The Radical Transformation of Company Law - Global Trends and Local Initiatives

Abstract

Since the 19605, and particularly over the last 20 years, there has been a radical transformation of company law in a number of jurisdictions. In many countries the basic objectives of the law have been changed. The form of constitution has changed. The capital maintenance doctrine has undergone fundamental ch ange. Directors' duties have changed. Shareholder remedies have been recast. The subject matter of Companies Acts has underg one revision. And so on. This transformation is due to a variety of reasons, some of which are quite complex and which interact with each other. Added to this is the fact that they are still in a state of flux and it is difficult to discern the emerging pattern. The prevailing Western theory of Shareholder wealth maximisation has been under attack in the aftermath of corporate scandals like Enron, World Com and HIH. Some commentators say this marks the failure of Corporate Law and self regulation. Following on claims about the end of history and the triumph of the Anglo America model this is somewhat ironic. The purpose of this lecture is to trace these trends and to consider how Malaysia may be affected by them and what lessons can be learned from them. Historically corporations were a matter of public law and a privilege or concession granted by the State in its primitive form . In the 19th century within a statutory framework it became more a matter of private law and private contract subject to minimal regulation by the State.