Governing Globalization? The State, Law, and Structural Change in Corporate Governance
| Published date | 01 December 2000 |
| Date | 01 December 2000 |
| Author | John W. Cioffi |
| DOI | http://doi.org/10.1111/1467-6478.00168 |
JOURNAL OF LAW AND SOCIETY
VOLUME 27, NUMBER 4, DECEMBER 2000
ISSN: 0263-323X, pp. 572–600
Governing Globalization? The State, Law, and Structural
Change in Corporate Governance
John W. Cioffi*
Current analysis of the ‘globalization’ of the activity of capitalist
corporations tends to argue that the legal institutional frameworks of the
nation state are of little importance in determining the governance of
those corporations, and that the regulation of those corporations
therefore is impossible. This view simply ignores the role that those
frameworks do in fact play. In this paper, various styles of corporate
governance are analysed in terms of the influence of the company law,
financial market regulation, and employment law promulgated by
nations or nation state groupings. Rather than the globalization of
corporate governance reflecting the unimportance of the nation state, it
reflects a change in the style of regulation.
INTRODUCTION
During the 1980s and gathering strength throughout the 1990s, the
development of the set of norms and policies identified with dominant
contemporary conceptions of ‘corporate governance’ has become an
increasingly important area of economic rhetoric, regulatory politics, and
institutional reform.
1
Driven by the alleged overpowering force exerted by
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1 See M. Roe, ‘From Antitrust to Corporate Governance? The Corporation and the
Law’ in The American Corporation Today, ed. C. Kaysen (1996).
* Berkeley Roundtable on the International Economy (BRIE), University of
California, Berkeley, 2234 Piedmont Ave., Berkeley, CA 94720, United
States of America
I am grateful for the intellectual support and substantive comments of Professors Robert
A. Kagan, Richard M. Buxbaum, Jonah Levy, and John Zysman, and to Professors Steven
Cohen, Nick Ziegler, David Soskice, and Jonas Pontusson for additional commentary on
earlier related work. I also gratefully acknowledge the generous financial support of the
National Science Foundation, the Berkeley Roundtable on the International Economy,
and the Institute for International Studies at U.C. Berkeley, along with additional
assistance of the Wissenschaftzentrum-Berlin fu
¨r Sozialforschung, without which this
research would have been impossible.
international capital markets, belief in which is an article of faith in the most
important policy making fora, the concept of ‘shareholder value’ has become
both talisman and agenda for the reform of economic governance and
corporate management alike.
2
Certainly, we no longer live in a world of
stable and predominantly self-contained national political economic systems
identified with the ‘golden age’ of post-war capitalism.
3
Just as assuredly,
however, we do not live in a world in which the state has withered away
under the relentless, intense competitive pressures of international markets
identified as globalization.
4
National distinctiveness and divergent
developmental paths remain facts of the political economic landscape, and
this applies to state institutions and corporate organizations alike.
Multinational corporations are thought to effect globalization through their
scale, reach, and investment, and restructuring decisions may be growing in
importance within national and international economies alike, but the nation
state remains the geographical and organizational base of the corporate
firm.
5
This article examines cross-national trends in the development of
corporate governance regimes in the United States of America, the United
Kingdom, Germany, France, and Japan by analysing patterns of change in
law and regulatory institutions. The laws propounded by the state formally
constitute corporate governance institutions that mediate the opposing
interests and the power relations within the corporation. It is this continued
and close relationship between the nation state, law, and the corporate firm
under conditions of globalization that concerns us here.
6
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2 See, generally, I. Millstein, OECD Business Sector Advisory Group on Corporate
Governance, Corporate Governance: Improving Competitiveness and Access to
Capital in Global Markets, A Report to the OECD by the Business Advisory Group on
Corporate Governance (1998); compare S. Strange, Mad Money: When Markets
Outgrow Governments (1998); S. Strange, The Retreat of the State: The Diffusion of
Power in the World Economy (1996); S. Saskia, Globalization and its Discontents:
Essays on the New Mobility of People and Money (1998).
3 See, for example, A. Shonfield, Modern Capitalism: The Changing Balance of Public
and Private Power (1969, 2nd edn.).
4 See L. Weiss, The Myth of the Powerless State (1998); S. Berger, S. Dore, and R.
Dore (eds.), National Diversity and Global Capitalism (1996); S. Vogel, Freer
Markets, More Rules: Regulatory Reform in Advanced Industrial Countries (1996).
5 See, for example, P. Doremus et al., The Myth of the Global Corporation (1998); J.
Zysman, ‘How Institutions Create Historically-Rooted Trajectories of Growth’(1996)
3Industrial and Corporate Change 243; J. Zysman, ‘National Roots of a ‘‘Global’’
Economy’ (1995) La Revue d-Economie Industrielle, un numero special de 1995:
Renouveau des Politiques Industelles dans le contexte des economies globales 107–
21.
6 For earlier articulations of arguments presented herein, see J.W. Cioffi, Governing
Globalization? The State, Law, and Structural Change in Corporate Governance,
BRIE Conference Paper no. 2 (2000); J.W. Cioffi and S.S. Cohen, ‘The Advantages
of Forwardness: The Interdependence of the State, Law, and Corporate Governance in
an Age of Globalization’ in Corporate Governance and Globalization, eds. S.S.
Cohen and G. Boyd (2000).
ßBlackwell Publishers Ltd 2000
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