Although the federal securities laws generally have been considered full-disclosure statutes, the United States Securities and Exchange Commission (SEC or the Commission) has been interested in regulating the corporate governance of public corporations to the extent it has any authority to do so. The Securities Exchange Act of 1934 (Exchange Act) established the SEC to administer both the Exchange Act and the earlier Securities Act of 1933 (Securities Act). At that time, responsibility for regulating internal corporate affairs was left generally to state corporation law, state blue sky statutes, and stock-exchange-listing requirements. Further, the SEC did not attempt to regulate the
corporate governance of foreign4 corporations, even if issuers entered the SEC reporting-and-disclosure system. The Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) markedly changed the boundary between federal securities law and state corporation law with regard to corporate governance, not only for United States (U.S.) corporations, but also for foreign corporations.

I am delighted to bring my experiences in the Democratic Republic of the Congo to a discussion of comparative corporate governance. My first job after I graduated from law school was at the Securities and Exchange Commission (SEC). Although I soon left that job, I never lost interest in the relationship between corporations and the larger culture. After living in the Congo for two years, I have developed a richer appreciation of the relationships between corporate governance and development based on observations of the policies and practices of businesses in sub-Saharan central Africa.

In this Article, I seek to cross disciplines, to bring the richness of political-science critiques of multinational corporations to legal analyses of corporate responsibility, focusing on sub-Saharan Africa. Teemu Ruskola, another participant at this conference, pointed out in an earlier article that recent work in comparative law has begun to break its isolation from other disciplines. This Article uses scholarship from both inside and outside the law to provide additional perspectives on comparative corporate governance.

Much of the study of comparative corporate governance focuses on differences between the approaches of different nations—e.g., two-tier versus single-tier boards, codetermination versus election of directors solely by the shareholders, shareholder primacy norm versus stakeholder models, and especially in the last few years, wide dispersal of stock holdings versus dominance by large block holders. This Article, however, focuses on a similarity: Around the world, the legal norm is that corporations are managed by, or under the direction of, a board of directors.

The connection between Dr. Seuss’ rhyming stories and the new initiatives by Canadian regulators and lawmakers to implement changes to Canada’s securities law (S-Ox North) reproducing the Sarbanes-Oxley Act’s changes in the United States’ legal regime is not immediately obvious. However there may be one. It often seemed that Dr. Seuss put one word after the other because of its rhyming qualities rather than its contribution to the creation of a coherent story. In the case of S-Ox North, Canadian regulators seem to be more concerned with harmonizing Canada’s securities markets rather than with addressing actual dangers facing market participants. One unanswered question is whether the S-Ox North changes address Canada’s capital structure where, in contrast to the United States, the issuers are predominantly
corporations in which a single shareholder or shareholder group has legal or factual control of the voting shares. Would it have made more sense to look at the recent corporate governance initiatives in the European Union, where the corporations’ capital structure more closely resembles that of Canada? Thus, it remains to be seen whether putting the Canadian corporate fox in S-Ox North is an exercise in rhyming or a coherent change for the better.

The role of financial regulation in influencing the development of corporate governance principles in the United Kingdom (UK) and throughout Europe has become an important policy issue that has received little attention in the literature. To date, most research on corporate governance has addressed issues affecting companies and firms in the nonfinancial sector. Corporate governance regulation in the financial sector traditionally has been regarded as a specialty area with standards and rules fashioned to achieve the overriding objectives of financial regulation—safety and soundness of the financial system, and consumer and investor protection. In the case of banking regulation, the traditional principal–agent model used to analyze the relationship between shareholders, directors, and managers has given way to
broader policy concerns to maintain financial stability and to ensure that banks operate in a way that promotes broader economic growth and enhances shareholder value.

Commercial speech is a relatively new member of the family of First Amendment protected speech. The United States Supreme Court first adopted the commercial speech doctrine in 1976 and ever since has had difficulty defining it. In its purest and most simple form, commercial speech is speech proposing a commercial transaction. Unlike content-based regulations, the majority of which must pass strict First Amendment scrutiny, regulations of commercial speech must pass only intermediate scrutiny under the First Amendment. The reason for this inferior level of protection is that commercial speech is low-value speech, meaning the importance of regulating it outweighs any benefit the speech may have to society.

Three years ago, Thomas Branco and his mother were driving home when a faulty transmission caused their car to stall. As Mr. Branco pushed the stalled car off the road, an out-of-control drunk driver collided into the car, crushing Mr. Branco into the trunk. He sustained severe injuries, but amazingly was still alert while en route to the hospital in an ambulance. Upon arrival, he informed the doctor that he would not agree to a blood transfusion because of his religious beliefs. A short time later, after surgery to amputate both of his legs, Mr. Branco died. A Florida trial court convicted the drunk driver of driving under the influence (DUI) manslaughter. On appeal, the defendant argued that Mr. Branco’s refusal of a blood transfusion was an intervening cause of death. The appellate court rejected this argument, reasoning that the defendant “caused life-threatening injuries” and the refusal of a blood transfusion did not “absolve [the defendant] from criminal liability.”