Trial lecture - time and place
Adjudication committee
- Professor Ola Mestad, University of Oslo (leader)
- Professor Dirk Andreas Zetzsche, University of Luxembourg (1. opponent)
- Dr Georgina Tsagas, University of Bristol (2. opponent)
Chair of defence
Head of Department John Asland
Supervisors
- Professor Beate Sjåfjell
- Professor II Jay Cullen
Summary
The subject of this dissertation is the divergence between the perception of corporate groups in law and in practice. Groups are perceived in corporate law as being a collection of separate entities. Corporate groups are, however, in practice made up of an interconnected economic system, tied together by internal governance mechanisms. Analyzing and comparing law with practice brings an awareness of the practices that potentially fall outside of the scope of regulation; the shadow business practices. I define shadow business as being unregulated corporate practices that provide corporate groups with an opportunity to carefully select business structures, and through this the regulations they will be subjected to. Corporate groups can therefore evade regulations where specific modes of control are applied, leaving a democratic concern that only parts of a group structure are subject to legislation.
Commercial corporate groups have, since the 1930s, been the dominant economic business structure. Its nature has, even so, been subject to very little comprehensive analysis. Corporate law literature primarily addresses corporate groups in sequences, and in relation to the role of shareholders or the corporate board in affiliated entities. This dissertation aims to fill this gap in the corporate law literature by analyzing how multinational groups can apply different modes of control, and by going far beyond the simplistic understanding of corporate groups as a collection of separate entities tied together by shareholding. Regulation that is not based on a clear perception of modern corporate group structures may increasingly target only parts of a corporate structure and so pave the way for the blossoming of shadow business outside of regulation. This dissertation analyses the interrelation between company and securities law at the EU level by questioning whether the legislative aims addressed in a securities market directive can be fulfilled, without a harmonised company law concept of de facto corporate control.
The hypothesis examined in this dissertation is that the current regulatory framework for control-disclosure in the EU falls short in its capacity to penetrate the corporate opacity of shadow business practices. An explanation for this can be found in the divergence between the formalistic and functional perception of the multifaceted corporate group, creative and new modes of control therefore being left outside of current regulation. Bridging the gap between law and practice is challenging if we continue applying the corporate law perception of groups as a mere collection of separate entities. I argue that we are in need of a theoretical framework that supports a definition of groups as an integrated ‘going concern’ if the economic reality of groups’ are to be subjected to regulation.