Domestic Corporations Research Articles

Liberating the Market for Corporate Control

Many years ago, Henry Manne proposed a theory of the market for corporate control that provided a compelling argument for the existence of a vibrant hostile takeover market. He argued that “the control of corporations may constitute a valuable asset” if the acquirer takes control with the expectation of correcting managerial inefficiencies. In this way, it is the hostile takeover market and its lead actor, the hostile bidder, that acts as a corrective mechanism in corporate governance. Unfortunately, while a vibrant hostile takeover market did exist in the United States during the 1960s, 70s, and 80s, this has not been the case for many years. By contrast, the United Kingdom, despite having a broadly similar capital market environment and corporate governance system to the U.S., has gone down the path of allowing its hostile takeover market to flourish. Thus, the U.K. has been able to successfully retain the hostile takeover as a corrective mechanism in corporate governance. We find the current domestic state of affairs unacceptable. Without a vibrant hostile takeover market, a significant corrective mechanism has been lost. Therefore, with a view to correcting this inefficiency, we use as our primary authority the core principles identified in the U.K.’s regulatory legal framework, and especially its longstanding board passivity (or “non-frustration”) rule. More than any other element of the British framework, the board passivity rule has allowed for the creation of an enduring and successful hostile takeover market in the U.K. Accordingly, this Article recommends that domestic state corporate law statutes be amended to include a safe harbor for a hostile bidder when making an all-cash, all-shares tender offer that includes a guarantee of the same or higher price if a back-end or squeeze-out merger occurs. The use of the above safe harbor would effectively disallow a board’s use of the poison pill as a takeover defense unless a specific takeover defense, such as a poison pill, is provided for in the corporate charter. In this way, private ordering can always be used to trump the statutory safe harbor.

Problems of Formation of Compliance in Russia

The integration of Russian companies in the global economy requires compliance with the requirements of good corporate governance. There are included but not limited the compliance with established anti-corruption laws, norms and rules. Such mechanisms are developing quite intensively in Russia: the legal foundations are studied, the components of the compliance system are identified. The compliance is most widely developed in the banking sector and medicine. There are required procedures implemented poorly in domestic corporations due to the lack of mandatory legislative requirements. Domestic companies operating in international markets are guided by the laws of the respective countries, mainly the USA, Great Britain and France. Unified requirements for systems and mechanisms for verifying compliance with current standards are not developed in domestic practice, which contributes to a different interpretation of the existing provisions of the Central Bank and international rules. The study goal is to identify priority areas for the compliance development in Russia, bringing the domestic regulatory framework closer to world practice. The paper shows that Russian corporations use a large number of internal regulatory documents in their practice, many of which differ mainly by their names. Direct adherence to international standards is not possible due to differences in the requirements of domestic and foreign legislation. To accelerate the adaptation of domestic companies to the world practice of good corporate governance, it is necessary to develop national formats, the structure of a compliance system and a list of basic internal paperworks. There are shown the importance and development directions of the Russian national regulatory framework. These research materials may be useful to corporate governance specialists, reactionaries, and corporate executives.

Impairment of Assets and Corporation Risk

Importance. A large number of external and internal factors affect the economic activity of corporations. In particular, these factors give rise to risks that directly affect the valuation of assets in accounting and financial reporting.Objectives. The article explores the risks of loss of value of non-current and current assets, as well as the reasons for their occurrence, leading to a change in the corporation's equity.Methods. Research is based on methods of logic, analogy and statistical analysis, as well as methods for assessing the risk of loss in the value of non-current and current assets that have financial implications and affect the assessment and formation of accounting (financial) statements.Results. It is spoken in detail about recognition and adjustment of the value of assets subject to impairment, features of determining the amount of the impairment allowance for financial assets, inventories, and doubtful receivables. The author suggests introducing a methodology for testing long-term assets (fixed assets, intangible assets, other) for impairment in accordance with IAS 36 “Impairment of Assets” in the practical activities of domestic corporations. The study showed that timely risk assessment of impairment loss provides the identification of the causes of risk, allows you to assess losses and make management decisions. Experiencing possible difficulties in eliminating the influence of external risk factors, the corporation is able to influence internal factors by monitoring the facts of economic life and maintaining accounting records.Conclusions and Relevance. The formation of the amount of the impairment allowance and the testing of corporate assets for impairment ensures the reliability of the information in the financial statements. The adoption of management decisions in identifying risks involves the creation of a control environment by the corporation, the organization of internal control procedures and regular informing of personnel about the results. The development of corporate accounting and reporting standards that establish the powers of corporation units and personnel in identifying and analyzing risks will make it possible to organize risk information. Summarizing information about risks in internal reporting formats will allow disclosing indicators and explanations about risks in public accounting (financial) statements

Administration of Telecommunication Company Staff Potential in Ukraine

The goal of the article is to develop theoretical and methodological guideline and practical recommendations for administration of staff potential by telecommunication companies based on marketing management in the modern conditions. The methodological basis of the research are fundamentals of the modern socio-economic theory, management and marketing grounded on the system-synergistic approach to staff potential administration in domestic telecommunication companies and international corporations in Ukraine. Within the framework of this approach, general scientific and specific methods of cognition have been used, in particular: analysis and synthesis, scientific abstraction, deduction and induction, dialectical analysis, statistical analysis, economic and mathematical modeling. The scientific novelty of the research lies in the development of system-synergetic paradigm of marketing management in telecommunication companies, which provides optimal harmonization of goals of companies with various benefits of interested parties to create a social effect. Conclusions. Implementation of marketing management by domestic telecommunication companies and international corporations in Ukraine is favourable for creating reputation of a reliable supplier of products and services to consumers, popularization of an employer brand, maximum satisfaction of consumer requirements, formation of balanced management system with coordination of actions according to different dynamic cycles for simultaneous achievement of economic and organizational effectiveness and a social effect.

Network Ties and the Politics of Renationalization: Embeddedness, Political-Business Relations, and Renationalization in Post-Milosevic Serbia

Based on an original large-N data set of Serbian firms privatized between 2002 and 2011, and qualitative evidence, this article applies survival modeling to network data to analyze the political foundations of renationalization. I build on embeddedness scholarship and hypothesize that renationalization is influenced by varying patterns of embeddedness of firms in political and ownership networks. In contrast with expectations of the state capture literature, I find that politically connected firms are more likely to be renationalized than non-politicized ones, whereas firms owned by domestic corporate owners are less likely to be renationalized than those owned by non-corporate owners. I theorize my findings as the logic of extraction, showing that renationalization in politically connected firms happens either as an unintended consequence of extraction or of predation, and as the logic of reciprocity, which demonstrates that domestic corporate owners are more likely to avoid renationalization because they can offer favors to political parties.

A Meta-Analysis of Research on Perceived Job Stress of Domestic Corporate Employees

본 연구는 기업체 근로자가 인식하는 직무스트레스가 어떠한 변인과 관련이 있으며, 변인 간의 영향력의 차이는 어떠한지를 구명하는 것을 목적으로 한다. 이를 위해, 본 연구에서는 Comprehensive Meta Analysis 3.0 프로그램을 이용하여 메타분석을 실시하였으며, 분석을 위해 한국학술지인용색인(KCI)에 등재된 선행연구 52편이 활용되었다. 최종적으로 도출된 분석결과는 다음과 같다. 첫째, 직무스트레스와 관련이 있는 조직 특성 변인은 총 9개이며, 내면화행동을 제외한 모든 변인이 직무스트레스와 유의한 상관관계를 보인다. 둘째, 직무스트레스와 관련 있는 개인 및 관계 특성 변인은 총 8개이며, 음주행위를 제외한 모든 변인이 직무스트레스와 유의한 상관관계를 보인다. 셋째, 조직 특성 변인 중 직무스트레스와 가장 높은 평균 가중 상관계수를 보인 변인은 직무소진이며, 개인 특성 변인 중 직무스트레스와 가장 높은 평균 가중 상관계수를 보인 변인은 일-가정 갈등이다. 본 연구를 통해 후속연구를 위한 제언을 제시하면 다음과 같다. 첫째, 직무스트레스를 많이 받는 특정 근로자를 대상으로 메타분석이 시행되어야 한다. 둘째, 국내외 선행연구를 종합하여 직무스트레스와 관련 변인 간의 체계적 문헌고찰 및 메타분석이 시행되어야 한다. 셋째, 직무스트레스의 하위구인과 관련 변인 간의 메타분석이 시행되어야 한다. 넷째, 현업에서 조직 구성원의 직무스트레스에 대처할 때 그들의 인구통계학적 특성을 반영하여 접근해야 한다.

Majority Shareholder on the Composition of Public Ownership and Tax Avoidance Practices in Public Companies

This study attempts to analyze the effectiveness of the enforcement of regulations on public share ownership. Specifically, this study analyzes whether there are differences in the composition of public ownership between before and after the regulation was enacted. By using independent t-test, carried out on the Indonesia Stock Exchange during 2008-2011 with a total of 320 observations (company-years), regarding the effectiveness of regulations regarding the provision of tax incentives associated with the proportion of public share ownership, the difference is analyzed with the deadline for the enactment of government regulations on reduction of income tax rates for public entity taxpayers in the form of public company and the Minister of Finance Regulation regarding the procedure for implementing and monitoring the decreasing of granting tariffs for domestic corporate taxpayers in the form of public companies. The results indicate that the regulations were not proven to empirically have significant effect in increasing the proportion of public share ownership in the capital market, and are more likely to lead to trade-offs with government efforts to increase tax revenues and reduce the practice of tax avoidance by companies. Therefore, it is necessary to review the tax incentive scheme that can be given to companies going public in order to be effective in increasing public share ownership in Indonesia and not trade-off with the practice of corporate tax avoidance.

Formation of optimal capital structure of domestic corporations in times of crisis: Econometric analysis of determinants

Subject. The article addresses building the optimal capital structure in the face of financial globalization, taking into account the ever-changing factors of external economic and geopolitical environment, including the financial crisis. Objectives. The purpose is to perform empirical tests of hypotheses about the nature of corporate financial leverage dependence on traditional determinants during and after the financial crisis in Russia's emerging market. I used a large data set on 49 public companies in seven leading sectors of the Russian economy from 2011 to 2017. Methods. The study employs the correlation and regression analysis. Results. The results of correlation and regression analysis show that the application of traditional theories of capital structure in the current conditions of financial globalization in a developing country is ineffective for forming an optimal capital structure; macroeconomic factors have a significant impact on the formation of corporate capital structures, which is particularly reflected during and after the crisis; the financial crisis has a considerable impact on the capital structure of companies; the determinant of stock market development has a real impact on leverage and plays an important role in financial decision-making after the financial crisis. Conclusions. I revealed inverse relationship between the leverage and variable size of companies after financial crisis, which contradicts to the trade-off theory and corresponds to the pecking order theory. This supports the hypothesis that macroeconomic factors are crucial, but the variable of stock market development has increased essentially as compared to the pre-crisis period.

The rise of corporate retailing and the impacts on small‐scale retailing: the survival strategies of Kirana stores and informal street vendors in Durgapur, India

In many developing world economies in recent years, the state has been seen to encourage neoliberal economic expansion policies. This has involved both large‐scale foreign corporations and sometimes large‐scale domestic corporations. Many studies have discussed the new landscapes of economic hardship and the impacts on small businesses. The aim of this paper is to argue that the impacts on small traders are in fact more complex and varied than usually appears in the literature. The research was conducted in the industrial city of Durgapur in the Bardhaman district of West Bengal, India. First it is argued that the impact has been greatest on the ‘kirana’ owners, operating small convenience type stores with legalized trading arrangements and fixed premises. On the other hand, the street vendors (often unlicensed and having no fixed premises) seem not to be affected in terms of customer loss and indeed could be seen to be doing well against the backcloth of neoliberal expansion. In fact we argue that the growth in the number of street vendors provides as much of a threat to future livelihoods for traditional kirana owners as the growth of large corporations itself.

Leveraging Corporate Law: A Broader Account of Delaware's Competition

Delaware inhabits a competitive landscape that includes, but is not limited to, corporate law. Like other small jurisdictions active in cross-border corporate and financial services, Delaware has become widely associated with a particular area of specialization, providing de facto U.S. corporate law for large, publicly traded companies. However, the economic development imperatives prompting this have also led Delaware to explore opportunities in related though distinct fields that build upon this platform – effectively leveraging their corporate law advantage to expand and diversify the state's revenue streams. This article assesses Delaware's competitive position amidst this broader landscape. Part II provides an overview of prevailing accounts of U.S. corporate charter competition, which generally conclude that Delaware no longer faces substantial competition from other states; when the frame of reference is limited to domestic corporate charter competition, only federal preemption would appear to pose a substantial threat to Delaware's dominance. In response to these prevailing accounts, this part suggests that such a narrow view of the competitive landscape misses important dynamics that could affect Delaware's position moving forward. Minimally, these include the emergence of competitors abroad that challenge Delaware's corporate dominance on multiple fronts – both internationally and with respect to chartering of large companies based in the United States. Part III pushes the analysis further, however, by assessing Delaware's broader competitive landscape beyond corporate law, as such. This section reframes the matter by reference to underlying economic development imperatives, which are particularly pressing for smaller, resource-constrained jurisdictions like Delaware. It then examines Delaware's efforts to leverage corporate law – that is, to build on Delaware's corporate law advantage by expanding into related though distinct fields that build upon that preexisting platform, including aspects of financial services and insurance where chartering and innovative entity structures loom large. Part IV concludes, observing that this broader framing – including cross-border and extra- corporate dynamics – reveals a more complex competitive landscape than prevailing accounts can accommodate. Overall, Delaware faces real competition from a range of domestic and foreign jurisdictions that have grappled with similar economic development challenges through similar strategies, producing global competitive dynamics that may substantially impact Delaware's long-term prospects.

The Domestic Tethering of Lebanese and Arab Women Journalists and News Managers

ABSTRACT The study examined gender-based discrimination facing Arab women journalists and news managers, especially in their pursuit of leadership positions. It assessed how domestic pressures, gender norms, and corporate policies limit women journalists’ prospects for advancement and career longevity. It surveyed 308 journalists and news managers, both men and women, from various news outlets and examined their attitudes toward career trajectory, workplace practices, newsroom culture, and domestic responsibilities. The findings point to manifestations of simultaneous sticky floors and glass ceilings, where women face a pay gap and are tethered to their inequitable domestic responsibilities.

Brief of International Law Scholars as Amici Curiae in Support of Respondents, Nestle USA, Inc. & Cargill, Inc. v. Doe I

This amicus brief was filed with the U.S. Supreme Court on behalf of international law scholars in Nestle USA, Inc. v. Doe I and Cargill, Inc. v. Doe I, suits alleging that U.S. corporations participated in child slavery in Ivory Coast. The brief explains that customary international law permits corporate liability for human rights violations. Customary international law establishes human rights norms that prohibit certain conduct but does not provide the means of enforcing those norms. Enforcement is instead left to states, which may act collectively through treaties or separately by providing liability under domestic law. International criminal tribunals generally have been given jurisdiction only over natural persons because some nations do not hold corporations criminally liable. In concluding suppression conventions, like the Genocide Convention and the Torture Convention, nations have similarly limited their obligations to prosecute or extradite to natural persons. But limitations on particular enforcement mechanisms are not limitations on the underlying norms themselves. This is confirmed by the wide-spread practice of states providing both criminal and civil liability for human rights violations, including corporate violations, in their domestic laws. Customary international law therefore permits the United States to recognize a cause of action against domestic corporations under the Alien Tort Statute (ATS) for violations of human rights norms as long as the norm at issue applies to corporations and the United States has jurisdiction to prescribe. There is no doubt that customary international law prohibits slavery and that this norm applies to juridical persons. The United States has jurisdiction to prescribe based on the U.S. nationality of the defendants and on the character of slavery as a universal jurisdiction offense.

Международный опыт налогообложения криптоактивов

The subject of this article is the tax regulation of crypto-assets as a new class of financial assets. The relevance of the topic is due to the growing use of crypto-assets in the financial systems around the world in the absence of a unified interpretation and regulation of digital assets in the monetary and tax spheres. The aim of the study is to identify economic and legal approaches to the interpretation of crypto-assets and to determine the features of taxation of crypto-assets in Australia, United Kingdom, Singapore, Switzerland the USA and Japan. The study revealed the features of direct and indirect taxation of crypto-assets in developed countries. The study used methods of comparative analysis and synthesis. We studied the tax consequences of typical crypto-assets transactions such as: mining crypto-assets; acquisition of crypto-assets; the use of crypto-assets for payments of goods, works and services; implementation of crypto-assets acquired for investment purposes and etc.It is concluded that in the analyzed countries the interpretations of virtual currencies differ not only at the national level, but also at the level of regulatory authorities. The study did not establish correlation between taxation of crypto-assets and regulation of digital assets in the monetary systems . In most countries crypto-assets related incomes are taxable by corporate taxes and the burden of taxation is defined by domestic corporate taxation approach. At the same time in some countries the income of individuals is completely exempt from taxation. The authors concluded that tax incentives can help reduce speculative pressure and stimulate the wider use of crypto-assets by both institutional and private investors as a means of payment, means of savings and investment. The results of the study can be used by national regulatory authorities to create the optimal tax regime for crypto-assets transactions. The optimal tax regime for crypto-assets transactions should be aimed not maximizing budget revenues but the creation of favorable conditions for stimulating innovation in the field of digital assets both the national and international levels.

Tax regulation of virtual currencies circulation: Foreign countries experience and prospects for Russia

«Вестник Санкт-Петербургского университета. Экономика» — научно-теоретический рецензируемый журнал, обобщающий результаты исследований ученых всего мира в различных областях науки, включая мировую экономику, историю развития экономики и экономической мысли, финансы, кредит и страхование, теорию и практику управления, статистику и учет, экономико-математическое моделирование.

ЭКОЛОГИЧЕСКАЯ ОТВЕТСТВЕННОСТЬ В СОВРЕМЕННОЙ ПРАКТИКЕ КОРПОРАТИВНОГО УПРАВЛЕНИЯ РОССИЙСКИХ КОМПАНИЙ

The article is devoted to environmental responsibility issues in the modern corporate governance practice of the largest Russian corporations, which are leaders in the domestic corporate charity rating. The content, directions and main functions of corporate environmental responsibility are determined. Based on reports on the sustainable development of leading Russian companies, their goals in the field of environmental safety and environmental protection are considered, the main indicators of the impact on the environment are analyzed. Priority measures implemented in the field of environmental responsibility of companies are considered. The advantages and benefits for socially and environmentally responsible companies are identified.

Забезпечення якості аудиту в Європейському Союзі (досвід Угорщини)

The article explores the issues of confidence increase to the institution of European Union's external audit through systematic reforms aimed at ensuring the quality of audit services. The main directions of auditing reforms in the European Union are presented. The reform of the EU audit regulation has started in order to increase confidence in the integrity of the financial statements. In recent years, international and domestic corporate and audit scandals have emphasized the importance of auditing, so auditor independence and the quality of audit work have become a central issue again. On the one hand, companies and financial institutions went bankrupt, and on the other, the reputation of the audit profession and public confidence in the audit were shaken. During these years there were professional conferences, discussions, rethinking of laws and norms, which are generally needed to restore confidence in the institute of auditors.The assurance system of audit quality by the Chamber of Hungarian Auditors is based on its internal quality control rules. The tasks of ward control are to audit the quality assurance system of auditors, to control the quality of specific components of audits and audit findings. The quality and reliability of the audit services in Hungary for the period 2014-2018 are evaluated. External quality control is provided by a professional body of institutional regulation, whose reliable functioning ensures increasing confidence in the audit profession by maintaining uniform standards and quality of audit work that meets public expectations. The existence of three external quality control subsystems have been proven: a monitoring system, a peer review system and a mixed system, which is a combination of the last two.It’s found that the audit reform has broaden the role and powers of Audit Chambers, which are essential for effective implementation of the new audit rules.It is concluded that the audit quality control process has been reformed in Hungary in accordance with the requirements of the new directive and regulation of the European Union. Thus creating an audit control authority and transforming the foundations of the previous system have led to the improvement of the quality assurance system. According to the Chamber of Hungarian Auditors' data on quality assurance, the audit problem requires the implementation of a regulatory oversight package that will enhance the credibility and value of audit activity in Hungary and other EU Member States. The experience of audit quality assurance in developed countries can be implemented in the current realities of Ukraine's European integration process.

CSR and tax: a study in the transition from an ‘aggregate’ to ‘real entity’ view of corporations

Purpose The purpose of this paper is to empirically test whether corporates, via publicly disclosed sentiment and in response to government initiatives such as domestic corporate tax reform measures that address transparency, are beginning to view tax as a fourth dimension of corporate social responsibility (CSR). Design/methodology/approach To determine whether corporate attitudes towards tax are changing, representations about the corporate entity by a variety of stakeholders and through numerous channels were analysed using Leximancer software. These representations were in response to four distinct Australian domestic tax reform measures instituted during and subsequent to the Australian Government Senate Inquiry into corporate tax avoidance. The use of Leximancer, a data-analysis and mapping software that automates the coding of document text, delineates concepts and identifies themes, is well suited to the nature and size of the data used (Lodhia and Martin, 2011) and ensures the validity and reliability of the results (Dumay, 2014). Findings This paper provides evidence on the efficacy of global and domestic tax-reform measures that target tax avoidance through transparency. This is demonstrated by a progressive change in corporate attitudes towards tax and suggests a transition, albeit nascent, from the aggregate view to the real entity view of a corporation. As such, this study provides evidence of the inception of a corporate conscience when it comes to tax, whereby tax is instituted as a fourth dimension of CSR. Research limitations/implications Using a theoretical framework which adopts the historically accepted views of the firm, the authors argue that a shift from the aggregate view to the real entity view of a corporation will have the following implications: an expansion of the dimensional factors of CSR (economic, social, environmental and tax); a new standard or definition of corporate responsibility which encompasses both legal and moral considerations and has transparency at its core (Narotzki, 2016); and a new outlook where consumers realise that they have the power to influence and demand action from corporates. Originality/value This paper uses state-of-the-art software to empirically test the efficacy of global and domestic tax reform measures that target transparency, ultimately providing evidence supporting the adoption of these measures and the recognition of a new dimension of CSR, tax.

Alternative Approaches to Address the (Yet to Be Defined) Treaty Shopping Phenomenon

The present article intends to provide alternative solutions beyond the traditional countermeasures to counteract the treaty shopping phenomenon. It departs from the premise that the treaty shopping phenomenon has never been accurately defined, a fact that significantly conditions – and hinders – the process of conceiving measures to address it. Be that as it may, the paper briefly summarizes the key features of its three most paradigmatic countermeasures (beneficial ownership, limitation on benefits (LOBs) clauses and the principal purpose test) and further notes that the recently advocated international expansion of the latter two may not be appropriate (section 1). In this context, the paper advocates for four alternative approaches to neutralize treaty shopping. The first approach involves a reconsideration of domestic corporate tax residence tests, whose configuration ought to be regarded as the genuine ultimate root of treaty shopping concerns (section 2.1). The second and third involve a (re)interpretation and a minor amendment of Article 4.1 of tax treaties respectively (sections 2.2 and 2.3). The last one entails the adoption of a more targeted LOB clause (section 2.4). The first and fourth approaches rely on a specific (and personal) perception of the treaty shopping phenomenon (section 2.1).

Globalization, Lawyers, and Emerging Economies: The Rise, Transformation, and Significance of the New Corporate Legal Ecosystem in India, Brazil, and China

Beginning in the 1990s, India, Brazil, and China have each developed a distinct legal ecosystem, comprised of new (or newly repurposed) domestic corporate law firms, foreign law firms competing (on the ground or virtually) to serve both foreign and domestic clients, general counsel offices of both domestic and multinational companies, and law schools either designed or retooled to supply lawyers qualified to practice law. In this Article, we utilize data from an unprecedented set of empirical studies to document the rise of this new ecosystem in these three important emerging economies, and to develop grounded theory about the forces that have produced this transformation, and that help to explain differences among the three jurisdictions. Specifically, we argue that differences in what we call the gearing in the relative importance of the three key elements in the legal ecosystems that have developed in India, Brazil, and China – law firms, clients, and legal education – can be explained, in part, by differences in what we will call the macro-level gearing in the relative power of the state, the market, and the – both between all three countries and the United States, and among the three jurisdictions. This difference has been most pronounced in China, where the dominance of the state gear in shaping the legal contrasts sharply with both the U.S. market driven model, and the influence of the bar in shaping the micro-level ecosystems in India and Brazil. We conclude by offering some tentative thoughts about the implications of our findings for a rapidly globalizing legal services in which a growing number of states are beginning to exert greater control at the macro-level.

Centros, California’s ‘Women on Boards’ Statute and the Scope of Regulatory Competition

In its 1999 Centros decision, the European Court of Justice affirmed that the EU right of establishment protects a corporation’s right to select a state of incorporation. Specifically, Centros rejected the argument that, under the real seat doctrine, the country in which the corporation’s head office is located may deny recognition or apply domestic corporate law to a corporation that is validly formed in another EU state. At the time, commentators broadly viewed Centros as opening the door to greater regulatory competition in Europe. Twenty years later, we examine Centros through the lens of SB 826—the California statute mandating a minimum number of women on boards. SB 826, like Centros, raises questions about the extent to which a forum state, as opposed to the state of incorporation, can impose its laws on corporations that operate within its borders. In the US, these questions are typically addressed by application of the internal affairs doctrine which provides that the law of the state of incorporation applies to the corporation’s internal affairs. Both SB 826 and Centros thus highlight the critical importance of the scope of the internal affairs doctrine. In this article, we stress the importance of the shareholder primacy norm to understanding the scope of US corporate law, which results in corporate law focusing primarily on matters of shareholder economic interest. We argue that the internal affairs doctrine should be understood within the context of the shareholder primacy norm and therefore directed to rules oriented to enhancing firm economic value. Considered in this context, SB 826 is distinctive in that it focuses on broader societal interests than traditional corporate law. In the same vein, EU corporate law has traditionally had a broader stakeholder orientation. We posit that the limited impact of the Centros decision, an impact which differed significantly from its predicted revolutionary effect, can be attributed to the greater focus of EU corporate law on social ordering and a more limited adherence to the shareholder primacy norm. Ironically, California’s adoption of SB 826 may portend a movement of the US towards Centros-style governance.