Carsten Gerner-Beuerle

Bio: Carsten Gerner-Beuerle is an academic researcher from University College London. The author has contributed to research in topics: Corporate law & Conflict of laws. The author has an hindex of 10, co-authored 43 publications receiving 262 citations. Previous affiliations of Carsten Gerner-Beuerle include London School of Economics and Political Science.

Study on directors’ duties and liability

Abstract: The liability regime of executive and non-executive directors in companies constitutes a necessary corollary to control issues within a company. It is based on the determination of specific duties, it establishes the limits of management behaviour and it provides stakeholders and third parties dealing with the company with legislative protection against management misconduct. In that respect, directors' liability is an important and effective compliance and risk-allocation mechanism. The European Commission has not, to date, considered directors' liability issues in a comprehensive way. It is the purpose of this study to provide the relevant information in a comprehensive manner, in order to support to European Commission to consider its future policy in this area. To this end, the analysis spans from national laws and case law to corporate practice in respect of companies’ directors duties in all 27 EU Member States and Croatia.1 The overarching goal is to provide for a better understanding of certain important drivers of directors' behaviour. This study shows the extent to which the content and extent of duties and the corresponding liabilities, as well as the understanding of the persons to whom they are owed, fluctuate over the life of a company, i.e. during the "normal" phase of operation, and in the so called "twilight zone", i.e. shortly before insolvency. The study is mainly a stocktaking one. However, its comparative analysis also identifies similarities and differences between national regimes and identifies relevant cross-border implications.

Law Meets Economics in the German Federal Constitutional Court: Outright Monetary Transactions on Trial

Abstract: The Eurozone banking and sovereign debt crisis has brought the fragility of European monetary union into sharp focus and exposed the lack of effective instruments at the European level to maintain financial stability. The policy responses of the European and national institutions included an announcement made by the European Central Bank (ECB) in September 2012 in which the ECB envisages purchasing bonds issued by certain Eurozone countries in so-called “Outright Monetary Transactions” (OMT). The announcement of OMT has had a profound stabilising impact on financial markets, and has widely been regarded as a turning point in the Euro crisis. The OMT Decision has been challenged before the German Federal Constitutional Court (Constitutional Court) for exceeding the ECB’s mandate and violating the prohibition on monetary financing under the Treaty on the Functioning of the European Union. This article discusses critically the OMT Decision and the decision of the Constitutional Court. For the first time in its history, the Constitutional Court has made a reference to the Court of Justice of the European Union for a preliminary ruling, but also expressed the view that the OMT Decision is likely to be in violation of the principle of conferral, and hence of German constitutional law, unless it complies with precise conditions as to its scope, duration, and technical features set out in the Constitutional Court’s decision. We argue that the potential constitutional conflict invoked by the decision of the Constitutional Court is largely based on an incomplete understanding of the economic rationale and intended functioning of the OMT Decision. We draw on the economics of monetary union to show that the OMT Decision is intended to address deficiencies in the design of European monetary union and market distortions created by investor behaviour that is individually rational, but suffers from a failure of coordination. We argue that in light of the economic rationales of OMT, the Constitutional Court’s conclusion that the OMT Decision constitutes an illegal act by the ECB is unconvincing.

The Evolving Structure of Directors’ Duties in Europe

Abstract: Corporate mobility in Europe continues to be on the rise, both creating space for regulatory arbitrage by companies and influencing legislative decisions in corporate law and related fields This has triggered debates in European company law that centre on questions of harmonisation, cross-jurisdictional convergence and the superiority of certain regulatory approaches and legal families This article uses a large cross-country sample of EU Member States to classify legal strategies in corporate governance and assess claims of convergence and the superiority of legal families We analyse board structure, the most important duties of directors, namely the duties of care and loyalty, questions of enforcement, and the position of directors in the vicinity of insolvency, and develop a taxonomy of legal strategies across the Member States We find that, in spite of differences in regulatory technique and legal tradition, the effect of the legal strategies employed by the Member States is often remarkably similar and legal systems exhibit interconnections in the form of mutual learning across borders In addition, we show that, in contrast to claims by parts of the literature, judicial innovation is not restricted to particular legal families We argue that all legal families are, in principle, well equipped to react to new developments and draw on general or unwritten principles of law to fill regulatory gaps However, a precondition for the emergence of effective rules seems to be a sufficiently large body of case law and, accordingly, access to the courts and an efficiently functioning judicial system Consequently, we submit that questions of enforcement are of greater importance than a particular legislative or regulatory style

Is the Board Neutrality Rule Trivial? Amnesia About Corporate Law in European Takeover Regulation

Abstract: Whether the European Union's Takeover Directive should have adopted a mandatory neutrality rule has been the subject of much debate. As the European Commission commences its review of the Directive this debate is being reignited. A view is crystallising that the success and failure of the Directive can, in large part, be measured by the number of Member States that have opted-in, or out of the neutrality principle, or have opted-in subject to the reciprocity option. The contestability of European corporations is viewed through this lens as a function of the extent to which EU Member States have adopted an unqualified neutrality rule. This article takes issue with this viewpoint. It argues that the pre-Directive debate and the post-Directive assessment have failed to consider the core lesson of takeover defences in the United States, namely that the construction of defences and their potency are a function of basic corporate law rules. If corporate law rules do not enable the construction of takeover defences, or undermine the extent to which they can be potently deployed, then the adoption or rejection of the neutrality principle in Member States is of trivial significance. This article explores the triviality hypothesis in three central EU jurisdictions: the United Kingdom, Germany, and Italy. It concludes that, although there is variable scope to construct and deploy takeover defences in these jurisdictions, the triviality thesis is well founded.

The Mysteries of Freedom of Establishment after Cartesio

Abstract: The judgement of the European Court of Justice in Cartesio was eagerly awaited as a clarification of the questions concerning the scope of the right of establishment (Articles 43, 48 EC) that remained after previous landmark decisions such as Centros, Uberseering, and Inspire Art. The article analyses the implications of Cartesio in light of different scenarios of transfer of the registered and the real seat within the European Union. It assesses the interrelations of right of establishment and private international law rules for the determination of the law applicable to companies and concludes that the case law of the European Court of Justice after Cartesio, rather than providing for a coherent system of European company law, leads to arbitrary distinctions and significantly impedes the free movement of companies.

Collective Autonomy in the European Union: Theoretical, Comparative and Cross-border perspectives on the Legal Regulation of Collective Bargaining

Abstract: ‘Collective Autonomy in the European Union’ explores the question of collective autonomy by investigating the relationship between collective bargaining and legal regulation and its current evolution in the national contexts and in the EU internal market. The thesis aims at achieving a comprehensive understanding of the notion, function and exercise of collective autonomy and collective bargaining, and it argues that collective autonomy and collective bargaining in contemporary Europe present challenges that alter their basic features. To this end, the thesis undertakes a multifaceted analysis integrating three perspectives: a theoretical perspective analysing and combining the conceptual elements of collective autonomy and collective bargaining as defined in industrial relations theories, labour law theories, and in the discourses on global labour rights; a comparative perspective analysing how collective autonomy and collective bargaining have found legal regulation in the Italian and Swedish labour law and industrial relations contexts; a cross-border perspective examining how the EU regulation of the internal market freedoms of establishment and to provide services impacts on the features of collective autonomy and collective bargaining.By combining elements of international, European and comparative labour law, EU internal market law, and industrial relations, this thesis explores the unique features of collective autonomy and collective bargaining as socio-economic mechanisms having a normative power, whose functioning is however influenced by legal dynamics. Eventually, it examines the transformation that the foundations of collective autonomy and collective bargaining undergo in relation to the challenges deriving from both the processes of company-level decentralisation and the dynamics of the cross-border scenarios in the EU internal market. Ultimately, the thesis contributes to advancing the understanding of the foundations of collective autonomy and to exploring its operations beyond national borders. (Less)

Valuing the Invaluable

Abstract: Starting from the practical necessity of valuing human life for the purposes of assessing the cost-efficiency of state projects aimed at the mitigation of risk (healthcare, environmental protection, etc.), this essay begins by outlining and offering a critical appraisal of the various economic methods. In addition to this theoretical presentation of the methodology, it is exemplified by discussing the findings and practical significance of several important studies on the value of a human life, finally leading on to the controversial debate on the permissibility of placing an economic value on human life. The focus of interest is the question of whether and how any monetarization of human life can be justified from an ethical and legal viewpoint within the constellations described. The conclusion draws together the insights gained.

National Responses to European Court Jurisprudence

Abstract: The power of the European Court of Justice (ECJ) to promote European integration through law has been broadly acknowledged, but the court’s domestic impact has received less attention and remains contested. In particular, the ambiguity of many ECJ judgments is said to have two opposed effects: According to one logic, legal ambiguity enables national policy-makers to contain the impact of court rulings, i.e. to ignore potentially broader policy implications. According to another logic, ambiguous case law provides opportunities for interested litigants to pressure national policy-makers into (anticipatory) adjustments. Which of these two logics prevails, it is argued, depends on the distribution of legal uncertainty costs between supporters and challengers of the regulatory status quo. The argument is supported by two in-depth case studies on the domestic responses to series of ECJ rulings concerning the free movement of capital (golden shares) and services (posted workers).

The challenges of fractionalized property rights in public-private hybrid organizations: The good, the bad, and the ugly

Abstract: Policy designers seeking to harness profit-driven efficiency for public purposes are increasingly creating organizations with fractionalized property rights that distribute “ownership” among public and private actors. The resulting hybrids are quite diverse, including mixed enterprises, public-private partnerships, social entrepreneurship organizations, government-sponsored enterprises, and various other hybrid forms. Marrying public purposes to private sector efficiency and strategic flexibility provides a tempting rationale for mixing public and private owners in hybrid organizations. Because public-private hybrids involve fractionalized property rights, however, they exhibit tension among owners over both strategy and, more importantly, goals. To understand public-private hybrids, we assess them in terms of six dimensions of property rights: fragmentation of ownership, clarity of allocation, cost of alienation, security from trespass, credibility of persistence, and autonomy (of both owners and managers). The unclear allocation of fractionalized ownership rights facilitates the appropriation of financial residuals and asset ownership opportunistically. Other weaknesses in the property rights configurations of public-private hybrids create managerial dissonance or opportunistic behavior that typically leads to a narrowing of goals, but sometimes also to organizational failure.

Corporate Governance for a Changing World: Report of a Global Roundtable Series

Abstract: After the financial crisis, there has been considerable debate about the role of corporations in society. It has become broadly accepted that corporations - particularly the world’s largest publicly traded corporations – need to be governed with respect for the society and the environment. This is because corporations are dependent on the broader institutional and systemic framing for their long-term survival and because the most pressing of society’s problems cannot be solved without a contribution from corporations or by regulation alone.However, this consensus has not yet been reflected in mainstream corporate governance models that have been narrowing since the 1970s in order to put the maximisation of shareholder value at the centre of corporate attention. As a result, the normative and theoretical framework of corporate governance theory and practice continue to encourage excessive risk taking at the expense of corporate resilience and the ability to create long-term sustainable value.With this context in mind, the Purpose of the Corporation Project, an initiative of Frank Bold with the support of the Modern Corporation Project at Cass Business School, launched the Corporate Governance for a Changing World Roundtable Series on corporate governance. Events were held in Breukelen, Brussels, London, New York, Oslo, Paris, and Zurich. This brought together more than 260 leaders in business management, investment, regulation and academic and civil society communities with the aim of identifying desired outcomes and principles of corporate governance fit for the challenges of the 21st century. The report summarises the findings of the roundtables and associated recommendations for business practice and regulators.