US and UK corporate governance system adopts the former which is more aligned with a shareholder-oriented model, whereas the corporate governance systems of most European and Asian countries adopt the latter which is more in alignment with a stakeholder-oriented model. Over time, the academic debate has revolved round the question of whether there can or will be global convergence on a single type of share ownership and resultant global convergence in corporate governance. This debate has simmered concomitantly with Hansmann and Kraakman‟s hypothesis put forward in their seminal scholarship of 2001 that it is only a matter of time that the emergent consensus on the supremacy of the shareholder-oriented model might propel judiciaries in countries with a non-shareholder-oriented model to make corresponding changes in their corporate laws towards a shareholder-model. Influenced by the above discussion, this article enquires into the soundness of their hypothesis. This article ultimately shows that the worldwide convergence is not necessarily a straightforward exercise in practice due not only to the persistent differences in the world‟s corporate ownership structures, also to several other reasons.